ERP vs. MRP: Understanding the Difference Between Business Management Systems

When investing in a business management software, it’s important to look for a solution with features that will help you streamline processes, cut costs, save time, improve profit margins, and improve the ability to serve your customers. As you vet different software options, it can be challenging to understand and differentiate between acronyms like MRP and ERP. Even for distributors who currently utilize an ERP, you may think you need to make an additional investment in MRP. Below, we provided some clarity to help industrial distributors understand the difference between MRP and ERP, and why ERP is the better choice and only software you need to manage and grow your business.

Business Management Software Terminology

When it comes to MRP and ERP, many definitions of these two types of software can sound very similar. Not to mention, they are only one letter off from each other and are both commonly used within industrial distribution. Let’s start with some basic definitions:

What is MRP?

MRP stands for material requirements planning. At its core, MRP software allows you to measure the raw material you need, how much is needed, and when it’s needed by. People typically use MRP for its master scheduling to forecast and order materials and ensure that when those raw materials are needed, the right amount is available.

What is ERP?

ERP stands for enterprise resource planning. ERP software is very similar to MRP, as it has the same capabilities that enable industrial distributors to manage processes like production planning, scheduling, and inventory management. The key difference, however, is applicability.

Benefits of Using ERP vs. MRP

Many of today’s industrial distributors provide value-add services, such as estimating and service and repair of parts, to stand out from the competition. As a greater focus is placed on these value-add services, your business requirements expand far beyond what MRP can offer.

Tribute’s TrulinX ERP software comes equipped with tools and features, such as estimating, multi-level BOM’s, configurator, WIP, labor capacity report, employee time card entry, burden application, disposition management, service/repair and field service capabilities to name a few, that are specifically designed to meet the needs of industrial distributors who provide value-add services. For example, with an ERP, distributors can convert a quote into an order with just a click of a button. Additionally, our service and repair management feature allow you to keep track of estimated and actual costs and route certain jobs to different locations and/or outside vendors.

These industry-specific features are beneficial to industrial distributors by streamlining processes, so you can move parts and pieces faster. Ultimately then, distributors can increase the profitability of value-add services with Tribute’s ERP software.

Tribute, Inc. is a provider of ERP business management software for industrial distributors who provide value-add services. For information on our ERP software, contact us or visit Tribute.com.