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Material requirements planning (MRP) and enterprise resource planning (ERP) are essential parts of a company's decision-making mechanisms. Senior leadership uses both operating tools to improve competitiveness in the short and long terms.
MRP
MRP is a computer system that an organization utilizes to order and schedule items used in manufacturing processes. These items include raw materials, work-in-process goods and completely finished products. MRP is an integral part of corporate production systems, helping senior management budget material costs and monitor production schedules.
ERP
ERP is an accounting-oriented relational database that a company uses to identify and plan resource needs in the short and long terms. A relational database is a data archival and retrieval system that links pieces of information. Corporate resource needs include financial needs and personnel requirements.
Relationship
ERP and MRP are distinct operating tools, yet they generally interrelate. A company's ERP system covers resource needs across the firm, including product planning and raw materials purchasing as well as inventory monitoring and evaluation. Accordingly, MRP is usually a component of a company's ERP system.
References
Writer Bio
Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.
