The Establishment of ERP System to Support Management and Control Mode of the Group

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1 The Establishment of ERP System to Support Management and Control Mode of the Group Yahong Zhai, Longyan Xu School of Electrical and Information Engineering, Hubei University of Automotive Technology, Hubei China Abstract The status quo of informatization requests the group to integrate and innovate in information of key business link in the auto manufacturing chain. Thus, it is needed to explore a lean and integrated and control mode covering design, plan, logistics, quality, equipment and cost through deep integration of informatization and industrialization. The Enterprise Resource Planning (ERP) restructured the information, thus enabling the company to respond to the market demand efficiently and quickly. Furthermore, ERP made it possible for business procedure to be integrated, standardized and shared. The comprehensive integration and application demonstration were made in the auto manufacturing chain consisting of production process of auto parts and vehicle production line, therefore, the optimal allocation and synergy of the resource in the auto manufacturing chain could be realized. Consequently, it formed a lean and integrated and control mode that could prominently improve the comprehensive competitiveness. Keywords:ERP, integration, and control mode. 1. INTRODUCTION As China s economy experiences changes, the market also changes. It is requested that the and control mode should adapt to the change of the market. Based on the and control mode of the group, the research and establishing of united ERP can not only provide basic data for the group and control, but also help the manager to choose and control mode flexibly and make the right decision (Yang, 2013). Additionally, ERP also provides an informatization platform for sorting out the company business and improving its and competitiveness(liu and De, 2017). The industrial company with deep integration of informatization and industrialization is a lean company that enable centralized and control, along with scientific and decisions(xu, 2015). The company makes innovations in the method of designing products and tools, the production procedure, company mode and company collaboration method by the integration of advanced manufacturing technology, information technology and modern technology(tai et al., Chen et al., 2017; Wu and Ding, 2017). It is requested than the company should proactively explore the road of independent innovation with the integration of industrialization and informatization to promote industrial development and adhere to the national strategic development(deng,2017). Several years information construction has laid a solid foundation for digital design, digital and informatization supporting the environment, thus, the integration of industrialization and informatization receives initial success(zhang et al., 2015). However, with the constantly internal development of the company and fierce external competition from the market, the company is urged to transform the monomial application and partial integration of digitalization technology into its comprehensive application and overall integration(sun and Xue, 2014). Therefore, the core business procedure will be optimized to realize lean production, promote manufacturing and enable the overall synergy of design, manufacturing, procurement, supply, market distribution and company (Tertilt et al., 2015). Consequently, the lean and integrated and control mode with the group feature can be established (Krenczyk and Jagodzinski, 2015). 2. DESIGN PURPOSE At present, many companies still apply comprehensive instead of ERP with complete function to procurement, sales and inventory (Sun, 2007). Hence, the integration of information flow, material flow and capital flow can t be realized. Accordingly, the ERP supporting and control 14

2 mode and the core application should be set up, and integrated with other s to make sure the integration of information flow, material flow and capital flow(ramadhana et al., 2016). Therefore, the integration of those s can realize the group control in strategy, finance and human resource and business control in planning, logistics and quality(shan and Guo, 2015). The status quo of informatization requests the group to integrate and innovate in information of key business link in the auto manufacturing chain(koner, 2015). Thus, it is needed to explore a lean and integrated and control mode covering design, plan, logistics, quality, equipment and cost through deep integration of informatization and industrialization(aslan et al., 2015). The comprehensive integration and application demonstration were made in the manufacturing chain consisting of production process of engine, gearbox, axle and other key auto parts and vehicle production line. Thus, it realized the optimal allocation and synergy of the resource in the auto manufacturing chain, thus prominently improving the comprehensive competitiveness of the company(kilic et al., 2015). The main purpose to implement ERP is the three integration. Firstly, ERP plans and optimizes the resource of mainly managed by company like personnel, capital, material and investment to enable the intensive of the company(tai et al., 2016). Secondly, it develops a standardized platform to make it possible for integrated of procurement, inventory, production, sales, investment, asset life cycle and finance. Thirdly, it also establishes centralized platform to realize the bottom-up information collection in real time and top-down implementation of policy. Therefore, the makes it possible for efficient group (Xu et al., 2016). The standardizes the business flow and improve the in the procedure of establishment. The core value in application is reflected in three aspects: (1)Business departments work collaboratively in one platform, thus sharing information and improving work efficiency; (2) The finance is deeply incorporated into the business so that the finance and control can be extended to business and control; (3) The whole process of operation and is intensified to realize the delicacy and standardized operation(kilic,et al., 2015). 3. THE OVERALL FRAMEWORK OF ERP SYSTEM The ERP consist of three layers: the integrated framework and interface layer, functional moduel layer and the subsidiary plant layer. The integrated framework and interface are responsible for incorporating other information s of the company into ERP. The functional framework layer of ERP composes of of procurement, production, sales, material, finance and inventory, hence making it possible for the group to manage and control the logistics, procurement and inventory of its subsidiary plant. The subsidiary plant layer involves in the plant Ⅰ and plant Ⅱ of production base in Shiyan, Hubei and Chongqing. According to the requirement of the group and control, the overall framework of the ERP has been shown in Figure 1. 15

3 Procurement & refunding Invoice verification Taking delivery Procurement order Contract and agreement Procurement application Supplier assessment Cash Management accounting Financial accounting Goods delivery Receiving goods Production sheet Material request Material number Report & completion Material preparing Production order Main production plan Demand Craft BOM Refunding Issuing invoices Delivery of goods Contract and order Price Customer Analysis & assessment Inventory status Inventory Other information Pparts and components manufacturing execution Parts and components supply chain Vehicle manufacturing execution Sales and logistics database managemen t Customer relationship mamnagement Other information Integrated framework and interface layer Integrating information Integrating information The integrated framework and interface of ERP ERP Procurement Material Production Finance Sales Inventory Functional framework layer of EPR Group and control Plant layer The plant Ⅰ in Shiyan production base The plant Ⅱ in Shiyan production base The plant Ⅰ in Chongqing production base The plant Ⅱ in Chongqing production base Figure 1.The overall framework of ERP 4.THE FUNCTIONAL STRUCTURE OF ERP SYSTEM The functional structure of ERP is made up of 6 : procurement, production, sales, material, finance, inventory. Every contains multiple functional modules, and its main functional structure is presented Figure 2. The functional structure of ERP Inventory Sales Production Material managemen t Finance Procurement Figure 2.Functional architecture of ERP 4.1 Inventory The inventory module of ERP controls the entire inventory activity, records all the movement of inventory and supports all kinds of inventory inquiry. 16

4 Data Procurement Basic data Functional architecture of inventory mainly consists of data, inventory and basic data. The basic data records the material, inventory location, secure inventory, plant and batch information. Data includes statistical of inventory status, statistical of receiving, issuing and storing, of inventory age, on inventory value. The core function of inventory involves in inventory disposition, inventory status and inventory and assessment. The inventory disposition means the receipt of inventory, delivery of inventory, inventory transfer, inventory count and the processing of special inventory. The inventory status tracks the material status of inventory, demand/inventory dynamic, itemized account of inventory material, itemized account of inventory amount and different prices and value of material. The inventory and assessment is mainly made up of ABC, inventory asset assessment, coverage area, inventory turnover and standard. 4.2Procurement The procurement and module of ERP is used to comprehensively manage and monitor the entire supply execution procedure through procurement order. The procurement refers to procurement demand, procurement application, supply source determination, order creation, goods tracking and receiving, quality inspection in warehouse, invoices issuing and payment. Statistical of supplier Statistical of procurement cost Analysis of procurement execution Analysis on procurement price Organization Supplier assessment Price Procurement application Price enquiry and quotation Contract and agreement Procurement order Inbound delivery Receiving goods Invoice validation Purchase refund Supply source and quota Supplier Source list Procurement organization Procurement price Products Figure 3.Functional framework of procurement Functional framework of procurement presented in Figure 3 mainly composes of data, procurement and basic data. The basic data stores supplier information, source list, procurement organization, procurement price and products, etc. Data is the statistical on supplier and procurement cost and the on procurement execution and procurement price. The core function of procurement can be divided into supplier assessment, price, procurement application, price enquiry and quotation, contract and agreement, procurement order, inbound delivery and goods receiving, invoice validation, procurement refunding, supply source and quota. 4.3 Production The production needs to support multiple plans and production mode of manufacturing industry to make various production preparations more accurate, which should be reflected in the execution process of the production plan. Consequently, the process transferring the sales plan into production execution can be realized, and the process includes material availability, the current status of material, production completion date, procurement application and procurement order creation. 17

5 Data Production Basis data Data Sales Basis data Statistical on order execution Cost variance Production output statistics Statistics of material and personnel cost Organization BOM Craft Demand plan Major production plan Material demand plan Production order Repetitive manufacturing Material preparation, acceptance and issuing Report and completion Cost accounting Cost variance Plant Work center BOM Craft route Material Figure 4.Functional framework of production The functional framework of production displayed in Figure 4 comprises of data, production and basic data. The basic data mainly records the plant information, work center, bill of material and craft route. The data includes statistical on order execution, cost variance, production output statistics and statistics of material and personnel cost. The core function of production of production involves in BOM, craft, demand plan, major production plan, material demand plan, production order, repetitive manufacturing, material preparation, acceptance and issuing, cost accounting of products, cost variance. 4.4Sales Sales of ERP is in charge of the sales order and its execution as well as the synergic relationship between the order and the of marketing and production. Statistical of channel sales output statistical of revenue cost Sales execution Sales price Organization Client Price Price enquiry & quotation Contract and order Plan Picking Delivery Invoice issuing Free delivery Refunding Debit/credit memo Customer Customer credit Sales organization Sales price Products Figure 5.The functional framework of sales The functional framework of sales in figure 5 can be divided into data, sales 18

6 Data Material Basic data and basic data. The basic data involves in customer information, sales organization and sales price, etc. The data are the of sales output, sales execution and sales price and the statistical of revenue cost. The core value of sales is customer, price, contract and order, plan, delivery, invoice issuing, refunding and debit/credit memo. 4.5Material Material delivery the correct material in the right time, thus satisfying the production demand. Statistical of supplier Statistical of material cost Material requisition Material price Material number Material requisition application Supplier Organization Automatic database assessment Make procurement form Warehouse receipt preparation of invoice Stock generation Financial settlement Delivery and material requisition Supplier Bill material Material organization Material price Product Figure 6.The functional framework of material The functional framework of material in figure 6 is made up of data, material and basic data. The basic data keeps the supplier information, bill of material, material price and material organization. The data is the statistical on supplier and material cost as well as the on material requisition and its price. The major function of material is grouped into material number, supplier, automatic database assessment, procurement form making, delivery taking in warehouse, preparation of invoice, generation of inventory, financial settlement, delivery and material requisition. 4.6 Financial Financial optimizes the and control of revenue cost and expense with multiple tools of accounting. Therefore, it can tabulate business data in real time, enabling the finance better reflect and monitor the business. The functional framework of financial shown in Figure 7 comprises of data, financial and basic data. The basic data preserves the company information, fixed asset and cost enter. The data mainly analyzed the cash flow, report, inventory report. The central function of financial is classified into financial accounting, accounting and cash. 19

7 Financial Basic data Data 析 数据分 Asset balance sheet Income statement Cash flow statement Tax Business department statemen Product cost statement Inventory statement Accounts payable aging report Financial accounting Managerial accounting Cash General ledger Account receivable Material ledger Account payable Fixed asset Cost center accounting Profitability Profit cost accounting Internal order accounting Product cost Activity-based costing Cash journal Bank accounting Cash position Cash budget control Bank reconciliation Cash flow forecast 基础数据 Company code Control scope Accounting subject Cost element Fixed asset Bank account Cost center Profit center Figure 7.The functional framework of financial 5. CONCLUSION ERP is the core of the company s information. It enables data across departments and functions, and it lays a foundation for decision support (Żaba et al., 2016). Integration as its major attribute closely connects related business to totally cancel repetitive work and abundant data, thus optimizing business procedure. The establishment of ERP restructured the information framework, hence enabling the company to respond to the market demand efficiently and quickly. Furthermore, ERP makes it possible for business procedure to be integrated, standardized and shared(chang et al., 2015). However, it is also not a mighty software. If it can operate with high efficiency, it can provide accurate and timely data to decision and for decision-making level, level and employees. If not, problems will come out to help improve the and bring profit. This project will be conducive to facilitate the manufacturing ability of core business, consequently forming lean and integrated control for the group. In addition, the project will be set as an example for China s auto manufacturing industry, and stimulate experience for its transformation and upgrading. ACKNOWLEDGEMENTS The authors would like to thank the editors and anonymous reviewers for their helpful comments and suggestions that improved the paper. This work were supported by the scientific research program of Hubei Provincial Department of Education (Nos.B and B ). REFERENCES Aslan, B., Stevenson, M., Hendry, L. C. (2015). The applicability and impact of enterprise resource planning (erp) s: results from a mixed method study on make-to-order (mto) companies, Computers in Industry, 70, Chang, T. S., Fu, H. P., Ku, C. Y. (2015). A novel model to implement erp based on dynamic capabilities, Journal of Manufacturing Technology Management, 26(7). Chen, Y., Liu, J., Li, Y.N., Wang, W. (2017). Mode and Mechanism of Green Innovation Based on User Involvement Electronic Platform under Chinese Green Education Context, EURASIA Journal of Mathematics, Science and Technology Education, 13(10), Deng, X. (2017). Construction of erp information integration platform for nuclear power generation enterprises, China Computer & Communication. Huo-Jun, X. U. (2015). A strategic study of the erp in modern enterprise, Journal of Anhui Vocational College of Electronics & Information Technology. 20

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