ERP Systems

MRP ERP Systems

Software termed MRP, or material requirements planning, first made its advent in the 1970s. It was used by manufacturers to calculate the materials needed for a project and when more needed to be ordered. MRP software was soon recognized as stand-alone software in the manufacturing and production environment.  

In a short time businesses recognized that they needed to do more than calculate materials in order to continue to increase profit. As a result, MRP II software was developed.  This new manufacturing resource planning was able to incorporate vendor management, capacity planning, and billing under one central system.

It was really in the late 1980s and 90s that ERP software evolved from MRP II software.  ERP, or enterprise resource planning, software went further than even MRP II. This new software was designed so that every department could enter data and have it be visible to the rest of the business.

Each of these three software systems conduct different functions and deal with different underlying questions. MRP operates by answering questions such as: What is being made? What materials will it take to make it?  What amount of materials will it take? What materials are already on hand? And, what materials need to be purchased? Some of the functions carried out by MRP, for example, have to do with bill of material; inventory management; work order management; shop floor scheduling; production activity control; and material shortage management.

MRP II is the acronym for Manufacturing Resource Planning. MRP II operates by answering questions such as: What is being made? What materials will it take to make it? What materials are already on hand? What materials need to be purchased? And, what constraints must be met now and in the future? Some of the functions carried out by MRP II, for example, have to do with financials; business plans; resource planning; sales; operations; EDI and customer orders; mater production schedule; rough cut and detailed capacity planning, and product costing modules.

The ERP philosophy appeared after seeing what MRP II could accomplish. Effective ERP requires that integrated management processes extend horizontally across the company, including product development, sales, marketing, manufacturing, and finance. It must also extend vertically throughout a company's supply chain to take into account the acquisition of raw materials, suppliers, customers, and consumers. ERP systems also include all purchase information, recorded contracts, proposals, and customer contact information.

The functions carried out by ERP include: financial planning; business planning; sales and marketing; production management; distribution requirements; supply chain management; and research and development management. ERP operates by answering all the questions of MRP and MRP II as well as the additional questions: How will performance be planned, simulated, measured, and improved?

In simple terms, it follows then that an ERP system is a means of keeping the information used in a business’ day to day activities safe in a central database. This enables planning what has to be done, when it has to be done, and notifies business leaders of issues that need to be addressed.

Materials Requirements Planning, MRP II, and Enterprise Resource Planning all minimize bottlenecks in production from material shortages.  They can also prevent excess inventory and keep work in progress to a minimum. Undoubtedly, they share similarities, since MRP, MRP II, and ERP are used to ensure the right materials are in the right place at the right time and in the correct amount.

In the end, materials requirements planning (MRP) and enterprise resource planning (ERP) equally represent essential parts of a company's decision-making procedures. Business leaders use the two operating tools to improve competitiveness in the short and long terms. Although MRP and ERP correspond to distinct operating tools, it is true that they typically interrelate. A company's ERP software system covers resource needs across the business, including product planning and raw materials purchasing as well as inventory monitoring and evaluation. ERP can also include more. MRP, however, has a much more limited scope dealing solely with materials.  MRP almost always operates as one of the components of a company's ERP system.

Right now, there are many vendors, some large and well-known and some small, with MRP ERP Systems on the market. Horizon Software, Inc., has been providing ERP, accounting software, and MRP software solutions to small and medium size manufacturers for more than two decades. Horizon’s MRP Plus ERP software provides a complete solution to assist growing businesses become more productive, more competitive, and more responsive. The MRP ERP system is a software solution for supply chain and manufacturing environments, it offers a wide set of integrated manufacturing solutions and accounting software. Specifically created for small and mid-sized growing manufacturing companies and utilizing client-server technology through Microsoft Access and Visual Basic, the MRP ERP system’s flexible architecture enables seamless integration with Microsoft Office, CRM, and other third party solutions.

Written by :

Amy Cruz