Nowadays, custom manufacturing software development offers a great variety of choices to help you manage daily business activities and deal with supply chain operations, project management, or accounting. There are many enterprise software solutions to choose from, and even more ideas are yet to come. Each decade, new game-changing technologies occur, and businesses are not only able to use Augmented Reality, Artificial Intelligence, or Cloud computing, but also even find new innovative methods.
If talking about software for manufacturers, such systems as ERP (Enterprise Resource Planning) as well as MRP (Material Requirements Planning) are some of the popular options that we can point out. It is important to know the differences between these two solutions if you want to go for the choice that will be the best one for your company to optimize your resource and let it move in the right direction. Therefore, let’s find out more details of these choices and explore their differences so that it will be possible for you to lean towards success.
ERP vs. MRP: Understanding the Differences of Two Popular Systems
To avoid the possible confusion and be able to make the choice that will be suitable for your company, it is recommended to start with the basics. Knowing what each of the options mean and understanding their differences may lead to fast turnover and make everything clear for you.
Source: Advanced ERP Software for Manufacturing Company
Let’s start with ERP. So, what exactly is the Enterprise Resource Planning system? This type of comprehensively integrated solution is usually popular among the large enterprises and is of a great help in managing resources. ERP centralizes information and business operations as well as synchronizes reports on key metrics. This management software is useful in many ways:
- ERP gives you better management and modernized processes, because you just need to insert information manually once, and it will be automatically processed by the program. It is a good way to automate your daily assignments, because you will be able to pay attention to the high-priority responsibilities, while other tasks will be managed automatically;
- Cloud solutions can also give you better security when you use data encryption or multi-factor authentication;
- It helps you to stay relevant and keep you ahead of your competitors. Thus, you will be able to attract more clients and boost your business;
- Customer satisfaction and enhanced service is what you can expect as a pleasant addition, because ERP allows you to integrate CRM (Customer Relationship Management) components.
Read Also From Chaos to Organized Data Ecosystem. Key Benefits of ERP and CRM Integration
There are no ideal things, and there are no flawless systems, so it is essential to know the possible drawbacks that ERP can bring you:
- It is a great idea to have ERP, but getting familiar with it can be difficult. That is why it is always good to have relevant documentation and train your team if needed. You should know whether the implementation of this system will be tiresome or if your team will be able to handle it smoothly;
- Another thing that you need to pay attention to is the cost. Not only the implementation procedure and maintenance can cost you more than you expected but the overall resources may not be enough. Talk to a vendor team to know the details to decide whether it is worth a shot or not. The overall cost can be increased because of the components the program contains, so don’t forget to also specify these details.
If talking about MRP and placing MRP vs. ERP, the Material Requirements Planning system measures the materials you need, manages inventory levels, and analyses requirements. This is an effective supply planning application that is usually chosen by the product-based manufacturers. It can greatly help you with quality assurance, general accounting, and machine capacity planning. It is a profitable choice, because of many benefits:
- You can ensure that you will have better documentation and KPIs, which immensely improves production planning. And, as a result, you will be able to make informed decisions;
- MRP allows you to have better maintenance and control over the inventory. It helps you to have a thorough understanding of what is available or what you need to replenish;
- With the purchase planning that ERP provides you with, it is possible to get the value that is the most suitable for each particular purchase.
However, you can find some imperfections in this planning management software, which is why it is important to draw your attention to the following:
- It is vital to input precise data if you want to get the best analysis and results. Otherwise, you will have incorrect KPIs and that will lead you to making wrong decisions. Therefore, you will need a team member who be able to perform this task the proper way;
- Like any other software, this one may require special skills from your team and may have a long installation. That is why it is also advised to address the provider and know these details;
- Usually, MRP can be cheaper than ERP, but it all depends on the options the program includes and your resources. It means that MRP can be costly for your company as well.
What ERP and MRP Can Give You and How to Make the Right Choice?
If looking at the features that ERP offers, besides the possibility of integration with other systems as we mentioned earlier, it provides its users with the easier management of accounting and handling the company’s finances. You can also employ the feature of marketing and sales management in order to have more success in reaching your new and current clientele. With the HR function, it is easier to handle current team members and recruiting new ones. The possibility to use Cloud technology and various next-gen technologies, such as VR, AI, etc., makes the supply chain management easier. Depending on your requirements, it is possible to get the system you want with the broad variety of ERP software development services that are available nowadays. Thus, any department of your company will be able to use the one that can manage large numbers of projects.
Read Also How to Implement an ERP Solution that Will Turn Your Business into a Blooming Garden
As for MRP, this specifically designed for the manufacturing industry software also grants you effective accounting management, which helps to monitor your financial and project status. Such a system usually includes a master production schedule as well as inventory management tool that show production plans for products, their capabilities, estimates, and the amount of the materials and goods you have or lack. Bill of Materials (BOM) is another feature of MRP, which captures, manages, and configures all product data during the product life cycle.
Considering the features each application has, you may start doubting which one to go for. If you are struggling with the choice, we recommend you to pay attention to the following:
This is one of the key differences. Having ERP, you will be able to integrate additional functions that can help you with your business processes and the workflow of your projects. MRP, on the other hand, is a standalone program that can also be usually implemented into other systems including ERP. Thus, it offers a bit different services and requires manual input of information, but can provide you with all the needed detailed analysis in narrowly focused processes.
Business Operations to Optimize
Before making your decision, it is important to understand which processes need optimization and how many users will work with the solution you implement. If you want to focus on the manufacturing operations only and your team is not that big, then MRP can greatly assist you. If you need to connect various procedures of different departments to automate them, then the ERP system will be a better choice. It all depends on your goals, requirements, and number of your employees.
As we said earlier, both these systems may require the skills that your team doesn’t have, that is why additional training may be an option. Contact the vendor, know the details of both solutions, but be ready that working with ERP may be more difficult and may take more of the time of your team. Also, look at the applications that you already use. The type of apps you work with may play a crucial role in your decision.
Considering the resources you have, your choice may fall on a certain solution, since the cost that you can spend on each of them is the point you need to think through. The cost of any solution should be commensurable according to the investment that you can make.
It is always hard to choose when you are not sure what you need. If you see that the features that ERP has are the ones that can benefit your business, then go for this option. If MRP is enough for your company, then why not choose this solution? You need to weigh the pros and cons of each system and evaluate if it fits your particular situation. At the end of the day, you can always grab both if you have the needed resources for that.
If you want to know how each selection can be modified according to your business, contact us, and our team will give you a free consultation and help you in building or implementing the solution you truly need.