History and Evolution of ERP
ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.
The following table summarizes the evolution of ERP from 1960s to 1990s.
Inventory Management & Control
Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.
Material Requirement Planning (MRP)
Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation.
Manufacturing Requirements Planning (MRP II)
Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.
Enterprise Resource Planning (ERP)
Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources.
ERP History in Depth
The evolution of the systems dates back to the year 1960 as per ERP history. The systems in the yesteryears were designed to assist the manufacturing process.
The first software that was developed in this process happens to be MRP (material Resource Planning) in the year 1975.This was followed by another advanced version namely MRP2 which is the acronym for Manufacturing Resource planning. None of them yielded the benefit of ERP.
Drawback of MRP Systems
These soft wares were helpful in manufacturing process. Their benefits did not extend to other Sectors. ERP was developed as multifaceted software that gradually stretched its limits into other areas like human resource, finance, marketing and so on. Moreover ERP offered operational convenience and large reduction in costs coupled with other benefits when compared with earlier soft wares.
MRP solutions attained more fame. Infact it became a hallmark of the manufacturing setups. The MRP solutions did not render the expected results due to exorbitant costs and practical work problems.Inaddition it also called for a huge pool of technical expertise in terms of manpower and machines.
Advent of ERP
ERP came into being with effect from 1990 though the fact remained that many people are of the opinion that ERP existed from the year 1960 in the form of MRP1 and MRP 2. IN Fact MRP II was more or less an ERP except for its inability to coordinate departments other than marketing. The whole period from the year 1960 is denoted as the age of ERP.The benefit of ERP was slowly felt from this stage onwards.
Sap ERP history contains detailed study of SAP's association with ERP.Global ERP leader SAP technologies were established in the year 1972 by five engineers. This was followed by invention of larson software which was a built in model. It was meant to replace the market practice of designing soft wares as per individual business needs. Some more companies namely Oracle and Baan Corporation were included in the fray in 1970 and 1980's.This was followed by the invention of People soft and their software on Human Resource Management in the years 1987 and 1988 respectively. Baan Corporation specialized in rendering financial and management consultation services. Oracle was the first ever company ever to offer commercial and relational database management systems.
The operating systems that were in vogue during the period are important in understanding the history of ERP. JD Edwards Co Founder of moniker (in the year 1977) made use of IBM Systems/38.Baan Corporation utilized UNIX.
Market Information on Companies
Sap holds the privilege of being the world's largest enterprise company. JD Edwards and Oracle enjoy a whooping customer base of 4700(in 100 countries) and 41000 customers around the globe. People soft controls more than a half of the human resource market and has offices in many nations.
While ERP is a technological innovation in itself its efficiency is multiplied by several times with the help of latest inventions. Nowadays ERP is tuned to make use of the internet. This is to make sure that the buyers anywhere can have access to the database of the seller by a mouse click and that too by sitting anywhere in the world. This has become the mantra in the 21st century. The latest ERP tool which is becoming the order of the day is ERPII which is discussed in detail as separate links in the website. SAP Erp History and ERP history are vital in understanding the origin of the subject matter.
(Source: www.sysoptima.com and www.erpwire.com)