Key differences between MRP systems and ERP

Posted by Stephen Whitehouse on 8 Dec

manufacturing

If you have any experience in business management, then the chances are that you're aware of both Material Requirements Planning and Enterprise Resource Planning. Although they have similarities, they are also different. This article will highlight what each system is and help you decide which one is the best for you.

MRP systems

Both MRP and ERP are software items designed to assist you in the running of your business by helping you to forecast better and bring cohesion between your chosen business priorities. MRP has a strict manufacturing focus with the intention to meet the following three objectives:

  1. To make sure raw materials are available for manufacture and outputs are available for customer delivery
  2. Ensure the least possible material and product in store
  3. To design manufacturing tasks, buying tasks, and delivery itineraries.

The benefits of MRP are that it allows total control and efficient administration of stock, overall equipment effectiveness, buying, and manufacturing. The focus for MRP is the manufacturing process, where it's designed, with people working in these departments in mind. An MRP system would use a forecast to order the required materials to arrive on an appropriate date for manufacturing to continue seamlessly. MRPs are also capable of integrating with supplier's systems to ensure more efficient supply chain management.

The drawback of MRP systems is that they rely on highly accurate data input. Any discrepancies in the data entered can result in problems like delays or under and over-deliveries. Of course, the knock-on effect of issues like these is the loss of business or cash flow problems which can be highly detrimental to any business. So while MRPs can be highly effective in letting manufacturers know what is needed and when and can be instrumental in a well-run operation, there are possible pitfalls that need to be considered.

ERP software 2022 - 05 - All-in-one

Enterprise Resource Planning systems differ from MRPs in that they integrate every part of the business rather than just from the manufacturing process. The elements of retail and distribution can be linked to the system, giving you and the customer a cleaner, more transparent process from start to finish.

ERP can track manufacturing processes in the same way as MRP, the main difference is, it also has the functionality to manage areas such as accounts, sales, customer services and more. Management will be able to gain a full clear picture of how their business is operating from one system and can use the data to make more informed, better-quality decisions about the future of their enterprise. Real-time costs, status, and customer updates allow business managers to react quickly also decisively with accurate information.

For example, by bringing in sales forecasting into the process, a business can prepare its materials and work hours to respond to that order. Another potential benefit would be the ability to provide the ever-popular end-to-end tracking, from order to delivery estimate. In terms of process manufacturing, the use of an ERP allows for increased efficiency, leaner manufacturing, and a more agile and flexible business.

Conclusion 

When compared to an MRP system alone, a well-constructed and maintained ERP would beat it hands down. While of course, a quality MRP will make a business owner's life easier, an ERP not only allows even more efficiency but helps highlight insight into other areas of business, potentially not only making life easier but the business more profitable and future-proof.

Cloud

 

Topics: Manufacturing, ERP Software, Business Management Software, Production Management, Lean Manufacturing

Sign up to our newsletter

The information contained in this website is for general information purposes only. The information is provided by WinMan and whilst we endeavour to keep the information up-to-date and correct, it is subject to change or withdrawal at any time. Personal details: When you request further information about WinMan, subscribe to our blog or leave a comment we collect personal details from you, including information such as your name and address. This information is needed in order to satisfy your request however the majority of this data we request is not compulsory and may be omitted if desired. For more information please see our full privacy and cookies policy.

Ready to go to the next stage? Schedule an overview with our ERP consultants to  discuss your current requirements.

Get in touch

Call today:

844 532 6377

Mon - Fri 8.30AM - 5.00PM


or submit an enquiry: