Do I need an ERP or an MRP system for a small manufacturer?

MRP (material requirements planning) works out what you need to make, what material that takes, and when to buy or make it, by netting your orders against stock and open purchase orders through every level of the bill of materials. Modern MRP software usually adds production scheduling, works orders and stock control.

ERP (enterprise resource planning) covers the whole business in one system: everything MRP does, plus the nominal ledger, purchase and sales ledgers, often payroll, HR and multi company reporting.

For a manufacturer with 10 to 250 staff, the problems that cost money are usually in the first list, not the second: late deliveries, jobs nobody can find, quotes that do not reflect what work really costs, and certificates chased at the last minute.

For a job shop or engineering firm that makes to order, the essentials are:

• quotes priced from routings and machine rates, so the price reflects the work
• a delivery date check against the real load on the machines before you promise a date
• MRP and purchasing so material and subcontract work arrive in time
• a planning board that copes with rush jobs and breakdowns
• shop floor tracking on tablets, so you always know where a job is
• traceability of heat and batch numbers from goods in to the customer, for certificates of conformity
• quality and maintenance records your customers and auditors expect

Our live manufacturing software demo at manufacturing-demo.varsuite.co.uk covers this for a sample engineering company, and is designed to sit alongside your accounting software rather than replace it.

An ERP is worth the extra cost and setup when you need one system of record across several legal entities, sites or currencies, when group reporting depends on it, or when finance, HR and manufacturing genuinely have to share every transaction in real time. Larger manufacturers and groups often reach that point.

If that is not you yet, buying an ERP for its manufacturing module tends to mean paying for and configuring a great deal you will not use, and still bending the factory to fit.

Packaged MRP software suits factories whose processes match the package. Tailored manufacturing software makes more sense when your routings, paperwork, quality records or customers are not standard, or when you are moving off a system such as Sage 200 Manufacturing and want the replacement to fit properly this time.

We start from a working factory portal rather than a blank page, then fine tune it to your machines, routings, documents and integrations, so you get the fit of bespoke software without starting from nothing.