How ERP Systems Help in the Manufacturing Industry


Manufacturing companies turn raw materials into finished goods, often mass producing them for a large number of customers. Production can involve sizable amounts of inventory and complex processes, both which need to be managed in some way. An ERP system helps with this.

A good manufacturing ERP software will cover the full production process, from product development to sales. It’ll incorporate engineering, to the procurement of inventory, to the actual production. This connects the entire company, increasing efficiency and streamlining work. Below are 7 important areas an ERP solution can help manufacturers with:

  1. Bill of Materials

The bill of materials (BOM) is the list of materials and quantities necessary for the production of a particular product. It’s created by engineers involved in development (for example, through CAD), and then transferred onto the ERP system. A BOM allows purchasing at the company to procure the factors of production in appropriate quantities and drives the assembly process.

  1. Supply Chain

Consequently, a good manufacturing ERP software will also have supply chain features to procure goods needed for production. Supply chain management ensures that all the required components of the BOM are available when needed, without having to invest in excessive stock levels. Features can include EDI capability, contract management, low stock notifications, and auto-replenishment/forecasting of preferred vendors.

  1. Inventory Management

Especially if they’re involved in mass production, manufacturers will have a large amount of inventory coming in and going into production. Therefore, a good system will be able to track all of this inventory, along with their characteristics, numbers, locations, et cetera.

  1. Routing

Before manufacturing takes place, routing needs to be properly defined. Routing is basically the methods to create the product using the materials outlined in the BOM. This may involve multiple stages and multiple work centers (the groups of individuals/locations where production activity takes place).

  1. Work Orders

With the BOM and routing properly defined, manufacturing can finally take place. Users will create work orders on the ERP system that properly organize what needs to be done and where it needs to be done at, directing employees into action.

  1. Maintenance

A manufacturing ERP can also allow maintenance orders to take place for repairs and other fixes. Such orders will organize requests and be assigned to the maintenance team. With ERP systems such as Odoo, these systems can also automate preventive maintenance (regularly scheduled maintenance on items so that they’re less likely to fail) by computing statistics such as average time to failure.

  1. Quality Check

Finally, a quality check system is also highly useful for manufacturers. Businesses can assign a quality inspection to take place at certain stages before items move forward. This can include checks for purchased materials before production, in the middle of manufacturing stages, or as final inspections. When problems are discovered, having a quality check system in place helps narrow down where the issue may have come from.

A good manufacturing ERP software connects all of these processes from start to finish. It unites all the different departments involved, helping them work together in a more optimal manner. Thus, it increases efficiency, streamlines their work, and reduces error.

Bista Solutions is an expert on implementing business solutions for manufacturing companies. If you have any questions or are interested in your own ERP solution, send us a message by using our contact form.

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