Research/ Review Paper | Textile Articles

ROLE OF INFORMATION TECHNOLOGY IN EMERGING BUSINESS ENVIRONMENT WITH SPECIAL REFERENCE TO ERP IN TEXTILES

Published: June 11, 2015

Author: TEXTILE VALUE CHAIN

Mrs. Yogita Agrawal, Mr. Tanveer Malik and Mrs. Rupali Kapoor

Faculties, SVITS Indore

ABSTRACT

Tremendous change has been occurred in the textile industries the last decade. To sustain competitive advantage, companies must re-examine and fine-tune their business processes to deliver high quality goods at very low costs. Globalization has led to increase in competition and quality awareness and also most companies have now outsourced manufacturing to low labour therefore it has become very important for the textile industry to integrate itself with information technology to survive.

ERP is an integrated system that allows information to enter at a single point in process & updates a single shared database for all functions that directly or indirectly depend on this information.

ERP solutions came into existence in corporate world due to various problems faced in Management Information System (MIS), Integrated Information System (IIS), Executive Information System (EIS), Corporate Information System (CIS), Enterprise Wide System (EWS), and Material Requirement Planning (MRP), Manufacturing Resource Planning (MRP II).

This paper deals with the functions of ERP, the response and need of the ERP in Indian textile industries, benefits of ERP system and ERP system Implementation. ERP system enhances information flow through various business processes like production sales, inventory planning and finance – helping companies to gain competitive advantage. Simply to understand – ERP system organizes all of the companies information into one centralises system, which is always available.

INTRODUCTION:

Textile companies to find an edge in this current competitive environment have to take proactive steps to improve operations. In the quest of profitable growth in a global marketplace, industries are looking for new strategies to improve the quality, cut costs, respond swiftly to changes in customer demands and vagaries in raw material supply position, expand globally, develop new distribution channels and forge new value-added relationships with suppliers and customers. With the increase in competition and quality awareness within and outside India, no developing and progressive industry would be able to survive for long without application of Enterprise resource planning (ERP)^[1]. Enterprise Resource Planning is Software for running a business. ERP was coined as an extension of the concept of manufacturing resource-planning (MRP) software, which automated the process of keeping a manufacturing line supplied with materials to meet incoming orders. It plans and controls various operations right from the purchase up to selling of the product. This paper mainly elaborates the concept of ERP, its development, implementation with its success and failure factors. There are many slacks in use of manpower, energy, fuel, textile material, and other processing materials in textile industry. ERP helps in the optimal uses of manufacturing resources, reduces the wastage of the raw materials.

Initially implementation of an ERP package was possible only for very large Multi National Companies and Infrastructure Companies due to high cost involved. Today many companies in India have gone in for implementation of ERP and it is expected in the near future that more than 60% of the companies will be implementing one or the other ERP packages since this will become a must for gaining competitive advantage.

ERP:

An Enterprise Resource Planning (ERP) system is a package of corporate wide software application that drives manufacturing, planning, costing, finance, marketing, human resources and other business functions in real time. Most textile companies normally have separate application software to carry out each activity. The significant advantage of an ERP system is that it integrates all the functions to create a single unified system rather than a group of independent application, thus creating a synergy between the vital resources of an organization namely men, material, money and machine.

NEED OF ERP IN INDUSTRY:

Controlling of the different textile mills in the different location can be made easy by this system. It vanquishes the old standalone computer system in Finance, HR, Manufacturing and Warehouse, and replaces them with a single unified software program dived into software modules that roughly approximate the old standalone system. It provides software for textile industries of all kind, from vertically integrated companies requiring system to cover the entire production cycle to those specializing in single stage of the production process. It helps in the planning for optimizing and scheduling of production orders. It not only provides a user-friendly environment can be tailored to the needs of companies both large and small, but also progressively expanded, both in the ` horizontal` sense to embrace additional organizational functions, as well as `vertically to integrate other stages of the production process^[3]. It produces the dramatic improvements when used to connect parts of an organization and integrate its various processes. Thus, it gives a better products and better services at affordable prices.

ERP IN TEXTILES:

Textile manufacturing revolves around three entities customers, banks and suppliers. A customer gives a sales order to the company and this form the basis for production planning. Raw material is purchased and dispatched to the mills. Receipts and payments are made through banks. Before the ERP deployment, most of the work was done manually resulting in inaccuracies both incorrect and missing entries. ERP has enabled accountability, accuracy, and transparency without breaking the existing workflow.

BENEFITS OF ERP:

The major benefits of ERP are improved coordination across functional departments and increased efficiencies of doing business. The implementations of ERP systems help to facilitate day-to-day management as well. ERP software systems are originally and ambitiously designed to support resource-planning portion of strategic planning. Various Benefits of ERP are:

Single Point of Entry – Data only entered at the source of that data
Reduction in paperwork because of online formats for entering and receiving information
Everyone has the same data
Historical and authoritative data
Immediate information
Quicker response and follow up with customers.
Quick response to change in business operations and market consumption.
Availability of timely accurate information with detailed content and better presentation
Improved supply demand linkage with remote locations and branches in other countries.
Better monitoring and quicker resolution of queries from within and outside.
Improved decision making processes due to availability of online information.
Improved cost control
Improved Visibility into all areas of the company
Improved customer service and satisfaction
Improved business processes providing a competitive advantage.

ERP IMPLEMENTION:

ERP or enterprise resource planning is a commonly used software package for enhancing the operational efficiency of business resources. It is a composition of software modules assisting company owners to achieve their goals at a faster rate. Implementation of ERP for an organization is done on the basis of company requirements. Today, ERP is a widely applied software system in all types of industrial fields including small and medium sized companies. Inventory control, better human capital management, customer relationship management and order tracking are some among the key benefits of implementing enterprise resource planning. Proper implementation of ERP package according to business needs is benefited with lots of advantages. ERP implementation is the customization and introduction of an ERP system in textiles. ERP software was designed with the concept of the benefit of seamless integration to streamline transaction-processing tasks across an enterprise.

Main barriers to implementing an ERP system:

The most frequently cite barriers were:

Resistance to change
Lack of top management support
Poor leadership from top management
In adequate education and training
Poor project management
Mismatch between the system capabilities and the organizations processes and procedures

CONCLUSION:
In order to compete and win in today’s global market field, better management of resources is an important criterion. Implementation of ERP controls different functions and enhance company efficiency. Latest technologies equipped with in ERP software package helps in better controlling and management of data. If implementation of ERP is done according to company goals, it assures you more return on investment. Before planning project, it is advised to design the project in a realistic approach. This helps employees in maximizing ROI in practical. Reducing inventory cost is another core objective of ERP implementation. Better order tracking, knowing customer needs and business requirements by ERP assists in proper utilization and management of resources. It enhances operational process and maximizes the return on investment rates. It enhancing the customer relationship management, increases the quality of services, shortens delivery times and enhances the performance rate offered by companies. It also helps in error controlling and helps in better planning and coordination of business resources so as to achieve maximum profit.

REFERENCES:

Desai K. S. and khatwani P. B., textile Magazine, 2002, may 41-46.
Role of ERP in textile industries by : S. Sudalaimuthu, N. Vadivu published in fibre2fashion
G. Deshmukh, Indian Textile Journal Oct.2001 11-26.
The Core Objectives of ERP by Dr Easton Patrick published in fibre2fashion.
Umble, E.J. and M. M. Umble (2002). Avoiding ERP Implementation Failure. Industrial Management. January/February pp.25-33.
Taking the pulse of ERP Modern Material Handling February 2001 pp. 44-51.

Books:

Olinger, Charles. “The Issues behind ERP Acceptance and Implementation.” APICS: The Performance Advantage
Pankaj Sharma. Enterprise Resource Planning. Aph Publishing Corporation, New Delhi, 2004.

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