The transition from a pure Merchandise management system to an ERP is fluent. The Merchandise management system is for mapping the flows of goods in the business process of a company. Main areas are purchasing, sales & warehousing. An ERP in contrast is a holistic software for business administration. Its task is to efficiently use and control all available resources (goods, capital and personnel) to optimize business processes. A demarcation to the Merchandise management system therefore takes place primarily via the pure functional scope. But also at the level of the performance of a company - because service processes can not be depicted in a Merchandise management system in most cases.
Merchandise management system
The most important task of a Merchandise management system is the mapping & control of material flow in purchasing, sales & warehousing. These include, above all, the preparation of offers, orders, delivery notes and invoices. In purchasing, this includes the functions of determining requirements by minimizing minimum stocks, generating order proposals and automatically triggering an order.
Warehousing is the interface between purchasing and sales. The task is to ensure exact internal inventory management in order to properly record all transaction data. This also includes the internal reservation & stock removal for the production.
Companies operating in the trade have the choice between Merchandise management system and ERP. Companies that create value through services do not have that choice. The mapping and control of the processes must take over an ERP. Areas of an ERP can be: Sales, Purchasing, Warehousing, Personnel, Event, Projects, Manufacturing, PLM, Finance, CRM (see Odoo), Marketing and Document Management. In addition, the ERP is thinking beyond the own company: For example, suppliers and customers are always integrated and linked to the various ERP areas.
An essential difference from a Merchandise management system to ERP is therefore the holistic application, which avoids small island solutions and thus simplifies many things. These include focusing on one software, both in the IT area and by the employees. Especially in the IT area, such high costs can be saved by hiring specialists. But also the saving of license costs for the software itself, is a not to be despised point.
ERP affects the entire resource planning and not just the material flow.
ERP can be used in trade and service companies.
ERP systems have a larger range of functions (sales, purchasing, manufacturing, etc.).
ERP replaces several softwares (island solutions).