What is Enterprise Resource Planning?

In Enterprise Resource Planning (ERP), “planning” is the focus. Familiar terms like MPS (Master Production Scheduling) and MRP (Material Requirements Planning) focus on planning production and raw materials, but they don’t cover the full value of ERP software. Nowadays, planning is discussed everywhere: from Integrated Business Planning (IBP), which connects business plans across all departments, to Sales & Operations Planning (S&OP), which aligns sales and production more effectively. Whether it’s logistics, production, or strategic choices, planning is always an essential theme.
However, I notice that planning isn’t always seen as a priority in conversations with clients. “We already have an MRP system,” is a common response when it comes to production planning. And for questions about inventory management, I often hear, “we maintain minimum stock levels.” Planning sometimes seems overlooked in ERP, which contrasts with the growing media focus on improved planning methods like IBP and S&OP.
Why optimizing the planning process is important
Why are companies often hesitant about their planning approach? Improving the planning process requires time and investment, and the benefits aren’t always immediately visible. However, any company can benefit from regularly evaluating its planning process. Changes in demand, sales, or product range are often reason enough to re-examine planning.
Planning outside the ERP system
Another reason why planning may be underemphasized is that it often takes place partially outside the ERP system. When planning is done with specialized software and the results are well-integrated with the ERP system, this works well. But often, planning is still done in Excel because it is flexible and easy to adjust. However, this can lead to problems, as the planning then depends on the approach and preferences of the person managing the Excel sheet, resulting in a suboptimal outcome for the company as a whole.
Planning as an agenda item in strategy sessions
A precise alignment of demand, production, inventory, and supply is complex, and changing this process is not easy. But this shouldn’t be a reason to remove planning from the strategic agenda. Planning deserves attention at least once a year during strategic meetings.
Experience with planning issues
At Cadran, we support clients in improving their planning processes. We don’t come with ready-made solutions but instead work together to find the best approach, building on our experience. Sometimes we discover new insights or solutions together, and in certain cases, custom adjustments are needed. Specifically for JD Edwards EnterpriseOne, we have developed a digital planning board at Cadran that displays all planning activities clearly on one screen, making the planner’s work much easier. I’ll share more about this in an upcoming blog.
This is how we ensure that planning maintains a permanent spot on the agenda, especially as topics like Sales & Operations Planning, Integrated Business Planning, and digital planning boards gain more attention in our conversations with clients.

Ed Pieters
Managing Partner
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