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Category Compare: ERP Software vs. MRP Software

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By Barkha Bali

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Both enterprise resource planning (ERP) and material requirements planning (MRP) software enable businesses to manage and optimize resources within a company, as well as increase operational efficiency and collaboration. However, the two categories serve distinct purposes and offer unique features.

An MRP system is primarily employed by companies that need to optimize their inventory, plan production, and streamline supply chain processes. On the other hand, an ERP system integrates various departments and functions within an organization, such as finance, human resources, sales, procurement, and customer relationship management. ERP tools provide a unified and real-time view of business operations, facilitate data sharing across departments, and automate processes. So, which one should you choose for your business?

This article discusses the similarities and differences between ERP software and MRP software so you can select the right one for your business needs. For each software category, we’ve also included the top five products based on verified software reviews. Read more.

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What is ERP software?

Enterprise resource planning (ERP) software is a suite of applications designed to assist businesses in managing and integrating their core operations across departments and functions. For example, financial and accounting teams use an ERP tool to optimize financial processes, including accounts payable and receivable, financial reporting, and tax management. HR teams use it to manage employee data, payroll, benefits administration, and performance management. Similarly, ERP solutions help improve supply chain efficiency, customer relationships, inventory management, and other business processes.

Think of it as the central nervous system of a business that coordinates and harmonizes different functions, enhancing inter-departmental communication and data flow. It also provides visibility into operations, leading to increased productivity and better decision-making.

Core features of ERP software

Given below are the core feature of enterprise resource planning (ERP) software:

Integrated business operations:

Enables coordination and interconnection between different functional areas and processes from a unified system. It improves data sharing and real-time visibility across departments, eliminating data silos, and providing a holistic view of the organization's operations.

Financial management:

Records, processes, and organizes financial transactions within functional modules such as general ledger, accounts payable, accounts receivable, and fixed asset tracking.

What is MRP software?

Material requirements planning (MRP) software helps businesses calculate the materials or components required to manufacture a product, improving manufacturing processes and inventory. MRP software focuses on optimizing the procurement and usage of materials needed for production, ensuring that the right materials are available at the right time in the right quantities.

Basically, MRP solutions help understand what materials you need to manufacture your product. MRPs also help maintain an optimal balance between inventory levels and production requirements. They accomplish this by using various data inputs, such as bills of materials, inventory levels, lead times, and production schedules, to generate accurate and detailed material requirement plans.

Core features of MRP software

The core features of customer experience software are:

Inventory management:

Tracks inventory levels of raw materials, components, and finished goods. It helps in identifying shortages and excess inventory and maintaining optimal stock levels to avoid stockouts or overstocking.

Order management:

Generates purchase orders for materials based on the requirements plan. It assists in managing the procurement process, including supplier selection, order placement, and tracking deliveries.

Reporting/analytics:

Provides analytical capabilities to analyze material requirements, inventory levels, and production performance. It generates reports and insights to facilitate decision-making and continuous improvement.

Production scheduling:

Considers production capacity, lead times, and material availability to create optimized production schedules. It helps in sequencing production activities and ensuring efficient utilization of resources.

What are the differences between ERP and MRP software?

  • Business focus: Organizations with complex production and distribution processes use MRP solutions to improve the scheduling of raw materials before production and optimize inventory to remove delivery delays. These tools are primarily used in manufacturing companies. ERP solutions, on the other hand, have a broader application and are used in various sectors, including services, retail, education, healthcare, nonprofits, and more.

  • Integrations: MRP software typically integrates with tools that are related to manufacturing and control, including inventory management, production planning, procurement, and finance solutions. In contrast, ERP software integrates with various software solutions that cover different business functions, including accounting, finance, human resources, inventory management, manufacturing, sales, marketing, and more.

  • Pricing: The pricing range for ERP software is typically between $8 to $99 per user, per month. Contrarily, the pricing range for MRP software generally falls between $15 to $99 per user, per month. The variation in pricing depends on factors such as the vendor, number of users, business size, specific modules included, and level of customization required.

What are the similarities between ERP and MRP software?

ERP software can help virtually any type of business, while MRP software is unique to those in the manufacturing sector. Despite this distinction, the two software types do have some common functionality, including:

  • Data collection/analytics: Both ERP and MRP software handle data management within an organization. This process includes collecting, storing, and organizing data related to various business operations such as inventory, production, finances, sales, and customer information. This centralized data management facilitates better decision-making, reporting, and analysis.

  • Planning and optimization: Both software types offer planning capabilities to optimize resources and processes. MRP software specifically focuses on material planning, ensuring that the right materials are available for production. ERP software extends this planning aspect to cover other functional areas such as finance, HR, and customer management, facilitating comprehensive resource planning and optimization. Therefore, MRP is a subset of ERP.

  • Inventory management: Both ERP and MRP software provide functionalities for inventory management. They help businesses track, monitor, and control inventory levels, ensuring that materials or products are available when needed. This includes managing stock levels, tracking inventory movements, conducting inventory audits, and optimizing reorder points.

  • Reporting and analytics: Both software types provide reporting and analytics capabilities. They generate insights, key performance indicators (KPIs), and reports that help organizations monitor performance, make informed decisions, and identify areas for improvement.

Other common features of ERP and MRP software include production scheduling, warehouse management, and supply chain management.

ERP vs. MRP software: Which one is right for your business?

Choosing between ERP and MRP software solutions depends on the specific needs and priorities of your business. 

  • MRP software tools are suitable for manufacturing companies focused on material planning, inventory management, and production scheduling.

  • ERP software can be employed in any sector, including manufacturing, finance, HR, supply chain, customer management, and more. It integrates multiple business functions and provides a centralized platform for managing diverse processes within an organization.

Consider factors such as business complexity, scalability, budget, integration requirements, and customization needs to make an informed decision that aligns with your organization's unique requirements and long-term growth strategy.

Once you’ve decided which software to use, head to our ERP and MRP software category pages where you can find a sortable list of products and software reviews from verified users.

If you want to narrow down your search to only the most popular and highest-rated solutions, visit Capterra Shortlist reports for the top ERP software and MRP software tools—our reports are based on an analysis of thousands of user reviews.

How to choose between ERP and MRP software

Below are a few important things you can consider when selecting between ERP and MRP solutions. 

  • Determine your departmental requirements: As discussed above, MRP solutions are used to optimize manufacturing processes, including material planning and other production-focused functions. If you need a broader range of integrated functionalities that cover multiple areas of your organization, ERP software should be your pick.

  • Evaluate customizations: MRP software often provides flexibility in configuring material planning parameters, such as reorder points and lead times, to match your specific requirements. ERP software, on the other hand, may offer extensive customization options across various modules, allowing you to tailor workflows, data fields, and processes to align with your unique business needs.

  • Assess reporting/analytical capabilities: Both ERP and MRP software provide reporting tools, but MRP software typically offers standard reports and analytics focused on material planning and inventory management. On the other hand, ERP software often provides advanced reporting tools with more extensive customization options, enabling you to generate comprehensive reports across various functional areas of your organization.

5 top-rated ERP software

These products are listed in alphabetical order. (Check how we selected them.)

Analysis accurate as of June 2023

5 top-rated MRP software

These products are listed in alphabetical order. (Check how we selected them.)

Analysis accurate as of June 2023


Methodology

For both software categories, we highlight the top five products with the highest average user ratings. To be included in this list, the products had to:

  • Have at least 20 unique product reviews published on Capterra, with an average rating of 3.0 or higher (as of June 14, 2023).

  • Meet our software market definition for ERP and MRP software:

    • ERP software: “Enterprise resource planning (ERP) software helps organizations track information across all departments and business functions, from accounting to human resources to sales and beyond, and leverages a shared database to provide a single ‘source of truth’ across modules.”

    • MRP software: “Material requirements planning software helps manufacturers process orders and manage the flow of materials, parts, and components according to production schedules and bills of material.”

Products evaluated for the pricing calculation were taken from Capterra’s enterprise resource planning and material requirements planning software directories. The pricing ranges exclude freemium versions of the products. The features highlighted were identified based on their relevance and the percentage of products in the Capterra directory that offer them. Only products with publicly available pricing information, as of June 14, 2023, were considered for pricing calculation.

Note: Reviews and ratings data in the product cards is as of June 14, 2023. New reviews may have been added since the publication of this article, so the reviews data in this piece may not reflect current conditions.


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About the Author

Barkha Bali profile picture

Barkha Bali is a writer at Capterra, providing expert insights to help small businesses identify the right software for their needs by analyzing user reviews data for the highest rated products in relevant software categories. She has worked in finance, lifestyle, education, and medical. With expertise in marketing and content strategy, Barkha’s work has been featured in Medium and educational websites. When not working, she can be found re-watching “The Office” or “Brooklyn Nine-Nine.”

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