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Evolution of ERP System

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Enterprise Resource Planning (ERP) is made to automate any task. With ERP, it is easy to manage every department under one single database. This consumes not much time and is easy and fast way to do work with.

Example :
Any enterprise’s planning, manufacturing, sales and marketing efforts are put under one management system and then it combines to one single database system.

Evolution of ERP System :

1. Material Requirement Planning (MRP) –
Developed in 1970s, Material Requirement Planning is widely used approach for production planning and scheduling in industry. It is the approach embedded in many commercially available software applications.

The function of MRP is to provide material availability i.e, it is used to produce requirement quantities on time. This process involves monitoring of stocks and demand, leading to automatic creation of procurement proposals for purchasing or production. The main objective of MRP is to determine which material is required, quantity required and by when it is required.

2. Manufacturing Resource Planning (MRP II) –
Developed in 1980s, Manufacturing Resource Planning is an expansion of closed loop MRP for managing an entire manufacturing company. This system provides an information that is useful to all functional areas and encourages cross-functional interactions.

It supports sales and marketing by providing and orders promising capability. It is a broad-based resource co-ordination system involving other areas of a firm in planning processes, such as marketing, finance and HR.

3. Enterprise Resource Planning (ERP) –
Developed in 1990s, Enterprise Resource Planning is foundation system for domestic and global operations, supporting most or all functional areas in their daily operations. is one of more common categories of business software, especially with large-scale businesses.

It is a business strategy and a set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processes. ERP at its core is an effective way of centralizing information and workflow processes through data management. Because ERP keeps all of your workflow data in one place.

4. Enterprise Resource Planning(ERP II) –
Developed in 2000s, ERP II is name now use to describe ERP. Basically, it is successor of ERP. It is a business strategy and set of collaborative operational and financial processes internally and beyond enterprise.

These new business models reflect an increased business focus on internal integration. It’s domain is in all sectors and segments. Data in this is internally and externally published and subscribed. It includes departmental modules, CRM, SCM and other stakeholders modules. It emphasis on intangible assists.

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Last Updated : 26 Aug, 2020
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