The primary relationship between Materials Requirements Planning (MRP) and Enterprise Resource Planning (ERP) is that as ERP is used to manage and plan all the resources in a company, MRP is executed to manage the resource used particularly in the manufacturing process. For instance, while ERP may incorporate accounting, HR, customer service, manufacturing, and project management departments, MRP particularly incorporates the manufacturing department. So while MRP is a specific system just to plan the resources for manufacturing, as the movement to ERP is made, it turns into a broad and complete system that incorporates numerous departments in a company.
MRP is mostly used to ensure that the right amount and kind of materials reach the right destination inside the given time limit. Planning and scheduling are used in this system that decide the “what number of and when”. MRP tends not to incorporate the finance and accounting department and typically deals with the sales, work orders, quotes and invoicing. The advantages of MRP system incorporate diminished costs of production caused by organized resource planning, enhanced response to market demand, time optimization because of scheduling and advances in planning and allocation. In contrast, some of the disadvantages of MRP incorporate the long procedure during implementation, training and instruction costs on showing workers and staff how to utilize the system to acquire all advantages anticipated to be provided when initially implemented. ERP uses a common database that all departments can access and is used to bring into line resources all the way through those different departments. There are numerous advantages of implementing an ERP system. Firstly, it makes one single stage to plan the resources over all departments. Along these lines, everything is centralized and data duplication can be stayed away from. Processes like inventory and order tracking and still sales forecasting is made easier by an ERP system. Some of the disadvantages of it incorporate high costs of implementation, not have of testing for functioning prior to using, and complexity in customizing crosswise over departments in decentralized businesses. Moreover, the employees who will be working with the system on an every day basis should be all around trained to accomplish all the advantages connected with the system. These drawbacks make it vital for the business to appropriately test the system before beginning its use.
The main contrast between them is that ERP covers more departments than MRP does. In this manner, after assessing company needs on whether a system to cover all departments is needed or not, a company can make a better decision on the investment made on either an ERP or an MRP.
References
Rajesh K. (2011). Nirvana & WordPress Web site. Retrieved April 21, 2016 from http://www.excitingip.com/2010/advantages-disadvantages-of-erp-enterprise-resource-planning-systems/
Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations Management in supply chain (6th ed.). New Delhi, India: McGraw Hill Education (India) Private Limited.
Source: Advantages and Disadvantages of an MRP system. (n.d.). ExpertsMind IT Educational Web site. Retrieved April 21, 2016 from http://www.expertsmind.com/learning/advantages-and-disadvantages-of-an-mrp-system-assignment-help-7342872741.aspx