Content Word Count: 1558
This research paper aims to discuss the evolution of ERP systems, the major stages in the
evolution process, as well as the structure and features of an ERP system. It will also briefly
look at the major vendors in the ERP market and how technology has changed the way
companies implement their ERP systems.
2. Legacy Systems
Legacy systems are generally thought of as older, highly modified computer systems
or applications developed or purchased long ago. Many companies still use these
non-ERP systems simply because they work and have been customized to suit their
business needs. In the next section, we will look at the legacy systems such as MRP,
Closed-loop MRP and MRP II.
3. Evolution of ERP systems
The evolution of ERP systems consist of 4 main steps, from legacy systems to
current modularized ERP systems (Wallace & Kremzar 2001 ).
3.1 Step One – Material Requirements Planning Systems
(MRP, or MRP I)
Materials Requirements Planning Systems was launched in the 1970s. “It is a
computer-based inventory ordering and time-phased scheduling technique, which
uses bill of material, inventory data and the master production schedule to calculate
requirements for material and determine when to release the material replenishment
order.” (Torkzadeh and Sharma, 1991, p78)
Disadvantages of MRP systems
MRP is also sometimes referred to as a Push system. There are several disadvantages
of MRP systems, such as;
1. They are often slow and unable to react to changes in the market place.
2. Products may become obsolete as consumer preferences and demand changes
for a certain product.
3. Higher costs and inefficient handling of inventory.
4. Does not take account manpower, machine or supplier capacity constraints.
3.2 Step Two – Closed-loop MRP systems
Closed-loop MRP System is often considered “a second-generation system which... [continues]
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