The origins of ERP systems can be traced back to MRP (Material Requirements Planning) software. The subsequently developed system, known as MRP II, was defined as Manufacturing Resource Planning. Thus, a system that was previously used solely for planning material requirements evolved toward planning production requirements, expanding the scope of the business operations.
Following MRP II, the next developed system was named ERP, which stands for Enterprise Resource Planning. While MRP I and MRP II evaluated factors only within the boundaries of the enterprise, ERP systems were developed by calculating the impact of external factors—such as customers and suppliers—and business processes dependent on external factors, like the procurement process, on the internal structure of the organization. The reason why this system, which is a company’s greatest aid in managing business processes, is called Enterprise Resource Planning (ERP) can be summarized in this way.
Why is ERP software necessary?
ERP is used to evaluate all assets owned by institutions and enterprises in the best possible way and to perform their controls and capacity planning. Furthermore, balancing supply and demand, managing manufacturing business processes, matching capacity and targets optimally, and ensuring that all processes are recorded and monitored according to needs are easily achieved through ERP software.
Previously used only by manufacturing firms and operated with a production-oriented focus, ERP software has now begun to be preferred by companies in the service sector as well. Firms in the service sector can also easily manage their business processes via ERP software.