Difference Between MRP and ERP

ERP stands for enterprise resource management and is probably one of the most common types of business applications, particularly among large corporations. ERP systems, such as MRP software allow you to manage various manufacturing processes such as inventory control, production scheduling, and planning.

All these processes are vital in an organization's success, but sometimes, the entire process becomes a pain since there are too many procedures involved. This is where MRP comes in. MRP, which is abbreviated to "material resource planning", is a computerized system that tracks material and labor requirements and allows you to efficiently use your resources and reduce overall costs. ERP's main advantage is its ability to integrate financial software with other applications. This makes ERP more robust and more efficient.

What are the differences between these systems and what benefits can they offer a manufacturing company? Well, according to MRP practitioners, ERP is the system for the big-scale companies and MRP is a subset of ERP where it deals with the minor companies that are considered small-scale or medium-scale. Small companies are usually flexible and have lower overheads compared to large companies. They can use a smaller version of the ERP that can include order tracking, inventory control, finance, supply chain management, and human resource management. For a manufacturing company, however, all of these applications cannot be installed on one ERP platform as it would require too many customizations and additional work.

On the other hand, MRP is specifically meant for large-scale manufacturing companies and it integrates all these processes into one single system. MRP will bring together many departments under one point of contact (POC). The manufacturing manager will have a complete view of all activities in his company. This way, he can take preventive measures for his company and can optimize its production capacity and productivity at economical costs. Moreover, MRP helps in improving the workflow efficiency of the employees, increases the decadal revenue, and cuts costs on several aspects including labor, operational as well as environmental costs.