The very basic question to any beginners is why Enterprise Resource Planning also called ERP is required? To answer this, let’s examine this typical business scenario.

Suppose a client approaches sales team asking for a particular product. The sales team contacts to inventory department to check the availability of the product.

To their surprise, sales team found out that the product is out of stock. So next time this don’t happen, they have to introduce a SAP ERP tool.

Before we actually see in detail, what ERP is and how ERP can help in your business process, we will understand how different departments are involved in the whole business process.

Client contacts the sales team to check the availability of the product

Sales team approaches the Inventory department to check for the availability of the product

In case the product is out of stock, the sales team approaches the Production Planning Department to manufacture the product

The production planning team checks with inventory department for availability of raw material

If raw material is not available with inventory, the Production Planning team buys the raw material from the Vendors

Then Production Planning forwards the raw materials to the Shop Floor Execution for actual production