ERP - Enterprise Resource Planning - is a concept that came about in the late 1960’s along with the development of multiple software applications aimed at helping manufacturing businesses to optimize their production. ERP software first started out as MRP - Material Resource Planning - which emerged in the market by 1975, and would later be replaced by MRP II, a revised version of the initial module.
Despite having opened a world of opportunity with respect to production process planning, MRP had the downside of being functionally restricted to the field of manufacturing, as opposed to its descendent ERP, whose features were useful in virtually any industry.
Compared to its precursor, the reach of ERP software packages extended far beyond the scope of manufacturing, integrating additional functions like finances, human resources, marketing, customer relationship management, supply chain management and logistics. Thanks to its all-embracing character, ERP enabled users to reduce costs in a wide range of areas, and in addition to that, the module was much easier to deploy, operate and maintain.
MRP Software and Its Limitations
MRP software was first introduced in 1970 as a solution for optimizing a series of processes specific to the field of manufacturing. Deployed as a stand-alone module, MRP had very limited functionality, as it was restricted solely to estimating and purchasing raw materials required by the manufacturer.
Stand-alone MRP software was nonetheless appealing to some categories of users, since it helped optimize the supply chain significantly. However, said packages were expensive to implement, not to mention they demanded a high level of expertise and a substantial workforce to run the system efficiently.
The Emergence of ERP & Scheduling Software
ERP software succeeded where both MRP and MRP II modules had previously failed - organizations finally had access to a solution that integrated all the essential business functions into a single unified system. This set the grounds for improved data flow and communication throughout the organization, which further translated to better production performance and higher market profitability.
ERP software would become even more versatile in the 90’s. This is when a new generation of modules entered the market, a line of software packages that could be operated from anywhere in the world, thanks to the use of servers located strategically on the globe. With the help of this new client server technology, users could access a larger amount of data, and geographical boundaries between organizations were starting to fade. By the year 2000, ERP & scheduling software was already leveraging the benefits of the internet, enabling customers throughout the world to place orders, make payments and receive product guidance online.
In 2004, ERP was strengthened by the integration of Service Oriented Design, which further expanded data exchange capabilities between manufacturing software applications operating on different platforms. This helped vendors merge multiple similar applications into a single, cohesive module designed to meet the specific needs of each client. In recent years, modern ERP & scheduling software systems has undergone numerous other changes, with one of the latest implements being ERP SAAS - Software-As-A-Service.
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