A Brief Historical Look at the Evolution of Enterprise Resource Planning

Enterprise resource planning (ERP) is an integral component of today’s complex global marketplace. ERP software helps companies streamline business processes.

Enterprise resource planning (ERP) is an integral component of today’s complex global marketplace. ERP software helps companies streamline business processes, including:

  • Product planning, cost and development
  • Manufacturing or service delivery
  • Marketing and sales
  • Inventory management
  • Shipping and payment

ERP resource planning systems can track, connect, and improve business functions. Their major benefits include automating tedious tasks and increasing transparency.

They also provide a complete, real-time view of operations, creating a common database and single source of truth. This makes data visualization and reporting significantly easier.

However, ERP solutions weren’t always this advanced. How did enterprise resource planning evolve? Check out the infographic above for a timeline of the evolution of enterprise resource planning. You can also read the highlights below.

The Evolution of Enterprise Resource Planning

The 1960s: – Growth of Enterprise Information Systems (EIS)

Early systems were based on automation for individual functions, like financial accounting or inventory management.

EIS systems were a major improvement. However, they were also very limited in scope. Additionally, their high costs prevented most businesses from using them.

The 1970s: – Shift to Material Requirements Planning (MRP)

MRP systems tapped into the master production schedule, allowing businesses to plan the parts and product requirements.

This is the start of the continuous development seen in ERP solutions up through the present day. However, the same problems with EIS software — cost and accessibility — remained

The 1980s: – Manufacturing Resource Planning (MRP II) Introduced

MRP II software emphasized an optimized manufacturing process that coordinated materials and production requirements, extending services to:

  • The shop floor
  • Finance
  • Human resources
  • Engineering
  • Project management
  • Distribution management

Connecting different teams and departments across a business is a foundational concept in today’s ERP. These wider-reaching benefits also began to build more interest in ERP (or MRP II, at the time). It started to become an option outside of the manufacturing industry.

The 1990s – Birth of Enterprise Resource Planning

By the early ‘90s, MRP-II had been extended to include enterprise-wide functions and integration.

Extended MRP II systems were renamed enterprise resource planning systems. This is the same concept that applies to modern ERP solutions.

ERP uses a single database containing all the data that keeps the processes running smoothly, ensuring visibility, accessibility, and consistency.

2000s and Beyond: – Extended Enterprise Resource Planning

Extended ERP systems include:

  • Customer relationship management
  • Supply chain management
  • Advanced planning and scheduling

Continuing ERP trends include capabilities for:

  • Cloud
  • Mobile
  • Analytics

ERP continues to develop, expand, and improve. The cloud, along with mobile access, has made ERP far more accessible. The addition of analytics offers even more insight into your company’s operations.

Ready to transform your organization with an ERP solution designed for A&D manufacturers, general manufacturers, and machine shops? Get in touch with the experts at CTND today!

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Posted in ERP