Introduction
The enterprise resource planning (ERP) technology can significantly improve the performance of any company due to its ability to manage the company’s information and its business functions. As a rule, an ERP system includes specially designed software that allows a company to achieve the growth it wants. This system was implemented by the company under consideration, Hansen, that needs the integration of its productive and non-productive business functions and that aims to expand to the international markets (ERP Case Study: Hansen’s Pipeline to the World, 2009). It is necessary to explore how ERP technology is going to influence the production and non-production functions of the company, as well as how production and non-production effects are related to each other.
Hansen’s Production and Non-Production Functions
First of all, the production and non-production functions of the company under analysis have to be identified. Hansen’s production functions correspond to its main functional areas. According to ERP Case Study: Hansen’s Pipeline to the World (2009), the areas that are related to production are Production Scheduling and Production Order Processing. With regards to these areas, Microsoft Business Solutions – Axapta, the technology that the company has chosen, can improve production scheduling or, to be more exact, make it better organized. Production scheduling takes much time and effort. The new technology will facilitate and hasten all the processes that product scheduling involves. Similarly, production order processing activities will also be changed. This is likely to result in better customer satisfaction and, therefore, customer loyalty.
As far as the non-productive functions are concerned, they are related to such functional areas as Sales and Purchase Order Processing, Inventory Management, and different accounting and financial processes (Enterprise Resource Planning Software Solution, 2009). Concerning Sales and Order Processing, the technology will help Hansen to better fulfill such non-production functions as taking and processing sales and purchase orders; it will increase the number of orders processed, as well as reduce the inquiries of the customers regarding the order status. Moreover, in terms of Inventory management, ERP technology will help Hansen to balance “the costs of inventory with the benefits of inventory” (Hedrick, Barnes, & Davis, n.d., p. 2). Thus, the technology will make Hansen’s inventories more effective and cost-efficient. Finally, financial and accounting processes will also be affected by new technology that will process the data at high speed and do this unassisted.
Production and Non-Production Effects Interrelation
The effect on the company’s performance will be produced not only by the introduction of the new technology. The matter is that production and non-production functions are interrelated. Consequently, production and non-production effects are also connected. For instance, if production scheduling processes start taking place faster, sales and purchase order processing activities will start taking less time. By analogy, if production order processing functions are improved, the time required for sales and purchase order processing will be reduced. Lastly, if financial and accounting processes are hastened and facilitated, the rest of the processes and activities will undergo the same changes.
Conclusion
Taking into consideration everything mentioned above, it can be concluded that the ERP technology that Hansen is introducing will be extremely beneficial for the company’s performance. Besides, as expected by the company, the technology will help it to achieve better customer satisfaction and expand to the international markets due to the improved quality of its products.
Reference
ERP case study: Hansen’s pipeline to the world. (2009). iStart. Web.
Inventory management. (n.d.). SBA. 2010. Web.