On the other hand, because ERP software contains much greater functionality than MRP, there is an equally strong argument for the second claim: MRP is indeed only a part of enterprise resource planning software. And in all ERP, the original principle of MRP is still intact: identify what is needed, how much is needed, and when it is needed. Today, the planning function encompasses much more than materials, but even the newest incarnations of ERP can trace their roots directly back to MRP. Finally, to better describe its broader functionality, the term ERP – or enterprise resource planning software – was introduced. After this, the software suite continued to grow and expand with new capabilities.
The new suite that was formed was called MRP II. After inception, the next evolution of MRP involved integrating the original MRP modules – sales, inventory, purchasing, bill of materials, and production control – and combining them with finance and accounting functions.
You could say that enterprise resource planning (ERP) is a direct descendant of MRP, or you could say that MRP is a component of ERP – and either way, you would be correct. Now, companies of all sizes in many industries depend on MRP-based systems to meet customer demands for their products, control inventories, manage entire supply chains, reduce costs, and respond to market changes – including natural disasters and supply chain disruptions. Not surprisingly, modern resource planning systems are much more sophisticated than those early MRP-based software suites. In today’s hyper-competitive business environment, production efficiency is arguably even more critical.
Aided by the software’s computerized calculations, manufacturers could increase their speed of production, offer a wider variety of products, and shave costs by more accurately estimating material requirements. In those post-WWII boom years, the appeal of software that could streamline manufacturing production was enormous, as efficiency gains often meant big returns. Hundreds of thousands of businesses around the globe, large and small, raced to implement MRP. When introduced in the 1960s, material requirements planning (MRP) was the “killer app,” triggering widespread adoption of business software and the computers needed to run it.
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