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 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 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.
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.