What is the difference between ERP and MRP?

MRP stands for Material Requirements Planning. It involves planning appropriate production, regulating inventory, and scheduling. It is imperative for managing the manufacturing process. Most MRP systems are software-based; although, MRP can be performed by hand as well. MRP system stands by three essential principles.

These include establishing what materials are needed for production and determining how to get the product ready for consumers. Maintain the lowest inventory possible such as tools and products in-store. Set up manufacturing, purchasing activities, and scheduling deliveries.

MRP II systems were later on replaced by ERP, which stands for Enterprise Resource Planning, which had expanded functions beyond manufacturing. ERP is concerned with how to oversee the resources available in the business. ERP is utilized to coordinate resources, information, and systems within a business. This system delivers a joint database, which offers interfaces, figures, and facts to every group within an organization, including human resources and project management.

MRP or Material Requirement Planning is one of the integral parts of the manufacturing processes. There are so many software programs that have been designed to handle the MRP systems. However, there are still a lot of ways to conduct MRP by hand. One of the objectives of the MRP system is to make sure that all needed materials for production are readily available. It also helps in structuring manufacturing activities, scheduling deliveries, and purchasing activities. On the contrary, ERP or Enterprise Resource Planning was designed to replace the MRPII. The MRII was created as the advanced version of MRP because it can manage big factories. MRP is a perfect tool to handle the control of Inventory and production planning. The MRP will ensure that production materials are readily available. On the contrary. ERP is a perfect tool to manage the usage of the available resources.

There are some major differences between ERP and MRP that are described below separately;

ERP

• It is an Enterprise Resource Planning system
• It can be integrated with any software easily
• It helps the manufacturers to automate as well as streamline business processes
• It helps manufacturers to automate the process of sales, estimates, quotes, and CRM (customer relationship management, human resources, accounting, and project management, etc.
• It ensures a shared database of information.

MRP

• It is a Material Requirements Planning system
• These are standalone system
• It is a business software that helps business/organization manufacturers in calculating the materials that are required for production in what quantity.
• It helps ensure seamless inventory management.
• MRPs includes scheduling, detailed capacity planning, shop floor control, inventory management, as well as some other calculations
• It helps to compare the results of forecasts with actual data
• It helps analyze the performance

It helps improve processes for better efficiency.

MRP and ERP are often confused because they seem to be the same in the beginning. MRP is considered to be a solo software which means that this will have the ability to function on its own. ERP, on the other hand, is integrated. This means that ERP can easily be placed and connected to different modules and other software that will make it work better. Take note that both systems can be used to help you run your business smoothly. It would depend on you which one you would choose depending on your business priorities. MRP is more focused on the manufacturing process as compared to ERP.