The small difference: ERP and merchandise management

Although software for merchandise management and ERP software sometimes still used as synonyms, they refer to different system solutions. But what is the difference between an enterprise resource planning (ERP) system and an ERP solution? While merchandise management focuses on goods, their storage and related warehousing, an ERP software has the task of using all resources (goods, capital and personnel) efficiently(er) and thus improving business processes. The difference can best be seen in the task areas:

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merchandise management

The focus is on the flow of materials. Therefore, tasks such as procurement, demand assessment, logisticsstorage, the transport within the company and the production as well as disposal and recycling into the field of merchandise management.
The connection of inventory management and distribution is also part of an enterprise resource planning system. Furthermore, merchandise management has the task of precisely distinguishing recorded materials. A distinction is made between the following material and substance groups:

Raw materials
Auxiliary materials
Semi-finished products
Operating supplies
finished components for assembly
Components and end products in production
Spare parts
End products
Waste and wear materials
By-products
Intermediate products of pure trade

ERP

ERP systems rely on overall resource planning from the outset and are thus often very complex. The software solutions are adapted to the size of the company and its structures. A wide variety of programming languages are used, databases or operating systems are used.
An ERP system also integrates customers and suppliers and thus thinks beyond the company. Also other subsidiaries or Subsidiary are integrated.
Thus, in addition to merchandise management, an ERP also records the following in its functional area production, Finance and accounting, controllinghuman resources, research and development, and sale and marketing. Here there are usually interfaces to CRM systems. It is to be expected that ERP and CRM functions will be even more strongly merged within one software in the future.

ERP reaches more industries than an enterprise resource planning system

The word "merchandise management" already implies that a merchandise management system deals with the management of goods. However, this approach has long since ceased to meet the needs of many people. Industry sectors. Value creation in many companies no longer takes place exclusively via the sale of goods is taking place. Instead, the importance of services is constantly growing.

There are companies that only offer services. These companies from the Service industry have different demands on a business software than what an enterprise resource planning system can do. For a long time, attempts were made to map the service within the merchandise management system. However, this attempt was often only a crutch that largely 'misused' an ERP system.
ERP software can break free from these constraints. For example, there are ERP systems that also deeply integrate the management of projects, contracts and services. A ERP system for service providers often has little to do with the original approach from merchandise management. But also ERP solutions for plant engineering are far removed from the approach of a pure merchandise management system.

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