ERP systems are software tools used for the planning and control of the product from order entry through shipment. The typical ERP suites integrate the manufacturing, distribution and financial functions. Thus, ERP systems are business strategies to enable manufacturing companies to optimize their operations.

As Manufacturing Resource Planning (MRP II) systems of the 1980's expanded into ERP, software vendors added more functionality, such as extensive accounting and financial capabilities. In addition, ERP systems differ from earlier MRP II systems in the use of more modern IT capabilities, such as Graphical User Interfaces (GUI’s).

ERP systems are designed to optimize material flow and manufacturing processes. In a serial fashion, ERP systems generate successive levels of plans, such as master schedules, material requirements, and capacity plans. However, serial processing of material needs, then capacity needs, does not truly optimize plans. To make-up for the weaknesses of ERP systems, ERP vendors or other software sources have provided more sophisticated capabilities, such as Advanced Planning Systems (APS). In addition, for a viable configurability strategy, ERP systems need to be integrated with lean manufacturing concepts and tools, and capitalize on the capabilities of configurators.

Other supplemental capabilities are provided by systems for Customer Relationship Management (CRM), Manufacturing Execution Systems (MES), Supply Chain Management (SCM), and for companies with configurable products software tools known as configurators. In general conversations, “ERP” is often interpreted as encompassing these modules since most ERP vendors offer these modules in their suite as well as third party sources of software.