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Is Manufacturing ERP Worth Less Without MRP?

Manufacturing ERP software selection is a typical process for small and medium enterprises.

Also implementing Manufacturing ERP Solutions is not a choice for just any enterprise.

Every Micro, Small & medium enterprise functions in its own critical way.

This can be either because of manpower, material supply or budgeting issues.

However setting up a proper manual and computerized system can drastically improve the foundation for manufacutinrg and supply.

And increase efficiency for small business owners to structure their enterprise and improve profitability.

This is possible by being agile and implementing a solution which is strong enough for an enterprise at the grass root level.

If the fundamental root foundation is weak in functioning, ERP solutions can be of no use to an enterprise.

To make root stronger MRP is beneficial for all small scale manufacturing industries.

MRP provides the foundation upon which your production, planning, scheduling, forecasting and timely delivery is maintained.

If you fall under Micro, small & Medium enterprises you don’t need an ERP.

ERP comes secondary for any micro, small & medium enterprises.

Because most of the micro and small enterprise operate their daily activity on mess on the shop floor.

And to improve it, you really need an MRP solution which can run even individually for your workshop as well as business.

But the pain point is MPR solutions are complex, costly and very few vendors provide MRP solutions.

Do not mislead by so called bogus small business Manufacturing ERP software.

Instead, setting up an MRP Software is crucial for your enterprise and a must have solution for every small and medium enterprise.

And strengthening the manufacturing resource planning of an enterprise is ideally the initial stage for any small business to fix core manufacturing issues.

Fundamentals of Manufacturing ERP Software

Every small business and manufacturers are actively trying to find ways to improve their core manufacturing issues and shop floor activities.

Also they are trying to find a software solution which can be cost effective to manage manufacturing chaos.

But only a very few software vendors in India provides MRP Solutions integrated with an ERP.

And most of the so called ERP in the market are not at all an ERP solution.

When we talk about manufacturing solutions, it is directly linked to production, planning and process control system that a small business finds themselves difficult to figure out on daily routine.

So you have to be aware, which solutions to consider when looking for a manufacturing solution either ERP or MRP or both.

But there is also a question of being comfortable with pricing and buying power, small business often lacks the budget and investment required.

So often small business end up buying low cost ERP software and most of these ERP do not cater to the needs of enterprises.

And later on enterprises realize that there was a huge wastage of time and money.

Because 90% of ERP implementation fails in such cases trying to implement and resolve core issues

To overcome this situation, as a manufacturer you need to do active research process in your buying journey.

And understand whether there is a need for ERP or an MRP or both depending on what exactly can solve your issues.

Manufacturing ERP Versus MRP, What’s your need to uplift your enterprise potential?

MRP can be one of 2 types, MRP 1 and MRP 2

MRP 1 is restricted to managing material inventory levels in order to meet production and customer demand, so it is a fairly a narrow scope.

In contrast MRP2 take a larger perspective in order to plan the operational and financial aspects of the entire manufacturing operations.

And plan entire business resources, required to meet changing demand forecasts and make adjustments to production and other resources.

Another way to look at this is when you consider MRP 1, it is focused on ensuring that materials are available to manufacture a specific part in a specific volume.

And MRP 2 helps manage other aspects including ordering, tracking inventory and ensuring capacity is capable to meet changing demands.

Both MRP 1 and MPR 2 only focus on meeting customer demand.

They do not allow an integral coordination of all critical functions of the enterprise like product development, CRM, sales, marketing, HR, manufacturing and finance.

However ERP provides this high level integrated information system and capability that serves all critical functions of an enterprise.

ERP is a business process management software approach.

It allow an organisation to use a suite of application to manage the entire business and automate its office function.

But you have to understand if it provides what you have been looking for on the ground?

The Rise of Manufacturing Execution Systems

In contrast to the strategic level roles of ERP and MRP, MES comes into play

MES is often seen as a set of sensors or detectors that collect data automatically and send it somewhere.

This is however an oversimplification.

MES is much broader as it moves the information between manufacturing planning and execution in both directions.

While sensors only collect the data.

Also, technical tools do not represent or analyze the collected information.

Of course, sensors can be integrated into MES, but they are not the core part.

Information can be collected in many ways that complement and verify each other.

So we can define MES as a computerized control system used in manufacturing for directly managing and monitoring work in progress on a factory floor

MES software tracks all information in real time receiving update data from all sensors.

This help decision makers, to understand the current operating conditions on the factory floor in order to improve the production line.

Initially this can become cumbersome for small and medium enterprises.

But this phase needs core modification with an easy perspective for small enterprises and every enterprise should dream of achieving it.

MES is primarily used to improve productivity and reduce the total operation necessary to manufacture product.

MES systems can capture many of the types of data generated in the production process.

Like production cycle time, product quality data, equipment downtime, inventory levels, planning production breaks and material movement time.

And all these attributes gives evidence based data to make smarter decision for manufactures.

Some of the top vendors among MES systems providers are:

Rockwell Systems

ABB Automation


Schneider Electric


to name a few.

And these companies provides robotics control systems for enterprises to manage process automation.

But it is beyond the scope of discussion in this article, so let us focus on what exactly a small business can focus with an MRP solution.

What should you accomplish with an MRP Software, if you fall under SME?

Of course MRP is a complex system, so as a small enterprise you cannot cover every critical aspects.

And it depends on constraints such as the time, budget, resources and manpower.

On the contrary large enterprises needs more focus on MRP systems with CIM, MES and ERP functioning together.

But for smaller enterprises yes MRP Software can at least improve your overall manufacturing efficiency, planning, forecasting and meet customer demand.

And if you can accomplish only a part of it, it is a sign of effective resource planning for your business.

As you settle your base and establish a strong foundation for your manufacturing plant.

You can focus later on the larger aspects of enterprise resource planning.

Task you can dare to accomplish with MRP software

MRP systems are independently a resource planning software that focuses on manufacturers.

So it usually has a special environment for workers on the shop floor.

And a cloud based MRP solution provide real time data to be updated via a tablet device.

So reported information is immediately available to management about production progress

KPI such as equipment efficiency and machine response along with labor production report, labor wages calculation and cost of production are easily available to entrepreneurs.

Also it includes production planning, introducing process-capacity scheduling to get the most out of each machine.

And it adds an analysis report to acquire a better grasp of processes and demand forecasting.

So having all these actual information allows for increased efficiency, decreased reaction speed, improved processes.

And meet the demand and supply of customer’s to satisfaction.

Attributes for Small Business Manufacturing that defines an MRP

Product Master with Lead Time (Procure/Make)

Bill Of Material (Single & Multi Level)

Machine Master with Capacity Plan

Labor Master 

Work Center Master (Process Wise Hourly/Piece Rate Calculation)

Routing Master

Master Contract

Work Order Scheduling

Gantt Chart Visual & Dynamic Re-Scheduling

Master Production Schedule

Quality Control

Standard Costing

Delivery Planning

Demand Forecasting & Planning


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