Material Requirement Planning and ERP Research Assignment

Material Requirement Planning and ERP
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Material Requirement Planning and ERP
Material requirement planning (MRP) is the production planning, scheduling and the inventory regulatory framework utilized to manage manufacturing procedures in an organization (Ptak, 2013). MRP systems have several roles that include maintaining a low level of material and product, ensuring materials are readily available for manufacture, and also the products are accessible for delivery to consumers (Ptak, 2013). MRP system also plans production activities, purchasing activities as well as delivery schedules. Enterprise Resource Planning (ERP) is a unified management of all business processes like product purchase, production planning, service delivery, sales and marketing, inventory management and also shipping and payment (Brady, Monk, & Wagner, 2011). ERP is defined as a sort of business management system mainly a collection of cohesive applications used by an organization to collect, manage, store and also interpret business activities data. Material requirement planning and ERP are used in the companies by manufacturers since they have realized the importance of these systems to get into broader aspects of an organization. Accordingly, the paper will focus on the significance of adopting both MRP and ERP systems in a company’s operations.
Material requirements planning utilizes bill of material, gathers new orders and also suggests necessary ordering regarding the collected data. MRP is helpful to manufacturing companies that requires several elements to generate their products. MRP system is used by many businesses to organize and track their inventories and ensure that the necessary products are in place whenever an order is placed. When MRP is maintained and appropriately implemented it helps maximize profitability while minimizing cash flow, improve productivity as well as offer companies a chance to take the initiative in the inventory management (Ptak, 2013). Businesses require creat...