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Enterprise Resource Planning had its beginnings in the late 1970’s and 1980’s as Material Requirements Planning (little MRP). The planning engine that first allowed us to use netting logic to translate gross requirements into net requirements for assemblies, subassemblies, components and raw material for manufactured or purchased parts. Material Requirements Planning was born before computers were feasible to run it. Little MRP has the capability to plan and re-plan very efficiently while considering bills of material quantities, scrap and yield factors, various lead times, various lot sizes, minimum and maximum quantities, safety stocks and safety lead times.
Little MRP evolved into Manufacturing Resource Planning in the 1980’s. Known as MRP II, it included Master Scheduling, Forecasting, Customer Service, Order Entry, Capacity Requirements Planning, Procurement, Production Control, Inventory Management, Standard Costing and Accounting. MRP II was said to close the loop in the business process. That is, it could react and re-plan as it received feedback about how the business was performing against plan. At this point in the progression on business systems, we thought we had most business functions in MRP II.
From MRP II came ERP; that is Enterprise Resource Planning, in the 1990’s. ERP included functionality for Quality Management & Just in Time and Manufacturing/Lean Support to help us to re-tool and better compete as the U.S. began to see competition from around the world. ERP includes Financial Planning and Budgeting and Executive Support Systems (ESS) to allow us to make better big picture management decisions. Then came Electronic Data Interchange (EDI) and more Sales Support Systems and Sales and Operations Planning (S&OP) to help us better communicate and manage our customers and orders. Manufacturing Execution Systems (MES), Logistics, Plant and Equipment Maintenance, and Advanced Planning Systems (APS) gave us more tools to keep our plants running and delivering more effectively. Now we really had everything a business could need in a business system……….all in ERP!
I am sad to say that we have no new “TLA”, Three Letter Acronym, that today’s systems are known by! We simply have ERP with enhancements and advancements; we probably should call it “ERP II”. CPFR (Collaborative Planning, Forecasting and Replenishment) to help us better coordinate with our customers on forecasts. We have Supplier Relationship Management (SRM) to help enhance the analysis of suppliers, corporate spend and better management of suppliers and contacts. In this author’s opinion, Customer Relationship Management (CRM) has been one of the more valuable tools in recent years created to enhance our business systems. CRM helps us to manage customer contacts, orders preferences, forecasts, market segments, customer subscriptions, frequent flyer and club memberships and programs. Certainly we have internet and mobile enhancements to our ERP systems that seem to be coming almost every day. As you read this article, more and more “Green” functionality is being developed to help us manage our environment and help us with sustainability.
I guess today we really do have everything we need in our business systems …….
That is until tomorrow!
Cite this blog post:
MLA: “ERP, Where Did It Begin and Where Is It Going?” MSS. MSS. Blog. 08 April 2015.
APA: (2012, May 2). ERP, Where Did It Begin and Where Is It Going?