Did you know that ERP systems were born from the creation of MRP? In this article we will learn what each tool refers to, the difference between ERP and MRP and how they can be integrated to cover different objectives of a company.
Both solutions are digital systems (software) designed to optimize processes within a company.
What are the differences between MRP, MRP II and ERP?
MRP Software
If we follow a chronological line, it is first necessary to explain the MRP system, since it appeared first, in order to better understand the difference between ERP and MRP.
When manufacturing industries started to improve, manufacturing times became relevant. And to optimize manufacturing times, it was necessary to know the materials available in inventory, and to have this regulated in real time. This was the main reason that gave rise to MRP, which stands for Material Requirements Planning.
MRP is material requirements planning software, and its origin is in the manufacturing industry. As we have seen, their main objective is to keep control, measure and account for existing materials and those required for manufacturing.
In addition, this type of software makes it possible to know when materials will be available in the supply chain. In this way, manufacturers could effectively forecast production times in order to optimize them and identify losses.
Its general functions are:
Later in time, companies discovered that it was not only necessary to have planning in production, to order and maintain complete inventory, but also to maintain communication with other departments in the company.
It so happened that manufacturers had to offer more customized products in order to win customers. Mass production was not enough to meet the increasingly diverse and personal needs.
So supply chains multiplied, as products began to be different and cover different functions. These new products offered more features and required new services.
Companies needed a more effective flow of information between the commercial department and manufacturing in order to respond to customer needs in real time.
This need gave rise to MRP II, which, in addition to offering materials management tools, also offered finance, accounting and general planning modules. The MRP II system is software that is closer to what we know today as an ERP.
ERP Software
An ERP is a software that includes functions that contemplate all the processes and departments dedicated to the internal operation of the company.
An ERP (Enterprise Resource Planning) program is a software designed to manage, analyze and automate all the internal processes of a company. It automates and manages accounting, human resources, finance, invoicing, logistics, inventory, internal communication, etc.
Implementing an ERP means that the company wants to manage and automate the entire production circuit, the main difference between ERP and MRP with constant communication between departments. The data obtained from each module is used by the other to manage the entire company.
Difference between ERP and MRP
The difference between ERP and MRP lies in the scale and functions that the company wants to automate. An ERP includes MRP, in that it offers tools to control inventory and materials. But it is much more than that.
The ERP was the evolution of the MRP, therefore, it seeks to automate and connect all the departments that make the internal functioning of the company. It offers a complete view of the production process, since it includes an integrated data system, where the different departments can see the information in real time, and from a single interface.
To summarize, MRP provides tools to manage materials, and ERP provides tools to manage all internal processes, including materials management.
ERP vs. MRP, which one does my company need?
Professional ERP software such as NetSuite ERP, Softland ERP Enterprise or Bind ERP, are designed to deliver the best features, and include among their functions an MRP module, to manage inventory.
However, ERP systems tend to be more expensive and complex to install, as they offer more tools. For this reason, you should first make sure what your company's needs are at the moment.
An ERP software system allows you to improve project management in a comprehensive way, including financial information and organizational processes. In addition, it offers detailed reporting by evaluating data from the entire process.
But if your current goal is to order inventory, and better manage orders and stocks of production materials, you should focus only on an MRP, and perhaps later integrate the other functions of an ERP.
Conclusion
You now know the difference between ERP and MRP, and what to consider if the decision is between ERP vs MRP. Currently, there are many different solutions for internal process management.
There are cloud ERP, paid ERP, free ERP, open source ERP, etc. To learn about the available ERP software options, you can visit the ComparaSoftware platform, where all the options on the market have been evaluated and compared.
Both solutions are digital systems (software) designed to optimize processes within a company.
What are the differences between MRP, MRP II and ERP?
MRP Software
If we follow a chronological line, it is first necessary to explain the MRP system, since it appeared first, in order to better understand the difference between ERP and MRP.
When manufacturing industries started to improve, manufacturing times became relevant. And to optimize manufacturing times, it was necessary to know the materials available in inventory, and to have this regulated in real time. This was the main reason that gave rise to MRP, which stands for Material Requirements Planning.
MRP is material requirements planning software, and its origin is in the manufacturing industry. As we have seen, their main objective is to keep control, measure and account for existing materials and those required for manufacturing.
In addition, this type of software makes it possible to know when materials will be available in the supply chain. In this way, manufacturers could effectively forecast production times in order to optimize them and identify losses.
Its general functions are:
- Stock control: defining the right materials, at the right time.
- Production scheduling: ensuring that products are ready to be delivered to the consumer.
- Inventory management: keeping the warehouse stocked with materials.
- Supply chain management: organize manufacturing activities, sales orders and purchasing.
Later in time, companies discovered that it was not only necessary to have planning in production, to order and maintain complete inventory, but also to maintain communication with other departments in the company.
It so happened that manufacturers had to offer more customized products in order to win customers. Mass production was not enough to meet the increasingly diverse and personal needs.
So supply chains multiplied, as products began to be different and cover different functions. These new products offered more features and required new services.
Companies needed a more effective flow of information between the commercial department and manufacturing in order to respond to customer needs in real time.
This need gave rise to MRP II, which, in addition to offering materials management tools, also offered finance, accounting and general planning modules. The MRP II system is software that is closer to what we know today as an ERP.
ERP Software
An ERP is a software that includes functions that contemplate all the processes and departments dedicated to the internal operation of the company.
An ERP (Enterprise Resource Planning) program is a software designed to manage, analyze and automate all the internal processes of a company. It automates and manages accounting, human resources, finance, invoicing, logistics, inventory, internal communication, etc.
Implementing an ERP means that the company wants to manage and automate the entire production circuit, the main difference between ERP and MRP with constant communication between departments. The data obtained from each module is used by the other to manage the entire company.
Difference between ERP and MRP
The difference between ERP and MRP lies in the scale and functions that the company wants to automate. An ERP includes MRP, in that it offers tools to control inventory and materials. But it is much more than that.
The ERP was the evolution of the MRP, therefore, it seeks to automate and connect all the departments that make the internal functioning of the company. It offers a complete view of the production process, since it includes an integrated data system, where the different departments can see the information in real time, and from a single interface.
To summarize, MRP provides tools to manage materials, and ERP provides tools to manage all internal processes, including materials management.
ERP vs. MRP, which one does my company need?
Professional ERP software such as NetSuite ERP, Softland ERP Enterprise or Bind ERP, are designed to deliver the best features, and include among their functions an MRP module, to manage inventory.
However, ERP systems tend to be more expensive and complex to install, as they offer more tools. For this reason, you should first make sure what your company's needs are at the moment.
An ERP software system allows you to improve project management in a comprehensive way, including financial information and organizational processes. In addition, it offers detailed reporting by evaluating data from the entire process.
But if your current goal is to order inventory, and better manage orders and stocks of production materials, you should focus only on an MRP, and perhaps later integrate the other functions of an ERP.
Conclusion
You now know the difference between ERP and MRP, and what to consider if the decision is between ERP vs MRP. Currently, there are many different solutions for internal process management.
There are cloud ERP, paid ERP, free ERP, open source ERP, etc. To learn about the available ERP software options, you can visit the ComparaSoftware platform, where all the options on the market have been evaluated and compared.