What is the difference between MRP and ERP?

Have you ever wondered what MRP and ERP stand for? MRP stands for Manufacturing Resource Planning and ERP stands for Enterprise Resource Planning. MRPs are systems that manage the flow of materials through a manufacturing process, while ERPs cover all aspects of business management. These terms can be confusing because they sound similar, but MRPs and ERPs have different purposes. In this article we will discuss how these two software types differ from each other as well as their strengths and weaknesses.

Material Requirements Planning (MRP):

  • MRPs are used in manufacturing and supply chain management to manage the production schedule.
  • MRPs typically include requirements for raw materials, labor, utilities, equipment usage and facilities capacity. When a MRP is run it produces an optimal production plan based on these factors such as how much inventory should be produced or when machines need maintenance.

Enterprise Resource Planning (ERP):

  • ERPs can support all of functions within your organization including finance, human resources and more. They provide real time information that can help you complete tasks faster than ever before through automation and connectivity with other systems using API’s . An example would be if we documented our process for creating new hire documents while using an ERP system. The HR department would just have to click a button and the information would be added automatically.
  • ERPs can help increase collaboration between departments as well as reduce redundancy by sharing documents with other users in real time over an intranet. There is also less of a chance for data corruption because it will only exist on one server instead of different copies stored on multiple hard drives.

A Brief History of MRPs and ERPs

MRP systems were first developed in the early 1960s in response to the need for better materials planning and control. At that time, ERPs did not exist and most businesses used manual methods such as pen and paper to track inventory levels and orders. MRP II was introduced in the late 1970s as an upgrade to the original MRP system. It included features such as capacity planning, shop floor control and demand forecasting.

The first ERP system was called SAP R/12 and it was released in 1992. This system combined MRP II with other functions such as financial management, production scheduling and human resources management into a single software package. In 1997, SAP became the first company to achieve $100 million in annual revenue from software licenses.

Both MRP and ERP Software

There are many advantages and disadvantages to both MRPs and ERPs, which vary depending upon your industry or business needs. MRP systems require extensive training whereas most companies expect their employees to learn how to use new software immediately. However, this lack of adaptability makes it difficult for MRPs to keep up with the latest changes in the marketplace. MRPs are also not as effective when it comes to long-range planning or forecasting.

ERP systems, on the other hand, can be very versatile and customizable to meet almost any need. They have the ability to integrate with a vast number of software applications and can be used by companies of all sizes. The main disadvantage of ERP is that they can be expensive and require significant setup time and maintenance. Additionally, many ERP implementations go awry due to lack of communication between different departments during implementation.

The Difference between MRP and ERP

MRPs are used in manufacturing and supply chain management to manage the production schedule. MRP typically includes requirements for raw materials, labor, utilities, equipment usage and facilities capacity. When a MRP is run it produces an optimal production plan based on these factors such as how much inventory should be produced or when machines need maintenance.

ERPs can support all of functions within your organization including finance, human resources and more. They provide real time information that can help you complete tasks faster than ever before through automation and connectivity with other systems using API’s.

Conclusion

MRP and ERPs are both important parts of your business, but MRPs are typically used for managing the production schedule. If you plan to implement an MRP or ERP system in the near future it is best that you speak with a professional about how each will help improve efficiency within your company.

Categories:

No Responses

Leave a Reply

Your email address will not be published.