Manufacturing Resource Planning and ERP
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Manufacturing Resource Planning and ERP

Technology is rapidly changing the way of life in the world we are living in today. Everyday life aspect today is in one way or another tied to technology and is more particularly evidenced in running of businesses. New inventions and innovations are being released every day in the corporate world. Businesses that have embraced technology are making tremendous waves in their industry compared to those that have not and therefore the earlier a business transition into technology-based platforms the better.

The manufacturing sector has not been left out in this technological revolution and technology use in the manufacturing industry has transitioned in many ways. Manufacturing Resource planning is one major aspect that cannot be ignored in the use of technology in the manufacturing industry. It is basically what has in turn been developed into the Enterprise resource planning. In this article we will discuss manufacturing Resource Planning, the processes involved and how it is tied to Enterprise Resource Planning.

MRP and ERP

Manufacturing Resource Planning is a method that is used to efficiently and effectively plan the company's resources which include raw materials, finances, and human relations. It has helped integrate data and information applications from a central database in business process strategies using hardware and modular software to facilitate decision making for production line managers.

Manufacturing Resources Planning(MRP II) is an improved version of Material requirements planning(MRP I).Their difference is that with Material requirements planning the systems main concern was raw materials aspect whereas Manufacturing Resource Planning was concerned with other aspects of an organisation other than raw materials including finance and human relations. Materials Requirements Planning helped determine the quantity and the timing of raw materials from sales forecasts generated through sales and marketing which was a narrow aspect.This led to the development of the Manufacturing Resource Planning which determined the cost of production, machine time and labor time besides raw materials used.

Manufacturing Resource Planning provided consistent data in the process of manufacturing that was used in finance and accounting. Manufacturing Resource planning provided better control of inventories, a good and more productive relationship with suppliers and improved scheduling. It also helped in engineering to improve design control and provide quality control.In finance and costing, it helped in reduction of the working capital for inventory, improved cash flow through faster deliveries and more accurate inventory records.

MRP I and II were however not real time as during that time there were no hardware and software that would provide speed and enough capacity to run such a system and this led to the transition to Enterprise Resource Planning. Enterprise Resource Planning is the new model of manufacturing Resource Planning.Todays ERPs cannot be talked in isolation without mentioning how the MRP has led to its existence.

Material Resource Planning

Enterprise Resource planning is a more integrated use of technology in the management of business processes and most importantly it is done in real time as compared to its predecessor which was not real time. Enterprise Resource planning integrates data and information in various business activities in product and production planning, manufacturing and service delivery, marketing and sales, materials and inventory management, shipping and payment and finance operations.

The application provides an integrated view of the core business activities from a centralised database and shares data across various departments, facilitates a flow of information between all business functions and also manages connections to the public and the outside stakeholders. ERP is therefore characterised by a well-integrated system, operates in or near real time, can support all the applications, it has a similar and consistent look and feel across the modules and the system installation with elaborated applications, data integration by an information technology department as long the implementation is done in big steps.

Enterprise Resource planning covers all business functional areas including manufacturing, management accounting, financial accounting, order processing, human resources, supply chain management, project management, customer relationship management and data services. ERP enhances organisational efficiency by offering error-free transactions and productions.Enterprise resource planning has also revolutionalised and It has been improved with time where ERP I, as it was called, was phased out because it was only useful for the back office operations and locked out customers and the public.The front-office functions were left to be run by a different system, for example, customers were dealt with by a customer relationship management (CRM) and suppliers by a Supplier relationship management.

ERP II expands ERP I and it helps the organisation to collaborate with other enterprises. ERP II is more flexible and its integration was beyond the corporate only and included an interaction with other systems. ERP has also been developed for the public sector and the government bodies which is called a GRP (Government Resource Planning). ERP system is configured by System integrator.

ERPs has brought massive changes in business processes and the staff work processes and practices in an organisation. For better implementation, organisations have sourced for the best services in consulting, customisation and support. The process depends on the company size, number of modules, customisation, the scope of the process changes and even the readiness of the customer to embrace the project. ERP implementation may be delayed by poor or lack of understanding of the needed changes before implementation. Lack of a good infrastructure, training, and motivation can escalate the problem thus leading to project failure.

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ERP system will in the near future be integrated with mobile devices to make it more efficient and effective. ERP is, however, likely to be phased out by a more advanced programming modules that may be developed in the future. Organisations employees readiness to accept change has a major impact on the integration of the systems in the business processes and the earlier they embrace it and learn it, the better.

Employees also need to be motivated, given the right training and be provided with a good infrastructure and working conditions for them to be able to adapt faster to change. The manufacturing sector will thus continue to evolve as new systems are developed and released to the market. This will improve business processes efficiency and subsequently lead to a rise in production and sales.
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