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In the 1960s, consumption had enormously risen due to the post-World War II economic boom. Manufacturers worldwide struggled to keep up with market demand, making inventory tracking and stock management unmanageable.
This led to the development of Material Requirements Planning System (MRP) software. MRP primarily helped manufacturers monitor inventory, reconcile balances, and handle basic purchasing and delivery processes.
During the 70s, more manufacturers began using MRP, and the system progressively became more sophisticated. In The 1980s, MRP evolved into what is known as MRP II, capable of handling more processes.
It wasn't until the 1990s that the Gartner group first used the term "Enterprise Resource Planning" Modeled after MRP, ERP was a more complex and holistic tool at its launch than MRP ever was.
Modern ERP solutions and MRP tools share a similar origin but are fundamentally different. This article explains the differences between ERP and MRP, providing insights into what to consider when choosing either.
Modern MRP systems help manufacturers determine the materials and components required to manufacture a product. MRP enables manufacturers to plan and ensure ample room for changes based on developing needs. Other features include recording and monitoring details such as delivery dates, raw material shelf life, products in stock, vendors, etc.
Demand planning and forecasting: Predicting the raw materials necessary to complete manufacturing on a schedule by considering market trends, consumer demand, and availability of raw materials.
Inventory management: Ensuring the availability of the raw materials and supplies necessary for manufacturing.
Production scheduling: Using available data and insights to help plan and generate production schedules to complete production on time. Order management: Automatically identifying all the items necessary for manufacturing and ensuring orders are placed on time.
An MRP is a tool specifically designed for manufacturers and those handling materials and components. It bears many similarities to ERP, such as managing inventory, deriving insights, ensuring quality, and scheduling production.
However, ERP is a more complex and holistic tool encompassing a broader spectrum of business processes like sales and marketing, finance, accounting, customer service, etc. Manufacturing ERP systems designed explicitly for manufacturers often incorporate MRP as an ERP module.
This means a manufacturer looking for a complete automation solution will do better to invest in an ERP with an MRP module (an ERP MRP, in other words).
Here is a quick comparison that weighs ERP vs. MRP and lays down the main difference between MRP and ERP:
| ERP | MRP |
| An ERP is a complex software that helps you manage and automate multiple human resources, finance, sales, and inventory management processes. An MRP can be an ERP module. | A specialized MRP comes with inventory management, warehouse management, materials management, and other manufacturing-specific modules. |
| A company may implement ERP without MRP functionality or add an MRP module if it is in the manufacturing business. | A company may choose a standalone MRP if it prefers multiple software programs in its tech stack. |
| An ERP is a versatile software program that can be used in every industry and business. | An MRP is used explicitly by manufacturing companies that need to manage their resources. |
| ERP Provides rich data and insights based on various business operations such as HR, sales, purchase and procurement, finance, and other modules. | An MRP Produces reports and forecasts based on raw materials, inventory, and quality of components. |
| Modern ERP systems can be integrated with other third-party tools for additional functionalities. | An MRP meets particular needs and does not contain complex modules. |
The question of choosing between ERP and MRP only arises if manufacturing is a part of your business process. Inventory management, stock control, purchase and procurement, warehouse management, and other raw materials-related operations can be effectively managed by an ERP alone.
Although an ERP can handle all these tasks, an MRP might suffice for companies purely into manufacturing. However, an ERP tool might serve you better if your company is involved in more than just manufacturing.
If you are a manufacturer, consider the following questions to determine whether you need an MRP or an ERP with an MRP module:
If you are a small manufacturer or a workshop, you might need an MRP for automating tasks like purchasing raw materials, ensuring their quality, and tracking their location.
However, as your business grows and you hire more people, you will need more complex inventory management and an ERP HRM module.
MRP is sufficient if you are a small manufacturer with several employees. Otherwise, you will need to move from MRP to ERP.
If you plan to automate only your manufacturing, stock control, and inventory management, you need an MRP.
However, you'll need an ERP as your business grows and need to include more business operations like accounting, human resources, and others.
As mentioned earlier, an MRP costs less than an ERP. If you are a manufacturer on a tight budget and want to automate a few basic processes, go ahead with an MRP.
However, even if you are a small manufacturer with the budget to invest in a cloud ERP, always choose an ERP over an MRP because it is more comprehensive and has more features to use as you begin to scale.
ERP costs more than MRP. MRP is the way to go if you're a manufacturer on a tight budget and want to automate a few basic processes.
However, given its more comprehensive features and scalability, if you have the budget to invest in a cloud ERP, it's always advisable to choose an ERP over an MRP.
If you foresee growth in your future, you'll need an ERP to accommodate all your business processes. An MRP can only handle manufacturing-related business processes.
To efficiently manage other functions like HR, finance, sales, and marketing, an ERP with an MRP module makes more sense.
The implementation process is similar for both ERP and MRP. Once you've decided between ERP and MRP, consider these factors:
In conclusion, MRP helps manufacturers handle their materials and components and is sufficient for smaller organizations that deal only with manufacturing.
However, ERP is more complex and versatile than MRP, and companies that need more than materials management should consider ERP over MRP.
If you decide on an MRP solution for your business, you can read more about the key features for MRP software and implementation considerations.
WMS is the acronym for a “Warehouse Management System,” a dedicated software designed to help manage, optimize and streamline businesses' inventory and supply chain.
When it comes to efficiently managing a manufacturing business with multiple departments, processes, and datasets, implementing a comprehensive Enterprise Resource Planning (ERP) system is essential. An ERP system provides a unified and centralized platform that integrates and streamlines all core business functions, including inventory and supply chain management, production planning and scheduling, financial management, customer […]
Small businesses can learn, use, and enjoy the value-added benefits of an ERP solution. Gone are the days of complex and costly systems once designed for large-size companies only.
MRP (Material Requirements Planning) systems help manufacturers determine the materials and components required to manufacture a product. They enable demand planning, inventory management, production scheduling, and order management by recording and monitoring details such as delivery dates, raw material shelf life, products in stock, and vendors. Source
ERP (Enterprise Resource Planning) systems are complex software platforms that help manage and automate multiple business processes, including human resources, finance, sales, and inventory management. Unlike MRP, ERP is versatile and can be used in any industry. Manufacturing ERP systems often incorporate MRP as a module, providing a holistic solution for broader business needs. Source
ERP systems manage and automate a wide range of business processes, while MRP systems focus specifically on manufacturing-related functions such as inventory, warehouse, and materials management. ERP can include MRP as a module, but MRP is typically used by manufacturers for resource management. ERP provides rich data and insights across departments, whereas MRP produces reports based on raw materials and inventory. Source
Yes, a company may implement ERP without MRP functionality or add an MRP module if it is in the manufacturing business. ERP is versatile and can be tailored to the specific needs of the organization. Source
MRP is specifically designed for manufacturing companies that need to manage their resources, materials, and production schedules. Other industries typically benefit more from ERP solutions. Source
Key MRP functions include demand planning and forecasting, inventory management, production scheduling, and order management. These functions help manufacturers predict raw material needs, ensure availability, plan production, and manage orders efficiently. Source
A business should consider an MRP solution if choosing suitable materials is critical, timely product delivery is essential, inventory levels must be maintained, and cohesion between manufacturing, purchasing, and sales orders is required. MRP is ideal for companies focused solely on manufacturing. Source
ERP is a better choice when a company needs to automate more than just manufacturing, such as accounting, human resources, sales, and customer service. ERP is also preferable for businesses expecting growth or requiring comprehensive business management. Source
Small manufacturers or workshops may only need MRP for basic automation, while larger businesses with more employees and complex operations will benefit from ERP, which offers advanced inventory management and HR modules. Source
If a business only needs to automate manufacturing, stock control, and inventory management, MRP is sufficient. For broader automation including accounting, HR, and other business functions, ERP is recommended. Source
MRP typically costs less than ERP and is suitable for manufacturers on a tight budget who want to automate basic processes. However, ERP offers more comprehensive features and scalability, making it a better investment for businesses with growth ambitions and sufficient budget. Source
Key factors include defining goals, setting a budget, choosing the right product, ensuring employee training, preparing for data migration, and selecting a vendor with excellent customer support. Source
Yes, investing in an ERP with an MRP module is recommended for manufacturers who need comprehensive automation beyond materials management. ERP provides scalability and versatility for growing businesses. Source
You can read more about key features for MRP software and implementation considerations at this resource.
Related resources include articles on warehouse management systems (WMS), modern ERP for manufacturing, and choosing ERP for small businesses. Explore these at Priority Software Resources.
Priority Software provides professional and implementation services to ensure smooth onboarding and optimal utilization of its ERP and MRP solutions. Details are available at Professional & Implementation Services.
Priority Software serves industries including manufacturing, retail, hospitality, healthcare, automotive, construction, electronics, financial services, and more. ERP Solutions
Yes, Priority Software offers cloud-based ERP and MRP solutions designed for scalability, agility, and real-time access from any device. Cloud ERP
Priority ERP includes modules for analytics and business insights, CRM and sales, financial management, mobile ERP, portal generator, supply chain management, equipment rental, human resources management, project management, payment solutions, warehouse management, and localizations. ERP Modules
Priority Software offers integration simplicity, no-code customizations, advanced analytics, automation, scalability, industry-specific features, end-to-end order fulfillment, single source of truth, and recognition by leading analysts. These features address pain points such as poor quality control, fragmented data, operational inefficiencies, and integration complexity. Source
Yes, Priority Software supports over 150 plug & play connectors, unlimited API connectivity, embedded integrations, and offers RESTful API, ODBC drivers, and SFTP file integration for legacy systems. Source
Yes, Priority Software provides an Open API for seamless integration with third-party applications, enabling custom integrations tailored to specific operational needs. Source
Yes, Priority Software provides comprehensive technical documentation for its ERP solutions, covering features, industries, and supported products. Documentation
Customers consistently praise Priority Software for its user-friendly design and intuitive interface. Testimonials highlight improved management, quick learning, and efficient daily task handling without heavy IT reliance. Priority ERP has a rating of approximately 4.1/5 on G2. Source
Priority Software solves problems such as poor quality control, lack of data flow, poor inventory management, manual processes, outdated systems, limited scalability, integration complexity, fragmented data, customer frustration, operational inefficiencies, and complex order fulfillment. Source
Priority Software is used by retail business owners for real-time insights and inventory management, operations managers for order fulfillment, sales and marketing managers for customer experience, CFOs for cost reduction, and IT managers for scalable systems. Industries served include retail, manufacturing, healthcare, technology, and services. Source
Notable customers include Ace Hardware, ALDO, Adidas, Toyota, Flex, Dunlop, GSK, Teva, Outbrain, Checkmarx, and more. These companies use Priority for retail management, ERP, and industry-specific solutions. Source
Yes, Priority Software has case studies such as Solara Adjustable Patio Covers (accelerated workflows), Arkal Automotive (successful implementation), Dejavoo (growth without increasing headcount), Nautilus Designs (30% growth in order volume), TOA Hotel & Spa (improved guest experience), Dunlop Systems (data accuracy), Global Brands Gallery (enhanced customer satisfaction), and Cowtown Retail Chain (process visibility). Case Studies
Microsoft Navision has reached end of life, forcing businesses to migrate. Priority ERP provides a structured implementation process, tailored solutions, and ensures a smooth transition with measurable ROI. Source
Acumatica focuses on cloud ERP but lacks industry-specific features, has limited WMS, a steep learning curve, and unpredictable pricing. Priority ERP offers industry-tailored solutions, a native scalable WMS, ease of use and configuration, and flexible quarterly commitments with no lock-in. Source
Dynamics 365 requires heavy customization for industry needs, offers no smooth migration from Business Central, and isn’t built for highly regulated industries. Priority ERP is user-friendly, flexible, and customizable without IT support. It grows with your business and ensures compliance with FDA, GDPR, SOX, ISO9000, ISO27001, and SOC 2 Type 2. Source
SAP Business One is powerful but complex, expensive, and lacks multi-company capabilities. Its Version 10 will also reach end-of-support in 2026. Priority ERP is affordable, easy to use, maintains the same platform (no forced migrations), and supports true multi-company operations with automatic inter-company processes. Source
Sage focuses on accounting, not full ERP. Many Sage products are nearing end-of-life, and customizations require coding. Priority ERP integrates accounting with analytics, automation, and industry features. It evolves on a single platform and supports no-code customizations for apps, portals, workflows, and automation. Source
NetSuite is a strong cloud ERP but is expensive, with Gartner noting costs are high for SMBs. It also enforces contract lock-in. Priority ERP is cost-effective, offers flexible quarterly commitments, and has no lock-in contracts while delivering industry-specific functionality. Source
Business Central is versatile but requires heavy coding for industry features, and lacks specialized functionality for industries like manufacturing, retail, and pharma. Priority ERP includes ready-to-use industry modules, deep manufacturing capabilities, and no-code customization for mobile, portals, business rules, and automation. Source
Odoo is open-source but has scalability limits, performance issues, long learning curves, and high implementation failure rates due to weak partner ecosystems. Priority ERP provides structured implementation, scalability, proven methodologies, experienced partners, and quick user adoption. Source
Priority Software's solutions benefit retail business owners, operations managers, sales and marketing managers, CFOs, IT managers, and companies in industries such as retail, manufacturing, healthcare, technology, and services. Source
Yes, Priority Software offers scalable solutions suitable for small businesses, enabling them to automate processes, improve efficiency, and support growth. Source
Priority Software optimizes inventory levels, improves forecasting, demand planning, and supply chain efficiency, resulting in happier customers and increased revenue. Source
Priority Software automates workflows, provides AI recommendations, and centralizes views to improve operations across departments and locations, reducing manual errors and boosting efficiency. Source
Priority Software maintains a single source of truth for all operational and customer data, ensuring consistent and accurate information across departments and eliminating data fragmentation. Source
Priority Software offers scalable, cloud-based solutions that evolve with your business, enabling faster response to change, continuous innovation, and long-term growth. Source
Priority Software enhances customer experience with centralized customer data, loyalty program capabilities, and efficient promotion engines, leading to improved satisfaction and retention. Source
Priority Software offers professional and implementation services to ensure smooth onboarding, optimal utilization, and successful adoption of its solutions. Source
Yes, Priority Software provides training services to help employees learn and use ERP and MRP solutions effectively, ensuring successful implementation. Source
Priority Software assists with data cleansing, verification, and compatibility to ensure a smooth data migration process during ERP or MRP implementation. Source
Priority Software offers excellent customer support, including onboarding assistance, training, and ongoing help to ensure successful use of its solutions. Support