Keeping Up With ERP

First there was MRP, then MRP II. Enterprise Resource Management now represents the leading edge in management techniques for manufacturing companies. Information is a valuable corporate resource and companies that gather and understand it have a distinct advantage over those that do not. Enterprise Resource Planning, otherwise knows as ERP, is one of the tools enlightened manufacturing firms use to leverage their information into a competitive edge. ERP has helped managers reduce lead times, boost productivity, and dramatically improve customer service and satisfaction. ERP is the direct descendant of Material Resource Planning (MRP), a software package that emerged in the 1960s. It helped manufacturing companies plan their activities and track materials. Before then, a number of mechanical systems were used, including card systems and spreadsheets. MRP instead uses computer hardware and software to calculate material needs based on a forecast or actual customer orders. It gave managers the ability to tie purchasing and production activities to future demand. MRP, which covers only materials, eventually gave way to MRP II, which adds resources such as people, machines, and warehouse space to the mix. After all, these resources are as critical to meeting customer demands as raw materials. MRP II systems are usually a suite of hardware and software applications that track and manage information that supports planning and helps carry out the plan. It can include customer-order management, inventory control, production control, purchasing support, product-data management, finance, and accounting. ERP arrived on the scene in 1993. It includes all of MRP and MRP II, and adds software applications that track additional outlying functions to manufacturing such as marketing support and post-sale field service. ERP hardware/software is usually built around a relational database and hosted on an open system in a client/server configuration. As a rule of thumb, companies generally spend 1 to