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.