Difference Between MRP and ERP

Today there exist several technological advancements that have made human’s lives easier and better. There have been seen tremendous growth in various industries, and many strategies have been implemented to make sure that the products from various companies give a better experience to the customers development.

To grow the company’s sales, many companies adopt various planning systems and business strategies. However, two of those systems or strategies are 1. MRP or material requirement planning, and 2. ERP or enterprise resource planning.

MEP vs ERP

The main difference between MRP and ERP is the main purpose of these respective concepts. The main purpose of material requirement planning is to provide the material required for a certain project and keep track of the material availability. On the other hand, the main purpose of enterprise resource planning is to strengthen various processes involved in the workflow by using data management.

MRP and ERP

MRP or material requirement planning is a strategy that is implemented to keep track of various materials that are required and to check the availability of these materials. The concept of material requirement planning was adopted by many companies initially in the 1970s.

ERP or enterprise resource planning is a strategy that is used by many companies to increase and unify the workflow and several processes that are involved in it. It was adopted by many companies in the early 1990s. There have been seen immense growth in the audience that has adopted this technique.

Comparison Table Between MRP and ERP

Parameters of ComparisonMRPERP
Full formMaterial Requirement Planning.Enterprise Resource Planning.
CostLessMore
TypeSoloIntegrated
Number of AudienceLessMore
Software CombinationIt can be combined with other software but it is difficult to do so.It can be combined with other software and it is easy to do so.

What is MRP?

MRP is Material Requirement Planning. It is a step or a stage that some people choose to adopt in their respective business or company. Every company requires materials for their products, and keeping track of these materials is a necessary thing. Material requirement planning covers the status of these materials.

This technique has been in practice since the 1970s. It involves many steps. The main function of this strategy is to cover all the aspects related to the raw material that is required for the production of the items. In the early times, many popular companies like Rolls Royce and Toyota adopted this technique to strengthen and schedule their business plans.

Right from checking the availability of the materials to managing the storage of these materials, everything is covered in this strategy. It helps in many ways. It avoids the wastage of material, and the material is used thoroughly by the company since the data regarding the material is up to the mark.

There are several advantages of implementing this strategy. A company or a business can increase their productivity, customers can rely on the companies, and they will not have to worry about material wastage since the track will be kept, inventory management can be improved and optimized.

What is ERP?

ERP is the Enterprise resource planning. It is also a type of business strategy that is implemented by various businesses and companies. Both small-scale and large-scale businesses can adopt this strategy, but it is more suitable for large-scale businesses and companies.

In a company or a business, there are several financial and functional processes that take place during a deal between a customer and the shareholder. During these times, the collaboration between the customer and the company is built even more, and the entire network system is maintained.

With enterprise resource planning, the data relevant to the workflow is stored in one place, and everything is available there. Even though it costs more, it helps to unify and increase the workflow and several processes that are engaged in it. Apart from that, it also makes use of several tools to predict and source various production strategies for the development of the company.

There are several advantages of implementing enterprise resource planning. Many companies often find it difficult to find a suitable strategy for growing their business. By implementing the enterprise resource planning strategy, a company can manage several processes, and the growth can be sped up. It also helps to outgrow the old strategies that do not work for the current market system and help to find and implement newer strategies as the demand in the market changes.

Main Differences Between MRP and ERP

  1. MRP stands for material requirement planning. On the other hand, ERP stands for enterprise resource planning.
  2. The combination of material requirement planning with other software programs is a difficult process. On the other hand, the combination of enterprise resource planning with other software programs is an easier process.
  3. Material requirement planning has applications in a lesser range of works. On the other hand, enterprise resource planning has applications in more range of works.
  4. The material requirement planning has fewer users. On the other hand, enterprise resource planning has more users.
  5. The cost of material requirement planning is less. On the other hand, the cost of enterprise resource planning is more.

Conclusion

Both strategies have been proving to be extremely useful for various companies and businesses. These strategies help grow the business, and they also help to gain a lot of profit. These strategies are adopted by various companies, and sometimes they don’t work that well. In such cases, companies try to find newer techniques.

Sometimes companies don’t implement these strategies and often lag behind in the market, which thereby results in less profit. However, a company must keep adopting newer strategies and settle for an appropriate strategy. As the demand in the market changes, the strategies often are no longer applicable, and thus, a company must be ready and acceptable for the changes as well.

References

  1. https://repository.ubn.ru.nl/bitstream/handle/2066/45820/45820.pdf
  2. https://www.emerald.com/insight/content/doi/10.1108/14654650010312570/full/html
Help us improve. Rate this post! Total (0 votes,average: 0)