ERP and MRP software are often declared as game changers for modern manufacturing. But what do they actually mean?

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What is ERP?

ERP stands for Enterprise Resource Planning software.

Business management software that enables you to store, coordinate and manage every aspect of your business – e.g. from product planning and manufacturing through to inventory management and shipping payment – all in real time. The term is not exclusive to manufacturing though – many industries also use it to describe the integrated management of operations.

Why is ERP important?
The dread of data silos:

  • Forecasting
  • Sales and Marketing
  • Supply Chain Management
  • Production Planning
  • Services
  • Human Resources
  • Finance and Accounting
  • Manufacturing and Distribution
  • Internet Sales
  • Engineering

A full-featured ERP system smashes these silos, creating a joined-up system where all elements of your business are accessible at once in a single software solution. It can also ensure:

  • A reduction in errors and data duplication.
  • Reduced training costs.
  • Data conflicts minimised.
  • Better data security.
  • Essential company data available anywhere.

Can you afford not to embrace ERP?

According to the Aberdeen Group, manufacturing companies that use ERP systems, on average, experience a:

13% reduction in operating costs.

10% reduction in administrative costs.

11% reduction in inventory.

12% improvement in internal schedule compliance.

13% improvement in complete and on-time shipments.

The bottom line?

  1. Maximise efficiency.
  2. Spot opportunities and weaknesses at a glance.
  3. Boost your bottom line.
  4. Make your life easier – and your company richer.

So what is MRP?

Material Requirements Planning (MRP) OR Manufacturing Resource Planning (MRP II).

MRP software enables you to manage manufacturing processes via the software’s production planning and inventory control systems. As suggested by the references to ‘Materials’ and ‘Manufacturing’ in MRP’s two variations, these concepts are exclusive to manufacturing.

In effect, it’s a ‘subset’ of ERP. It caters directly to a manufacturer’s specific needs, ensuring that materials or resources are available for production and products. It helps you plan manufacturing activities, delivery schedules and more.

Erm, so what’s the difference between MRP and ERP?

It’s easiest to answer this question with a simple ‘sum’ …

Manufacturing Resource Planning (MRP II) + Customer Relationship Management = Enterprise Resource Planning

But with the right ERP package and provider in place, you won’t have to worry about such ‘maths’ – you can just enjoy the benefits.

There’s no rule that says complex systems must be difficult to install. Planning, attitude and a commitment to getting it right make a massive difference. Here’s a guide on: ‘How to Avoid ERP Disappointment

This post first appeared on the Sanderson blog.