Manufacturing resource planning (MRP) systems, which have been intensively developed since the early 1960s, are now present in almost all integrated information systems that help in enterprise management. The main idea of MRP systems is that any accounting unit of production materials or components product must be in stock at the right time and in the right quantity. According to researchers, the primary inputs of MRP are a bill of materials, a master schedule, inventory records file (Stevenson. 2014, p. 496). One of the main advantages of MRP is that it helps to minimize the costs of managing raw materials and products in stocks. In addition, it assists supervisors in determining the amount of each component for a given order size. Another benefit of using these systems is that it provides information that is needed to decide when to release orders for each component or when items need attention. For this reason, it would be safe to assume that MRP is a sufficient way to manage production.
Nevertheless, since these systems had been developed a long time ago, new types of resource planning were also created. Enterprise resource planning (ERP) is considered to be the next progress step since it has additional benefits. One of the many advantages is that an ERP system combines information about different types of resources on a single computer. In this way, companies could easily manage orders, supplies, and finances. Since the mid-1990s, ERP has become extremely popular in the manufacturing sector as its use for resource planning has significantly reduced lead times. Moreover, the use of ERP helped enterprises to reduce inventory levels and administrative staff while also improving the process of acquiring customer feedback.
References
Stevenson, W. J. (2014). Operations management. McGraw-Hill Education.