About the Author
While looking at ERP systems, you may have come across information about MRP systems. It can be hard to know which one your shop needs and even harder to find out the difference between them. The reason it’s hard to find the difference is that one is an evolution of the other.
MRP and MRP II Systems
The first MRP system was made in 1964. At that point, MRP stood for Materials Requirements Planning. These systems could track production scheduling and inventory management and not a lot else. By the 1980s, MRP II was available. MRP II stands for Materials Resource Planning. This system could do limited accounting and forecast what inventory would be needed. MRP II is all about materials, BOMs (Bills of Materials), and finished goods. Even with these new abilities, MRP II is still pretty basic compared to what most manufacturers use now.
An ERP (Enterprise Resource Planning) system is the evolution of MRP II. Instead of only being focused on materials, ERP systems also give you full accounting, communication automation, and much more. In addition to adding more abilities, ERP systems have also improved on some MRP II features. For example, ERP systems can create a schedule for your shop based on all of your jobs’ due dates. ERP systems even allow you to make a “what-if” schedule easily. An ERP system even also makes your shop more efficient. Everything is streamlined in one system, so information only has to be input once and then everyone in your shop can see it.
The question is not really about the difference between MRP II and ERP, but about what each system can do. While MRP II certainly has its uses, an ERP system gives you a complete look at your shop and allows you to use one system from quote to cash. Being able to see everything in your shop makes it run more smoothly and allows you to make more informed decisions. If you’re interested in more information about what an ERP system can do, click below.
Stay on top of industry trends and insights.
Subscribe to the Big Ideas for SMBs blog.
About the Author