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ERP For MRO: An Alternative Perspective


May 15, 2008



 
What is ERP for MRO? Until recently, it didn't amount to much. Over the last decade, however, SAP and Oracle, the world's dominant ERP vendors, turned their attention to aerospace and aviation generally, and MRO in particular. These days commercial and military MRO organizations interested in software that integrates their information systems, illuminates their operations and improves their planning, coordination, and effectiveness have many ERP options available to them.

First, a preliminary and possibly difficult question: What is ERP?

Some say it was born in the 1960s from the union of IBM, the mightiest computing company the world had seen to that point, and J.I. Case, a maker of tractors. It was called Material Requirements Planning (MRP). It grew over the next decade, taking on more functions, such as production scheduling and inventory planning. In the 1980s, MRP mutated into MRPII, with expanded powers for coordinating manufacturing processes. In the 1990s, when its reach extended to finance, human resources, engineering and project management, MRPII became ERP (enterprise resource planning).

ERP first gained fame slaying the dragon of disconnection. In the early days of IT, companies had no recourse but to keep large computers (mainframes and their descendents) captive on isolated information "islands." Within a single company, data easily became scattered, redundant, divergent and out of date, making good information artificially scarce. Vendors like SAP would be called in to raze a company's information "silos" and install software to harness the numerous sub-systems, training them to behave as though they worked off one database and shared a common interface. One can imagine the motto on young ERP's shield read: e pluribus unum -- out of many, one.

What is ERP today? To speak of it as something fixed can lead to foolishness. ERP has evolved. It still is evolving. There is no universally accepted definition. The term is notorious, elastic or just elusive. But, provisionally, let's say this: ERP is a heavy-duty business software package designed to promote the cross-functional integration of data and resources across the enterprise.

"The big value-add of ERP systems," as Dr. Morris Cohen, chairman and co-founder of MCA Solutions and a professor at the Wharton School, sees it, "is consistency across multiple systems." This creates a "unified and consistent enterprise approach." The "R" and "P" in ERP may have faded, but the "E" shines on.

One complication is ERP historically has taken a certain form, working its magic through modules attending to what was seen as the heart of most enterprises: production, accounting, finance. Thus, ERP has manifested a unifying tendency of another sort. It is, after all, a software package, a single product sold to multiple customers. Even if it comes in different versions or is open to modification, it is, due to understandable economic trade-offs, not built to the specification of the individual customer but on what are presumed to be universal practices or on the "best practices" of the industry to which a firm might belong.

With its roots in manufacturing, ERP thus was long unprepared to deal with the peculiar processes and procedures characteristic of aviation maintenance and repair. Its "heart" simply may have been in the wrong place.

A Breed Apart

ERP must track a company's business activities in every meaningful detail. If it can't accurately and comprehensively map a business, what is omitted will not be monitored, measured or managed, leaving ERP no more helpful than a clock without hands.

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