What does ERP stand for in supply chain software?

In supply chain software, ERP stands for Enterprise Resource Planning.

An ERP system integrates core business functions through shared data and connected applications. Typical modules cover purchasing, inventory, manufacturing, sales, accounting, human resources and order management. Instead of each department keeping isolated records, the system creates a common operational picture that can be updated in real time.

The term grew out of manufacturing technology. Material requirements planning, or MRP, first helped companies calculate the components needed for production. MRP II expanded that idea to broader manufacturing resources. During the 1990s, the acronym ERP came to describe software that coordinated resources and processes across the enterprise, not just the factory.

ERP is often confused with a warehouse-management system or a customer-relationship-management system. Those can be separate products or ERP modules. The defining idea is integration across business processes, usually supported by a shared database. Modern ERP platforms may run on company servers or in the cloud.