History of ERP falls back to 1960! ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II.
From a business perspective, ERP has expanded from the coordination of manufacturing processes to the integration of enterprise-wide back end processes. From a technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.
Inventory Management & Control (1960s)
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)(1970s)
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) (1980s)
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) (1990s)
Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrate 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.
Web Functionalities with Internet (ERP II) (2000s)
Interaction of ERP with other application suite is enabled, an example is integrating with CRM systems. Accessing information using internet web-browsers and mobile devices were made possible. Technological advancement with Services Oriented Architecture (SOA) was adapted.
Cloud-based ERP (2010s)
Business applications are delivered as software as a service (SaaS) model. Servers are deployed on the cloud and accessed with rest APIs. Android, iOS, and browser applications are developed for delivering ERP software in SaaS model.
Future ERP system will have
- Big data analysis and advanced reporting
- Machine learning
- Artificial intelligence and automation
- Data secured with blockchain technology
- Virtual reality for better interactions
To get definitions of related terms, visit this link