Page 362 - Accounting Information Systems

C H A P TER 7 The Conversion Cycle 333

FI G U R E THE INTEGRATION OF MANUFACTURING AND FINANCIAL SYSTEMS WITHIN THE MRP II
7-24 ENVIRONMENT

Management
Reporting
System
Sales Order Inventory
Processing Control
System System

Performance
Information
Sales RM and FG
Orders Inventory

Manufacturing
Billing Resources Purchases
System Completed Planning II (MRP II) Raw Materials System
Work Orders System Requirements

Completed Employee Time
Move Tickets Information

Cost
Accounting Payroll
System System

ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS
In recent years MRP II has evolved into large suites of software called ERP systems. ERP integrates
departments and functions across a company into one system of integrated applications that is con-
nected to a single common database. This enables various departments to share information and com-
municate with each other. An ERP system is composed of function-specific modules that reflect
industry best practices. Designed to interact with the other modules (for example, accounts receivable,
accounts payable, purchasing, and so on), these commercial packages support the information needs
of the entire organization, not just the manufacturing functions. An ERP can calculate resource
requirements, schedule production, manage changes to product configurations, allow for future planned
changes in products, and monitor shop floor production. In addition, the ERP provides order entry,
cash receipts, procurement, and cash disbursement functions along with full financial and managerial
reporting capability.
A lean manufacturing company will have an ERP system that is capable of external communica-
tions with its customers and suppliers through electronic data interchange (EDI). The EDI communi-
cations link (via Internet or direct connection) will allow the firm to electronically receive sales
orders and cash receipts from customers, send invoices to customers, send purchase orders to