Material requirements planning (MRP) is
a computer-based information system that translates the finished product
requirements of the master schedule into time-phased requirements for
sub assemblies, component parts, and raw materials, working backward from the
due date using lead times and other information to determine when and how much
to order.
MRP is designed to answer three questions including what is needed?
How much is needed? And when is it needed? Whereas, enterprise resource
planning (ERP) represent an expanded effort to integrate standardized record
keeping that will permit information sharing among different area of an organization
in order to manage the system more effectively (William J. Stevenson, 2014). As a matter
of fact, these two notions are also quite relevant and related to each other in
many different ways and aspect but in this paper we will point out three
fundamental relationships between MRP and ERP.
Firstly, majority of ERP applications also contain MRP
capabilities built in that include materials management, shop floor management,
bills of materials, quoting, and work orders (Ledford, 2014).
Additionally, in construction a materials planner might use both ERP and MRP to
determine the right amount of concrete, drywall, or other building materials,
which might be needed to complete the construction project (Bliss, 2014).
Likewise, MRP and ERP systems are spectacularly run on the proposition together.
So small shops may have only a single-user system or a small network, whereas
larger organizations may have networks with workstations in every part of the
facility. Both MRP and ERP systems increased an organization's information
visibility and availability.
Secondly,
MRP is a part of enterprise resource
planning (ERP) as it may cover the period of time when a product is ready
to be made; the raw materials will be identified and obtained. Once production
steps are planned, resources will be identified. Apparently, ERP and MRP are
quite closely related in the world of business since data and scheduling
resources located within an enterprise resource planning (ERP) are often used
to ease materials requirements planning. Particularly, MRP also processes
significantly by engaging with the planning use of materials necessary for manufacturing
business products, hence a materials requirement planning is also a common
function consist within an ERP. For any growing business enterprises, it is
crucial to have a trustful and user-friendly ERP system, which combine with a
real and actual MRP module. By all means, ERP and MRP would be able to
organize, schedule or even reschedule materials as far in the near future (Material Requirement Planning (MRP), 2010). Equally
important, MRP and ERP software also has the same focus, which highly
concentrate on increasing efficiencies for the course of a job and ERP takes a
wider and longer view, over all jobs from end to end (Adesoba, 2015).
Lastly,
ERP and MRP could provide user with an instant picture of projected inventory
investment levels plus projected new purchases following with an expected plan.
This provides a clearer value-added dimension for directing the plan, which
focus on the most remarkable areas of the investment. As a result, this also
helps to prove and verify a plan financially and smooth adjustments before
committing your cash. On the other hand, ERP and MRP also have a similar
purpose, which aim to give information that will allow the company to have
enough inventories on hand to fulfill demand, which is available only when
needed at a quality level that meets requirement, and at the lowest price.
Indeed, ERP and MRP module can contribute to the basic needs of keeping inventory
levels low and satisfying customer expectations for on time delivery (Material Requirement Planning
(MRP), 2010).
Yet, ERP and MRP could assists user in getting material on hand when needed for
production or sales.
On
the other aspects, we also assume that MRP and ERP are quite relevant to each
other and function similarly or differently depend upon different industries.
So MRP typically is used in manufacturing companies, while ERP can apply to any
companies.
-For
business processes: ERP and manufacturing resource planning could apply to all
business processes in a company, which may include manufacturing, planning,
finance, order management, inventory, distribution and purchasing. Meanwhile, material
requirements planning usually refer to the material planning processes in a
manufacturing company.
-For
technology: ERP might contain supporting technology including networks,
databases and hardware. Normally, it is often viewed as a backbone system that
supports other systems or technology. While, material requirements planning
usually concentrate on business process-enabling software.
-For
project scope: Implementations that involve ERP are broader in scope and give
larger impact on processes and people than MRP. Whereas, material requirements
planning is often pointed out as a module within either manufacturing resource
planning or ERP.
-For
complementary technology: Product life cycle management (PLM), customer
relationship management (CRM), enterprise asset management (EAM) and supply
chain management (SCM) can be viewed or seen as additional software outside the
scope of ERP and MRP (Turek, 1993-2015).
Bibliography
William J.
Stevenson, S. C. (2014). Operations Management. MeGraw-Hill Education.
Ledford, J. (2014, July 10). Material Requirements
Planning: What's the Difference Between MRP and ERP? Retrieved from
it.toolbox.com: http://it.toolbox.com/blogs/inside-erp/material-requirements-planning-whats-the-difference-between-mrp-and-erp-62059
Bliss, H. (2014, December 30). What Is the Difference
Between ERP and MRP? Retrieved from wisegeek.com:
http://www.wisegeek.com/what-is-the-difference-between-erp-and-mrp.htm
Adesoba, V. (2015, January 14). Compare Manufacturing
Resource Planning (MRP) Software. Retrieved from softwareadvice.com:
http://www.softwareadvice.com/manufacturing/mrp-software-comparison/
Material Requirement Planning (MRP). (2010).
Retrieved from eresourceerp.com:
http://www.eresourceerp.com/Material-Requirement-Planning.html
Turek, B. (1993-2015). Difference Between ERP & MRP.
Retrieved from ehow.com:
http://www.ehow.com/facts_6739090_difference-between-erp-mrp.html
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