MRP vs. ERP: Which is Best for Your Business?
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Both Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) software can help you to effectively manage your business resources. However, there are a few differences between the two. Let’s look at what distinguishes these two software platforms and their top vendors.
What is MRP Software?
MRP software helps to streamline manufacturing processes. It helps businesses to determine the amount of material needed for projects and the timeline for acquiring that material. This ensures that the maximum level of productivity is achieved. This type of software is typically used in the manufacturing industry, although it may see use in other industries. MRP software typically stands alone among a company’s other software tools.
What is ERP Software?
ERP software has much of the same functionality as MRP software. However, ERP software includes functions such as risk management, compliance, and human resource operations that aren’t offered by MRP software. In addition, MRP software acts as a means of centralizing data across a company and across many different ERP software components. This is different from the standalone approach of MRP software. ERP software is used in several business sectors, including in manufacturing, financial, and service-based industries.
What are the Differences?
Manufacturing vs. Other Industries
MRP software is used mostly in the manufacturing industry. On the other hand, ERP software can be used across other industries and departments such as Human Resources and sales. Overall, MRP software is great at managing manufacturing related processes alone. ERP on the other hand can be closely integrated into all of the departments of your business, allowing information to be accessed from a central database. MRP acts as a standalone solution and companies will have to take other measures to ensure that the data from MRP is communicated across the business.
Type of User
Since MRP software is typically limited to managing manufacturing related processes, this limits the type of user that works with the software. MRP software is typically used by staff members in a business who deal with manufacturing operations. This includes those managing inventory and stock. On the other hand, ERP software isn’t this limited. Staff from all departments, from HR, to sales representatives might use ERP software.
Business Size
With that being said, if your business is a smaller one that only needs to manage manufacturing related processes, then ERP would be overkill. ERP is complex and takes a lot of resources to implement whereas, since MRP has a more limited feature set, it can be implemented more quickly. The feature set of ERP software is bigger than that of MRP software. ERP software can be used for things such as customer help desks and email marketing in addition to manufacturing processes. ERP is therefore better for larger businesses that would benefit from all of these different features.
Number of Projects
ERP software can also manage a large number of projects at a time, whereas MRP is usually only used for handling a smaller number of simpler projects. ERP might also contain customer-facing features such as customer relationship management (CRM) tools. These are not included in MRP software since MRP is more focused on helping a business manage its resources.
Cost
Finally, ERP software is more expensive than MRP software. This is because it is a bigger piece of software that has several different components and can be used in scenarios other than manufacturing.
Which One Should I Use?
In order to determine which solution will work best for you, you need to consider a few things which we will discuss.
First of all, if you just want to automate and streamline manufacturing processes, then you should go with MRP software. However, if you need to streamline many different processes like accounting and customer relationship management, then you should look into an ERP solution.
In addition, you should consider what your current software setup looks like. If you have lots of different software packages in addition to an MRP setup, then maybe it’s time to consider getting an ERP. ERP would let you combine some of these software systems into one ecosystem. If you don’t have much else outside of what MRP can handle, then stick with that.
In the case of both MRP and ERP, you should consider that both options require IT resources and personnel to set up and maintain. Staff will also need to be trained. Since MRP isn’t as complex of a solution as ERP, it will require less resources. If you have a business that is solely focused on manufacturing processes, then it wouldn’t be feasible to invest in the additional IT resources and training needed to implement ERP. You should focus on MRP in this case. However, if you have a large business, or, if your business is rapidly growing, then ERP is the best bet for you.
Top MRP and ERP Vendors
MRP Vendors
MRPeasy
MRPeasy is an MRP software geared towards businesses that practice make-to-stock manufacturing. These include businesses in the following industries:
- Automotive
- Aerospace
- Defense
- Lighting
- Wholesale & Distribution
Its key features include:
- Production planning
- Stock control
- Purchasing
- An overview that includes information such as managerial statistics, cost control, and utilization reports
- Integrates with Pipedrive, Xero, and Quickbooks
Overall, MRPeasy is simple to use, flexible, and it has a feature set that is well suited for smaller manufacturers.
Katana
This is a cloud-based MRP solution. It is geared towards businesses that are scaling up. Some examples of this are businesses in the following industries:
- Garment manufacturers
- Breweries
- Companies with 2 – 20 employees
Its key features include:
- Production planning
- Real-time inventory control
- Purchasing
- Integration with e-commerce, shipping, and accounting platforms
Ultimately, Katana will help businesses solve problems with low raw material levels, miscommunication between customers and companies, and forecasting issues.
IQMS
While this solution is technically an ERP, it focuses on manufacturing. This means that it is functionally almost identical to an MRP. Since it has some ERP functionality it is suitable for medium-sized to larger businesses as well as smaller businesses. It is suitable for several manufacturing based companies, such as those in the following areas:
- Automotive
- Medical
- Aerospace
- Defense
- Assembly
- Food/beverage
- Plastics
- Packaging
- Metals
Its key features include:
- Planning and scheduling
- Forecasting
- Warehouse management
- Ordering of raw material
IQMS is easy to use and spans a number of industries, making it suitable for many different companies.
ERP Vendors
Netsuite ERP
This cloud-based solution offers a multitude of features. It is scalable and therefore suitable for medium-sized to large businesses. Since this platform is so scalable, it is suitable for a wide variety of industries such as:
- Retail
- Education
- Energy
- Food and beverage
- Healthcare
- Distribution
Some of Netsuite’s key features include:
- Demand planning
- The solution is easily scaled according to the business
- Supply chain management
- Warehouse and fulfillment capabilities
Netsuite’s features combined with its scalability make it especially suitable for fast-growing businesses.
Workday
This is another cloud-based ERP. It is geared towards managing global businesses that span sectors such as:
- Financial services
- Healthcare and life sciences
- Higher education
- Manufacturing
- Retail and Hospitality
- Service businesses
- Technology
Its main features include:
- Enterprise planning
- Financial and human capital management
- Analytics
- Professional services automation
- Workforce transaction automation
Workday is a powerful solution especially because of its analytics. However, if you don’t have a very large business, implementing it might not be worth the hassle since it’s a big project to implement.
Infor ERP
Infor ERP has great analytics visualizations that help businesses use the financial data provided as quickly as possible since it’s so easy to interpret. This makes it a good match for medium-sized businesses that need to remain competitive. It’s a cloud solution and works well in the following sectors:
- Healthcare
- Public sector
- Distribution
- Food and Beverage
- Aerospace
- Hospitality
Infor’s key features include:
- Finances management
- Distribution management
- Supply chain management
- Customer and supplier relations management
Infor’s data visualization is really quite good which means that some larger companies actually prefer to use it as well.
SAP Business One
This solution can be deployed on-premise or in the cloud. It’s geared towards medium-sized businesses and caters to industries such as:
- Consumer products
- Retail
- Professional services
- Wholesale distribution
Its key features include:
- Purchasing and inventory control
- Customer management
- Business intelligence
- Financial management
The flexibility of being cloud or on-premise deployed makes this an appealing solution for many businesses; especially those that work with sensitive data.
Wrapping Up
Whether you choose to go with MRP or ERP software has to do with what industry you’re involved in. If your organization is in the manufacturing industry, then the vast feature set of an ERP may be too much for you. Consider the scope of functionality that you need and see if an MRP or ERP solution fits your needs best.
