Economic resource planning (ERP) an application in which the routine planning of Organization’s resources is improved; it also includes management and operational control. It amalgamates activities of different functional department, namely finance, HR, sales, logistic & production module.

Logistic is one of the important components of ERP, as to maintain in time movement of goods, inbound and outbound is very important in an organization while maintaining the right inventory.ERP Material management helps to manage end to end procurement and logistics business processes, from requisition to payment. It can be classified mainly into the following sub classes and they are inter-related.

1.   Bills of Material: From the sales order made by product management department the scope of supply is decided. A particular code is given to the main product, and under this parent code are the sub codes. This is called the bills of material. All further actions of this module depend on bills of material.

2.    Requisition: On basis of bills of material the requirement is generated. If the material is in stock then the allocation of the required item is done automatically to the mentioned Customer, otherwise particular item has to be bought from outside. To ensure the time bound delivery they practice Short term Resource Planning & Long term Resource Planning for such items.

3.    Purchase order: Vendors are selected by the Purchase managers and they negotiate with them, after the finalization of deal a purchase order is raised for the items which has to be bought from outside.

4.   Accounts payable: On the basis of Goods Received Notes and the material receipt this module automatically allocates the order number and the amount payable to the vendor code, from which the material has come.

5.   Inventory management: This module is useful to maintain the right amount of inventory. It is done by tools like goods movement, goods reservation and periodic processing.

6.   Master Raw material and finished good: Once all the material against a sales order is in stock, a production order is issued and the required final material is assembled or produced which is owed to finished good. This finished good is also sent to prescribe location.

7.    Create Invoice: Based on the information in the sales order the dispatch department generates the invoice, they retrieve the material from the prescribed location and material is packed and send.