The Impact of MRP Systems on ERP Development
ERP popularly known as enterprise resource planning software is a system that uses material resource planning (MRP I and MRP II) as its modules. ERP was developed to facilitate effective utilization of materials and production capacities within the supply chain flow of a company using MRP modules. The main purpose of developing material resource planning MRP II software was to ensure that there is a smooth flow of information with the supply chain management, which MRP I had failed to capture. However, MRP II could not meet the expected performance. The shortcomings of MRP II contributed to the development of ERP system, which is multifaceted software that can manage and control various modules that compose a company’s basic functions such as planning, production, management and other related functions, thereby ensuring proper use of resources within the system (Gummer 33).
Because of MRP I failure to meet the anticipated functions of synchronized information flow in different systems, developers worked on different modules that could help eliminate the MRP “nervous” problems (Ho 4023). The impacts of MRPI and MRP II on ERP are varied as system developers relied on the working of MRP I and MRP II to formulate and design ERP. These impact ranges from synchronized information flow in different systems within the supply chain, reduction of lead time as well as ordering time. Manufacturing process is now based on ordering time and customer requirement (Gattiker 2910). This facilitates planning and effective use of resources.
The rescheduling of messages in MRP II calculations was open ended and failed to give a full report on the relevant information pertaining to order levels and production capacity. Similarly, the information could not be relied on since in most cases, it was “nervous” and could only lead to unstable orders within the supply chain (Ho 4024). These limitations of MRPI and MRP II forced system developers and analysts to design diverse software to could improve the performance of supply chain, by providing real time information that can enable decision making. MRPI and MRP II modules were therefore incorporated into ERP as one of its module.
The incorporation of MRP II modules in ERP have contributed to efficiency and effective use of resources within an organization that is involved in the production of goods and services. Good scheduling and rescheduling decisions can now be worked on swiftly. Current organizations and companies can now plan and communicate their decisions to relevant parties. Management decisions regarding the quantity to produce, and the order levels have also improved significantly. This therefore confirms that ERP was an improvement of MRP II, and has helped change information flow within an organization as well in supply chain management.