Planning for material requirements in companies with manufacturing operations involving a large number of input materials processed in more than one manufacturing stages can get very tedious, requiring a large input data on manufacturing plans, existing stocks of purchased material and work in progress, and engineering standards of material requirements. In response to these requirements a number of readymade software systems were developed and offered in the market. A number of these software offerings were called Material Requirement Planning (MRP) packages representing their focus on Material Requirement Planning. At heart of these MRP package were bill of materials (BOM), which are engineering standards on material requirements for manufacturing operations. These BOM are prepared for each and every item to be manufactured in the company at each stage of manufacture. The MRP package had a very simple common processing logic involving the following steps.
The total input material requirements for final stage of production requirements is worked out using the finished goods production plan quantities and the BOM of final stage of production of items included in the production plan.
As vendors of MRP packages improved the capabilities of their product, they started using names like MRP II to separate the earlier versions of MRP from the latest version. Subsequently the capabilities of MRP was expanded to cover planning for other resources such as labor and equipment capacities. These versions of MRP capable of planning for many different types of resources within an enterprise acquired the name of Enterprise Resource Planning (ERP) systems.
Every ERP system worth its name must have provision for entering and modifying bill of material data, which normally originates in engineering design departments of many companies. These facilities may be extended to help the engineering design people to maintain and revise the design data. A vendor may describe this facility under engineering management function. But most certainly, as on date, no ERP package gives CAD facilities as part of engineering management.