{"id":1374,"date":"2020-01-10T14:16:02","date_gmt":"2020-01-10T06:16:02","guid":{"rendered":"https:\/\/www.sage.com\/en-sg\/blog\/?p=1374"},"modified":"2025-10-17T19:07:55","modified_gmt":"2025-10-17T11:07:55","slug":"outgrowing-your-mrp-system","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-sg\/blog\/outgrowing-your-mrp-system\/","title":{"rendered":"Are you outgrowing your MRP system? How ERP is changing the game"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-sg\/blog\/category\/strategy-legal-operations\/\" class=\"entry-header__link\">Strategy, Legal &amp; Operations<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tAre you outgrowing your MRP system? How ERP is changing the game\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2020-01-10T14:16:02+08:00\">10 January, 2020<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Are you outgrowing your MRP system? How ERP is changing the game\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-sg\/blog\/outgrowing-your-mrp-system\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-sg\/blog\/author\/asavinwattanajantra\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2026\/03\/Asavin-350x350.jpg\" class=\"entry-author__image\" alt=\"Asavin\" srcset=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2026\/03\/Asavin-350x350.jpg 350w, https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2026\/03\/Asavin-768x768.jpg 768w, https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2026\/03\/Asavin-810x810.jpg 810w, https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2026\/03\/Asavin.jpg 1000w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Asavin Wattanajantra<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>The evolution of business management solutions for manufacturing companies has spawned a massive number of product offerings in the market. As solutions become more technologically advanced and robust, it can be difficult to sift through features that are required to support growth and those that are cosmetic.<\/p>\n\n\n\n<p>To get the most out of any solution, it\u2019s important to understand the types of systems that are available and how they differ.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-an-mrp-system\"><strong>What is an MRP system?<\/strong><\/h2>\n\n\n\n<p>Manufacturing resource planning (MRP), as we know it today, is a derivative of material requirements planning developed in the 1970s as a mechanism for manufacturing companies to calculate which materials they required, at what time, and at what quantity, with precision.<\/p>\n\n\n\n<p>Material requirements planning then evolved into manufacturing resource planning\u2014or MRP II\u2014because manufacturers needed a system that could support other business areas, like managing supplier payments, payroll, and human resources. MRP systems are often standalone applications that operate in a modular organisational structure. Each module keeps track of and regulates specific characteristics and functions for the company, like product design, quality control, shop floor control, and general accounting. MRP II introduced the closed-loop model, which uses a centrally held data file to record, monitor, and report on various company activities.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Free ebook: Streamline your business operational process<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Discover how 3 technology trends can help you overcome today\u2019s top 4 industry challenges.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-b491e39e-dc29-4c47-8894-cfa5fa7ff40b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download eBook<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"640\" height=\"487\" src=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2019\/06\/GettyImages-510162486-e1574383366580.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2019\/06\/GettyImages-510162486-e1574383366580.jpg 640w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-an-erp-system\"><strong>What is an ERP system?<\/strong><\/h2>\n\n\n\n<p>Enterprise resource planning (ERP) solutions combine the modules monitored in an MRP system and integrates them to support all business functions, not just those relative to manufacturing. As manufacturing businesses grow to a certain size, globalization becomes a factor. Interacting with the world offers lucrative opportunities and creates a higher demand for products and sources of cheaper raw materials that often impact the entire supply chain.<\/p>\n\n\n\n<p>But globalization also means complex challenges. A crowded global market means more competition and a rapidly accelerating rate of change. Challenges could include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pressure to innovate, where keeping costs to a minimum and reducing the time to market is a competitive necessity.<\/li>\n\n\n\n<li>Sudden changes to trade agreements due to macro-economic or geopolitical change; for example, tariff changes, commodity availability or currency valuations.<\/li>\n\n\n\n<li>Environmental regulations which are necessary to address serious problems such as pollution and climate change.<\/li>\n\n\n\n<li>International standards controlling quality and traceability, which impacts the sourcing of raw materials.<\/li>\n<\/ul>\n\n\n\n<p>Additionally, manufacturers often need to build highly engineered and complex products, which means:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They are often created in collaboration with customers, therefore it\u2019s important to communicate both internally and externally.<\/li>\n\n\n\n<li>It\u2019s important to maintain tight control over how products are produced.<\/li>\n\n\n\n<li>There is increased pressure to produce quality products at lower cost.<\/li>\n<\/ul>\n\n\n\n<p>Manufacturing businesses look at ERP systems to support quality product delivery at low cost, addressing many of the issues we\u2019ve talked about. For example, it should support internal collaboration, so product requirements are clearly defined and communicated, with production coordinated with the delivery and product teams. Without communication, it\u2019s impossible to make sure products are delivered to specification, on time, and without excessive costs. Externally, communication is essential for working with suppliers to secure favorable prices, and communicating with regulatory bodies and customers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-common-drivers-for-choosing-an-erp-system\"><strong>Common drivers for choosing an ERP system<\/strong><\/h2>\n\n\n\n<p>On top of the globalization challenges mentioned earlier, manufacturers need products built quickly, cheaply, and efficiently, or they won\u2019t make profit. Research by Aberdeen Group shows profitability\/margin growth is (and always has been) the top business priority for 79% of US manufacturers. There\u2019s now a new push to modernize business systems (29%), increase customer service (28%) and introduce new products and services (25%) that has business leaders turning to the technological advancements within modern ERP systems.<\/p>\n\n\n\n<p>ERP is also built to support new strategies many manufacturers share as shown by Aberdeen Group\u2019s research, like streamlining and accelerating processes to improve efficiency and productivity (44%), optimizing the supply chain (31%), and improving interoperability and collaboration (31%).<\/p>\n\n\n\n<p>Because manufacturing companies are rich with data, ERP has become the&nbsp;platform for change&nbsp;and a catalyst for the possibilities of the future. Business leaders are better-positioned to get the most out of their data, like analyzing the effectiveness of processes, determining profit trends, or monitoring customer data\u2014all by integrating business analytics with their ERP. Although integration of ERP with&nbsp;internet of things&nbsp;(IoT) capabilities is still in the early stages, 38% of manufacturers plan to implement IoT in the next year, and 72% plan to within the next 3 years. Eighty-three percent of the respondents have some form of an ERP solution in place already.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-benefits-of-erp-over-an-mrp-system-or-older\"><strong>Benefits of ERP over an MRP system (or older)<\/strong><\/h2>\n\n\n\n<p>ERP adopters are 44% more likely to have visibility into the status of all processes, and 75% more likely to have automated notifications for business events. With enhanced visibility, agility, and efficiency, manufacturers that have implemented an ERP system see a 333% increase in productivity, an 800% increase in profitability, a 6% increase in on-time delivery, and a 4% increase in accuracy on average than those using legacy systems.<\/p>\n\n\n\n<p>Even further, manufacturers using a cloud-connected ERP system are better positioned to quickly adopt new IoT technologies as they become available. IoT has the capability to drastically change the manufacturing landscape by extending control of equipment and machinery. MRP systems present a primary obstacle to IoT development, which is its inability to integrate the various systems, devices, and components that span an enterprise.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-good-foundation-is-the-best-preparation\"><strong>A good foundation is the best preparation<\/strong><\/h2>\n\n\n\n<p>The state of manufacturing is increasingly moving towards business models that leverage new processes to increase visibility, agility, collaboration, and efficiency. The steady march of <a href=\"https:\/\/www.sage.com\/en-sg\/blog\/industry-4-0-factory-of-the-future\/\">IoT and&nbsp;Industry 4.0<\/a>&nbsp;makes it imperative for companies to position themselves for a faster-paced environment with greater competition. By working closely with a given ERP vendor, manufacturers can identify key opportunities for their enterprise, and adopt a solution with this narrow scope in mind that can (and, most importantly) be easily scaled as needed.<\/p>\n\n\n\n<p>There\u2019s an immense price pressure on manufacturers to make processes faster, while creating products which are cheaper and better. Brand loyalty has changed alongside customer satisfaction and product saturation. If a customer has a bad experience, they\u2019re more likely to move to a competitor, especially if the price is cheaper.<\/p>\n\n\n\n<p>There are risks involved in not addressing these challenges with the right technology backing. Slow adopters won\u2019t necessarily stop growing or perform worse, but they may become so marginalized that they won\u2019t be able to survive in the future economy.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-476ad9d0-ec82-4a0c-bb25-98dd6821b545\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2019\/06\/GettyImages-626184462-1064x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2019\/06\/GettyImages-626184462-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The evolution of business management solutions for manufacturing companies has spawned a massive number of product offerings in the market. As solutions become more technologically advanced and robust, it can be difficult to sift through features that are required to support growth and those that are cosmetic. To get the most out of any solution, [&hellip;]<\/p>\n","protected":false},"author":356,"featured_media":573,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[146,144],"tags":[],"business_type":[11],"context":[],"industry":[85],"persona":[14,15],"imagine_tag":[93,121,96,131],"coauthors":[223],"class_list":["post-1374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-planning","category-strategy-legal-operations","business_type-medium-sized-business","industry-manufacturing"],"sage_meta":{"region":"en-sg","author_name":"Asavin Wattanajantra","featured_image":"https:\/\/www.sage.com\/en-sg\/blog\/wp-content\/uploads\/sites\/24\/2019\/06\/GettyImages-172957534.jpg","imagine_tags":{"93":"Business management","121":"Enterprise business","96":"ERP","131":"Manufacturing"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Singapore","distributor_original_site_url":"https:\/\/www.sage.com\/en-sg\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/posts\/1374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/users\/356"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/comments?post=1374"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/posts\/1374\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/media\/573"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/media?parent=1374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/categories?post=1374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/tags?post=1374"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/business_type?post=1374"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/context?post=1374"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/industry?post=1374"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/persona?post=1374"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/imagine_tag?post=1374"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-sg\/blog\/api\/wp\/v2\/coauthors?post=1374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}