1. Operations & Logistics Management Lesson 12- Enterprise resource planning (ERP) & Materials requirement planning (MRP)

2. ENTERPRISE RESOURCE PLANNING(ERP) Planning and control decisions must be taken on a continual basis with regards to which activities should be taking place, where, who and how? ERP entails the integration of all significant resources planning systems in an organisation, that in an operations context, integrates planning and control with the other functions of the business. The larger the organisation, the more complex the products and services range produced, the more complex the planning and control requirements.

3. ENTERPRISE RESOURCE PLANNING (ERP) 1970’s: basic planning and control functions were encapsulated in a computer driven application called Materials Requirement Planning (MRP). 21 st Century: MRP II is a computer application that contains all information pertaining to every facet of the operations namely, orders, forecasts, and master production schedules. Through MRP all production planning, control and decisions are automated through a centralised software application. MRP evolved to Enterprise Resource Planning (ERP)- that spans across the entire organisation. Where MRP was contained to information directly related to the operation, ERP links the various support functions, such as marketing, sales, human resources, etc.

4. IMPORTANT The success of MRP and ERP applications are directly dependent to the accuracy and integrity of the information contained in the applications. The systems will only be effective if they are implemented in an organisation, which have already mastered to effective management and control of its operations. If your operation cannot effectively control its production processes before the implementation of MRP/ERP, then chances are that they will not be able to control it after its implementation.

5. QUESTIONS What is ERP? What is MRP?