ERP vs MRP: Which is the best option?

The management of business resources is usually one of the most important and vital tasks within an organization, since all departments function efficiently and harmoniously on it. Decades ago this entire process was done manually, but for a couple of years there have been different software and platforms that facilitate the management of companies: these are ERP systems and MRPs.

What is ERP software?

Let's start by talking about what each of these systems is. ERP software refers to an enterprise resource planning platform, as indicated by its acronym Enterprise Resources Planning. They support companies precisely in that, in managing their resources.

This class of software, as indicated by Microsoft on its website, allows "to coordinate the flow of data between the business processes of a company, providing a single source of information and streamlining operations throughout the company".

Through an ERP solution, a company can unite its entire workflow, so it can manage everything from finance and supply chain, to manufacturing, reporting, and HR team tasks.

What is an ERP system for?

ERP solutions came to organizations to simplify work and allow teams and departments to work more efficiently since the classic thing is to see a company with a system to manage its finances, another software for its operations, and a different one to manage resources. humans, for example.

“What makes today's ERP software different is that it brings all these different processes together into one seamless system. It not only offers data connectivity within your ERP system, but also within your productivity tools, eCommerce, and even customer engagement solutions. It enables you to connect all your data for better insights that help you streamline your processes across your business,” they added in the Microsoft article.

When is the time to implement ERP software?

A good opportunity to ERP implementation is when you feel that decision-making in your company is deficient and you need greater speed and capacity for action. With ERP software, you will quickly have all your business data at hand, necessary to make the right and timely decisions. Quick access to information will always result in optimal business performance.

If you feel that the different teams of the departments are not working closely aligned to the main goals of the business, if you unite all their systems in a single ERP system, each department will be able to see the activities and performance of the other, being able to work more in sync and complementing their talents.

Also, if customer service is not agile, you can raise the quality and speed of service with an ERP solution: the worker will only have to visit one platform to meet the customer's requirements, instead of opening three platforms to respond your doubts.

Let us now define what is an MRP software

The acronym MRP refers to Material requirements planning and is nothing more than a planning system for material requirements in a company. Thanks to MRP software, "manufacturers increase production speed, offer a wider variety of products and reduce their costs by more accurately estimating material requirements," they explained in an SAP article.

“MRP is a system designed to plan manufacturing production. It identifies the materials needed, estimates quantities, determines when the materials will be required to meet the production schedule, and manages lead time, with the goal of meeting demands and improving overall productivity", added in the same post.

What are the benefits of an MRP software?

MRP software is especially beneficial for those companies that manufacture products, as it makes it much easier for them to plan all material, production, and inventory management. Above all, MRP platforms are efficient if your product manufacturing is complex, as it greatly supports organizations with complex calculations.

• There is more control over inventory

“Accurately monitor and display supplies in stock, what is needed, and supply costs to meet demand. It identifies specific materials and components for purchase and dates by cross-referencing stock levels with order requirements, then automatically places orders", detailed in an article published by the Deacom portal.

• Helps reduce selling costs

Why do you accomplish this? Because MRP software helps companies find the most cost-effective options for materials and components they need for production.

• Prevent bottlenecks

As there are problems in the supply chain, production will obviously be affected, which can be a "bottleneck". MRP software is trained to detect any kind of problem, anticipate them to offer timely solutions.

ERP vs MRP: Which is the best option?

First, it is necessary to be clear about the focus of each of the platforms: “The main difference between ERP and MRP is that ERP systems help plan and automate a series of back-office business functions, while MRP systems focus on materials management”, they indicated in this regard in a QAD article.

The MRP software is usually focused more than anything else on the management of production materials, while the work of an ERP software is usually broader, since it includes the management of accounting, human resources, operations, inventory, among other aspects of a company. organization.

Choosing an ERP or an MRP will depend on what kind of need your company has. If you want to handle only production aspects, then an MRP will suffice. If, on the other hand, you want to unify the management of the different business departments, the best is an ERP.

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