Material requirements planning (MRP) software and enterprise resource planning (ERP) software strength sound similar, but this program serve very different functions. Ultimately, MRP is better suitable to brands that want to manage their manufacturing processes and computerize preparation. These programs handle inventory control; tackle delivery schedules and delegate staff, with an overriding emphasis on order management optimization. ERP, on the other hand, automates a huge number of back-office functions supply chain management, human resources, IT and much more providing businesses with a more comprehensive, generalized solution than MRP. But which of these two programs is better?
MRP provides brands with the tools they need to manage a product's lifecycle, from developed through to distribution. This software gathers data for more effectual logistics planning, inventory control and product replacement and ensures customers receive orders on time. There are limits with MRP programs often require lots of manual input from users, for example but, ultimately, this software simplifies many of the purchasing and manufacturing activities associated with business process management.
Research suggests that MRP generates tangible results. One company had less than 75 percent of its orders completed on time prior to using MRP, according to a case study. This number skyrocketed to 97 percent after MRP implementation. Improved customer service, improved direct labor productivity, lower purchasing costs and condensed inventory shortages are just some of the benefits of this software.
ERP automates the day-to-day tasks that come with organization a business, such as shipping, project costing, payroll management and staff acquisition. Unlike MRP, this software manages manifold core business processes at the same time. There's no need to switch between two or more applications the software integrate everything. For the best results, companies need to combine ERP with other software systems in their organization, which requires an initial investment. However, these programs provide businesses with a significant return on their investment post-deployment.
Countless studies show the benefits of ERP. Research shows that mid-sized companies that use this software increase on-time deliveries by 24 percent, reduce operational costs by 23 percent and lower administration costs by 22 percent. This software doesn't always produce desired results, however. Seventy-four percent of ERP projects go over budget and 40 percent of ERP users experience major operational disruptions shortly after implementation.
Usually, MRP programs are separate systems. These databases don't interact with an organization's other programs, meaning users have limited access to data. ERP, however, integrates a variety of modules and applications, producing a broad range of data from a central location. This multiple module software offers companies more suppleness when it comes to problem-solving and making quick business decisions. ERP also allows for better customization. Ninety-three percent of ERP users have customized this software to boost productivity in the workplace.
The differences between MRP and ERP might seem subtle to some brands, but they could make or break a company's success. ERP provides a solution to the bulk of organizational problems, delivering a powerful platform for better decision-making and monitoring. This software incorporates various functions into one application, making it an all-encompassing system that facilitates business growth. While MRP still proves useful for reorganization manufacturing processes, many of these functions are better served by ERP systems.