Which One Does Your Business Need?
ERP vs MRP vs MES: What’s the Difference
What’s in an Acronym?
ERP, MRP, MES. In manufacturing these acronyms get thrown around like candy, and most of the differences between them are pretty esoteric, ERP being the big exception. Before you start shopping it helps to understand what you’re looking for, and what each of these systems does versus what it doesn’t do.
ERP
Stands for Enterprise Resource Planning, and it’s the system that runs your whole business, not just manufacturing. Odoo, NetSuite, and SAP are all ERPs, though how they’re built and priced looks very different from one to the next. One thing that’s often mistaken for an ERP is Excel. Excel is flexible, but it isn’t software in the sense we mean here, it’s a blank slate that you have to make go yourself, and that’s a very different thing than a system built to run your operations for you.
MES
Is Manufacturing Execution System, and it lives on the shop floor. It’s the piece that walks you through work centers and operations as you actually build the thing, using the bill of materials MRP defined and responding to what the ERP told manufacturing to build in the first place. Like MRP, MES is usually a point solution that hangs off a larger ERP rather than something that stands alone.
MRP
Is Material Resource (or Requirements) Planning, and it answers a narrower question: what do you need to build the thing you’re trying to build. That means bills of materials, component lists, and figuring out expected wastage before you ever start production. MRP is always a piece of an ERP, but it’s only the beginning of the picture. If you’ve landed on this page, odds are you’re not just looking for a way to plan your materials, you’re also selling something, and somewhere in your business a sale has to trigger manufacturing to say I need this, go build it. That connection doesn’t happen without an ERP behind it. There are standalone MRP tools out there, Katana and MRPeasy are two examples, and they can handle the planning piece well enough on their own. The problem shows up when you try to connect them to everything else, your sales orders, your accounting, your inventory. That’s where you end up bolting together a handful of systems instead of running one.
For a small or midsize manufacturer
Buying a standalone MRP or a standalone MES isn’t going to get you where you need to be. What you need is an ERP that ties all of this together, manufacturing, inventory, warehouse, and accounting, into one system. If you’re running QuickBooks and someone tells you to bolt on an MRP, you’re signing up for integration headaches most businesses aren’t prepared for. An ERP like Odoo is built to handle all of this under one roof, so you’re not stitching together separate systems and hoping they stay in sync.
P.S. if you found this useful, there are ten more like it on the free tools page.
Which One Does Your Business Need?
ERP, MRP, and MES all solve different problems, and picking the wrong one usually means paying for a point solution you outgrow in a year. Get a quick breakdown of which system fits where your business is right now, and what to watch for as you grow.
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