Why are Manufacturers Turning to ERP manufacturing Software in 2022
Manufacturers are well acquainted with manufacturing resources planning (MRP), and ERP systems take it to the next level. An ERP system has all the elements of an MRP and also integrates them with other departments’ functions, such as materials, inventory, and purchasing.
An ERP system is a business management software that includes modules for each department and helps to coordinate and integrate those functions, so every department works toward common goals. Manufacturers use these same types of systems — but before, they were typically referred to as MRPs or MRP IIs because manufacturers used materials requirements planning (MRP) to plan raw material needs in advance before actually placing orders for raw materials from suppliers or purchasing agents.
What is the Difference Between MRP and ERP software?
The primary difference between ERP and MRP is that ERP systems help plan and automate various back-office business functions, whereas MRP systems focus on materials management. ERP directly deals with accounting, manufacturing, supply chain, customer management, quality, processes, and planning.
MRP systems are also referred to as materials requirement planning (MRP) systems or production requirement planning (RRP) systems. MRP is a method of computer-controlled information processing for ordering parts and raw materials based on the firm’s projected future sales or orders received from customers. MRP uses restrictions of available raw materials and capacity to determine when the system should release specific production orders to arrive at the proper place at the proper time without tying up too much of a plant’s resources in work in process inventory.
ERP software typically includes finance and accounting modules, human resource management, e-commerce, project management, and manufacturing.
The differences between these two systems can be summarized as follows:
- MRP is a subset of ERP
- ERP focuses more on planning business activities in general
- MRP focuses specifically on the materials used to run the manufacturing process
- MRP considers capacity when sending out orders, which is not necessarily done with ERPs
Manufacturers must work quickly, efficiently, and with a high degree of precision. To do this, manufacturers rely on manufacturing systems software to help in all production management steps. While utilizing an MRP II system that tracks materials from the point when they enter the factory until when they are used for production or discarded can be efficient, today there is an even better way to improve manufacturers’ efficiency: ERP manufacturing software.
Today, more and more companies have been looking for a way to stay competitive in their respective fields. One of the most effective ways for this is by implementing modern technology that provides them with a strategic advantage. One of these technologies is Enterprise Resource Planning or ERP manufacturing software.
How Does ERP Manufacturing Software Work?
ERP Manufacturing Software streamlines what has been a notoriously difficult task. In fact, before implementing an ERP system, manufacturers spend up to 25 percent of their time planning — time that could be spent designing new products and improving existing processes. Inventory management is another area where many manufacturers spend significant time and resources and can benefit from utilizing ERP systems. Today’s best ERP systems are designed with modern manufacturers in mind.
Manufacturers are just starting to discover the power of an ERP system. Manufacturers that have not yet implemented an MRP II system or upgraded to an ERP system will find more reasons for doing so — with improved accuracy, increased productivity, and greater efficiency throughout all manufacturing stages. The more efficient a manufacturer’s operations are, the more competitive they become compared to businesses that work less efficiently. Consumers drive this demand for better-priced merchandise to retailers across the country. To meet consumers’ demands, manufacturers must always strive to operate more efficiently while maintaining high-quality standards throughout all aspects of manufacturing. With advancements in technology over recent years, it is now easier than ever before for manufacturers to implement an ERP system.
ERP manufacturing software provides manufacturers with the ability to do more with less. Manufacturers can take advantage of advanced technology that will help them move toward true lean manufacturing, which is the goal of every manufacturer today. With advanced MRP II solutions and ERP systems, manufacturers can bring all aspects of their business together, improve efficiency, and stay competitive in 2022.