ERP vs. MRP: What’s the Difference?

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About 87% of employees believe that management needs to rethink how technology gets used within the company. They say that outdated technologies cost businesses opportunities.

They use too many communications and project management tools to run the business. That causes silos to develop and projects to become fragmented.

Communications and customer experience issues become commonplace. Two solutions that companies turn to in order to break down these silos are ERP and MRP.

In comparing ERP vs. MRP, you’ll find that there are several differences. Which one you should use depends on your business needs.

Read on to learn about ERP and MRP and how you can decide which solution suits your business.

What Is ERP?

Enterprise resource planning is the definition of ERP. It helps enterprise-level organizations manage all aspects of the business.

ERP is a powerful solution because it centralizes critical information. This breaks down silos because everyone has the same access to information.

That enables teams to work more efficiently and communicate effectively.

An ERP system is highly customizable. That allows you to tailor the software suite to meet your needs.

An example is IFS ERP. There is an IFS ERP Application for finance, HR, manufacturing, and project management. Applications give your business the flexibility to choose the ones that you need the most. 

What Is MRP?

MRP stands for material requirement planning. This solution came about in the 1970s so manufacturers could track and manage raw materials in mass production facilities.

It’s a forecasting tool focused on supply chain management. Manufacturers know which materials are available, the quantity of the material, and when it’s time to order more.

Today’s MRP suites have automation features that order more materials when stocks get low.

Comparing ERP vs. MRP

What are the main differences between ERP and MRP? Besides the age of the technologies, you’ll notice that MRP is limited in scope when compared to ERP.

It’s only for manufacturers and it’s stand-alone software with a very narrow focus. On the other hand, ERP is used by a variety of industries, from aerospace to pharmaceuticals.

ERP is scalable and allows companies to manage the entire business. You can integrate MRP with ERP, giving you full control of manufacturing and other aspects of your business.

There’s also a difference in cost. ERP costs more than MRP, but that’s because ERP handles so much more of your business.

MRP limits the number of users since it’s only used in manufacturing. ERP systems let you have almost unlimited users.

Which one should you choose? It depends on your business needs. If you want to streamline all of your business processes, ERP is the tool to use.

For companies that have a limited budget and only need to manage to manufacture, MRP is your solution.

Better Management Solutions With ERP and MRP

Companies that need to improve their business processes have many solutions to choose from. Two clear winners are ERP and MRP.

When you compare ERP vs. MRP, you’ll find that ERP is the better choice for managing the entire business, while MRP focuses on manufacturing.

Now that you know what ERP and MRP are, you’ll need more business tips to manage your business. Check out the Business section today!

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