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A Brief Guide to ERP Versus MRP

MRP vs ERP: What are the Biggest Differences?

It can be hard to differentiate between ERP and MRP, largely because of their similar acronyms and their mutual presence in the manufacturing industry. However, they have many distinctions that affect how exactly they are used in a business. Let’s take a look at some of the most significant discrepancies between MRP vs ERP:

  1. ERP: In its strictest use, ERP stands for Enterprise Resource Planning. This means nothing more than a planning systems that covers a large number of business functions within a company. While M&R focuses more specifically on manufacturing with tracking the implementation of a purchase order and shipping, ERP encompasses financial and management information as well.
  2. MRP: MRP stands for Manufacturing Resource Planning. This is a system that is an extension of ERP that focuses specifically on manufacturing and production and leans more on data interchange processes. Most ERP’s include MRP modules.

ERP Benefits:

Limits the Need for Human Error:

By creating a system for completing all of the important tasks within a business, something that can be done by a computer, man power is saved while manufacturing resources can be utilized more efficiently.

Lowers Cost:

Because the functions that are completed within an ERP are all pre-determined and pre-programmed, time is saved. If done correctly, it can be possible to cut up to 30% of wasted time.

Improves Quality:

Manufacturing is completed in batches. As minimal work is churned out while a product or service is finished, thorough quality checks are more possible. This prevents many of the time consuming corrections that are common in traditional manufacturing.

MRP Benefits:

Increases Flexibility:

MRP allows manufacturing to be broken down into smaller units that are easier to manage and produce. As the efficiencies of ERP are multiplied, costs are reduced as well.

Gives Better Productivity:

The task of scheduling is greatly simplified with MRP, allowing for synchronization of production and sales.

Improves Performance:

MRP allows for better reliability of purchases and production.

It can be hard to tell exactly what process your are using when it comes to ERP vs MRP. It can be beneficial to consult with a business accountant, who can assist you with this decision.

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