Differences Between MRP & ERP

There are a lot of manufacturing companies who fall into the trap of thinking that MRP & ERP software are the same thing. Often this leads to a firm being pushed into a decision where they choose an ERP system over MRP when it is not really what they needed at all.

To avoid this happening to more unfortunate businesses, we’ve put together a handy little blog to discuss the differences and clear up any confusion you may have about MRP & ERP software.

What Is ERP?

ERP is an abbreviation for “Enterprise Resource Planning”. ERP software refers to an information system that is built to help a business take control. They can manage resources, review information and automate processes within their “enterprise”.

Most ERP systems consist of a database which produces interfaces for users to see information that they need to view about each department and process within a business.

ERP can help a business with more than just manufacturing processing:

  • Accountancy – Produce and view ledgers, fixed assets and custom reports
  • HR – Produce reports for payroll, manage time sheets and training schedules
  • Supply Chain – Control stock, purchasing and delivery scheduling
  • Sales / Marketing – Use of CRM to support customer service and produce data lists to market to customers
  • Project Management – Record tasks, costs and time taken and produce reports
  • Document Management – Without the need for a paper based solution

How Does MRP Differ?

MRP can have 2 different interpretations. MRP can either stand for Materials Requirement Planning, an older more basic form of software, or MRP II which is more commonly known as Manufacturing Resource Planning, from which ERP evolved.

In essence MRP II is an ERP system that remained true to its manufacturing roots. It didn’t take on all the processes that ERP has in terms of managing and planning other departments and types of businesses aside from just manufacturing.

ERP is often deemed as more beneficial for the everyday business and is quite often presented as a single solution to managing an entire company, whereas MRP often focuses on key processes specific to the manufacturing industry such as:

  • Quoting Manufacturing Jobs
  • Job Costing
  • Sales
  • Producing Work Orders
  • Stock Control
  • Purchasing
  • All other processes through to delivery and invoicing

Traditional MRP systems often exclude processes like accounting, but sometimes this is not the case and most custom MRP software specialists now integrate accounting into their systems.

So in short, MRP may be seen by some as ERP that is simply more focused on the manufacturing processes within a business, rather than trying to manage the planning for the company as a whole. Visit our recent blog to find out more about what MRP is.

Deciding Between MRP & ERP Software

Making the decision between the systems can be quite challenging. The best advice is to always consult an expert who can help you determine which system is right for you. Buying and implementing off the shelf software without consulting an advisor, generally ends badly for most businesses.

Without proper consultation, businesses can throw themselves into a tricky situation. If you opt for MRP when you really needed ERP to manage your business, then you’ll have sold yourself short. The software won’t do absolutely everything you were expecting from it. However, if you are a manufacturer and opt for MRP you might find yourself paying over the odds for a system that does way more than you needed it to. So it won’t be put to the best use for your money.

So What’s Our Advice

Our best advice is to always call an expert. We’re here to help and we can even give you a free demo of our very own system so you can see which system would work best for you.

If you contact us today by completing our enquiry form, one of our team will get in touch with you and help to set you on the right path when choosing between MRP & ERP.

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