We occasionally stumble over the truth but most of us pick ourselves up and hurry off as if nothing had happened”-Winston Churchill

ERP Limitations

The problem was that the term “Enterprise Resource Planning” was misleading to say the least because ERP systems provided very little functionality for manufacturers who actually needed to plan and schedule resources such as machines, people, and tooling.

During the late 1970’s MRPII and then ERP systems started to use the concept of Master Production Scheduling (MPS), which was supposed to give planners a tool to help them time phase and prioritize their work. To this day most ERP systems still use MPS and MRP

Unfortunately there is a major problem with MPS:

It assumes that purchase orders and work orders will be completed at the date that they are planned and has no mechanism for adjusting to anything that happens in the real world such as a late shipment from a supplier or a work center that is scheduled to more than 100% of capacity.

In an attempt to address the issue of one or more capacity constraints, ERP vendors introduced another new module that they called the Capacity Requirements Planning (CRP) module. Obviously some sort of reality check was needed to see if there would be enough capacity available to complete all the work orders, and the CRP module was definitely not the answer. Many of the limitations of ERP systems were tied directly to the limitations of the CRP module.

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