Supply chain management (SCM) deals with the interchange of data between the supplier and the manufacturer. Customer relationship management (CRM) deals with the interchange of data between the manufacturer and the customer. ERP systems provide the “shared data” which is needed to support these exchanges of data.
2. Many people argue that MRP is a precursor to ERP, and that ERP systems were designed to integrate MRP systems with financial and accounting systems.
a. Given the interrelationship between MRP and ERP, does it make sense for a non-manufacturing company to adopt an ERP system?
A non-manufacturing company can benefit from the integration of ERP modules supporting Sales and Marketing, Financial Accounting, Management Accounting, Materials Management, and Human Resources. Companies can identify ERP modules that support their business functions and achieve significant benefits through process standardization, data integration, management reporting, and operational productivity. In addition, ERP becomes a foundation for advanced applications, including CRM, eBusiness, and business intelligence.
b. Have manufacturing systems been the basis for all ERP systems?
The original MRP systems were precursors to ERP. ERP systems were instrumental in integrating manufacturing processes with other business processes. ERP systems manage continuous improvement of processes across the supply chain so that customers’ needs for information about products and services are met.
However, ERP systems can effectively support any part of the supply chain by introducing “best practices” which improve operational effectiveness. Many of today’s ERP systems specialize in non-manufacturing applications, such as Human Resources and Financial Management. The broadened definition of ERP provides organizations with an...