Managing the shop floor, inventory, operations, and scheduling are some of the keys to ensure a manufacturing business runs smoothly. As manufacturing and supply chains scale to meet larger global needs, real-time data and software systems allow manufacturers to automate processes and make smart data-driven decisions. Two commonly implemented software systems are ERP (enterprise resource planning) and MRP (material requirements planning). Learn the differences and benefits of each software system, when your business may need an ERP or MRP system, and see how they can work seamlessly with one another to help streamline your business.
What is an MRP System
First, what does MRP stand for? In the manufacturing world, the acronym refers to Material Requirements Planning software systems. MRP software is used to help forecast the demand of materials and the capacity of resources. MRP systems are one part of a larger ERP (Enterprise Resource Planning) system, which is used for planning and management for all aspects of a business. ERP systems include tools like accounting, customer relationship management (CRM), human resource management (HRM), supply chain management, and so on.
Leading manufacturers worldwide are moving to MRP-based systems. However, there is no single authority in the MRP world. Some experts say that MRP systems can have different functions, while others say that they are not interchangeable. In many cases, your ERP and MRP system needs will be fulfilled by a third-party vendor if you haven’t chosen one already.
The basic objectives of an MRP system include:
- Making sure the right materials are available for production
- Ensuring products are available for delivery to customers
- Maintaining inventory levels of material and finished products
- Planning manufacturing activities, sales orders, and purchases
MRP Key Features
The basic functions of an ARP system typically include:
- Stock control
- Production scheduling
- Inventory Management
- Supply Chain Management
What is an ERP System
An ERP system contains tools to help with all aspects of business management: finance, sales, HR, marketing and customer service, purchasing, and more. Many manufacturers choose an ERP solution for financial planning and analysis of sales volumes and channel behavior (and profits). These more detailed tools can help you make more data-driven decisions, giving you more flexibility in your decision-making. An ERP system can also integrate with an MRP system to allow for better collaboration between the two systems.
Some companies that have implemented an ERP solution report that it has had a positive impact on both efficiency and profits. In many cases, you must choose an ERP solution from the beginning of your business as it is difficult to switch later once processes are established.
Features of an ERP Solution:
Finance: Allows companies to monitor, manage and forecast financial operations so they can build and maintain healthy relationships with investors and creditors.
Sales: Allows companies to track sales and track inventory levels. This allows sales teams to focus on closing deals and hitting sales goals.
Supply Chain Management: This feature helps companies manage their production in a way that is most efficient. It allows companies to consolidate information into one location as well as better monitor changes in supply and manufacturing capabilities.
Order Management: Allows companies to keep track of orders from customers, suppliers, production, shipping, delivery and customer payment information. This allows customers to receive the product on time at a price that meets the needs of the company that is purchasing it.
CRM: Customers can better communicate with the customers they are trying to attract and these tools help give them a seamless experience across all channels of communication.
Human Resources Management: Helps companies manage their employees’ time and attendance, wage calculations, training management, and employee records. These tools allow companies to better identify which tasks their employees are best at and assign them more efficiently.
Inventory Control/Warehouse Management: Allows companies to manage inventory across the entire supply chain, from suppliers to retailers, as well as track how much product is on hand and where it is for each individual item. This allows businesses to sell slower-moving items while monitoring inventory levels on higher-demand products, or vice versa.
Data Quality: This feature helps companies ensure that their data is as accurate and up-to-date as possible. When companies know that they are using up-to-date information, they can use it to make better decisions and communicate with the rest of the organization more efficiently.
ERP Key Features
- Cost savings due to automation and integration that leads to increased efficiency and productivity
- Better management and monitoring of compliance with regulatory standards
- A reduction in human errors and improperly spent time and resources
- Enhanced communication and collaboration between roles and departments
- Scalable business growth
- Improved partner and supplier management
Interested in reading more about MRP and ERP systems? What Is Material Requirements Planning (MRP)? further discusses what an MRP system is and how it is beneficial for businesses. Modern ERP – Why Market Organizations Need It discusses how ERP has evolved and how crucial it is for any business.
If you would like TSVMap to assist your business with assessing your essential systems and applying the TSVMap methodology to ERP Systems, MRP Systems, Cyber Security, IT Structure, Web Applications, Business Operations, and Automation, please contact us at 864-991-5656 or email@example.com.