Enterprise Resource Planning
ERP Software for Manufacturers
ERP brings finance, sales, purchasing and planning into one system of record. Here is what manufacturing ERP covers, where it stops at the shop floor door, and what to do about it.
Definition
What is Enterprise Resource Planning (ERP) in manufacturing?
Enterprise Resource Planning (ERP) is business management software that brings finance, sales, purchasing, inventory and often production planning into a single system of record. In manufacturing, ERP manages customer orders, stock, procurement and high-level production plans.
ERP is excellent at planning and administration. What it is not built to do is run the shift minute by minute, which is why so many manufacturers with a capable ERP still run production from a spreadsheet.
How it works
How does ERP work in a manufacturing business?
Manages customer orders and quotations
Sales teams raise quotes and orders, which feed through into production demand.
Coordinates purchasing and inventory
ERP tracks stock levels, purchase orders, deliveries and supplier invoices in one place.
Supports production planning
Many manufacturing ERPs include MRP and master production scheduling to decide what to make and when.
Handles finance and reporting
General ledger, accounts payable and receivable, costing and financial reporting all sit in ERP.
Capabilities
Core ERP modules for manufacturers
- ✓Sales and customer orders
- ✓Purchasing and supplier management
- ✓Inventory and warehousing
- ✓Production planning, often with MRP
- ✓Finance and accounting
- ✓Basic quality and document management, in some systems
- ✓Costing and financial reporting
- ✓Master data for parts, BOMs and customers
Benefits
Benefits of ERP for manufacturers
A single source of truth
Orders, inventory and finance stop living in separate systems that disagree with each other.
Better financial control
Stronger compliance, cleaner audit trails and costing that finance can stand behind.
Coordinated departments
Sales, purchasing and production planning work from the same order book.
Standardised processes
Consistent ways of working across departments rather than per-person habits.
Where it fits
ERP vs MRP vs MES: where does ERP fit?
ERP is the commercial system of record. It sits above planning and execution, and rarely reaches all the way down to the machine.
| Layer | What it does | Its job |
|---|---|---|
| ERP | Finance, sales, purchasing and high-level planning | The commercial system of record |
| MRP | What to buy and make, and when, from demand and BOMs | Planning, working from planned data |
| MES | What is actually happening on the floor right now | Execution, working from live events |
The gap
Why ERP alone is not enough on the shop floor
- ✓ERP is built for planning and administration, not for running the shift
- ✓Limited visibility of live machine status, operator activity and stoppages
- ✓Detailed quality events are often recorded outside the system, or not at all
- ✓Production teams fill the gap with spreadsheets, whiteboards and separate tools
- ✓Job costs are only accurate once the job has been closed and invoiced
- ✓Delivery dates are promised from the plan rather than from live progress
DynamxMFG
DynamxMFG bridges the gaps between your ERP, MRP and MES
Stop losing margin to unplanned overtime, scrap and manual admin. DynamxMFG turns the hours your team spends on spreadsheets into productive capacity, and goes live in 90 days rather than 12 to 18 months.
Live in 90 days
A UK team configures DynamxMFG around how your factory actually runs, then gets you live in 90 days.
Keep your ERP
DynamxMFG sits alongside Sage, Xero, QuickBooks and Business Central rather than replacing them.
Built for SMEs
No enterprise implementation programme and no in-house IT team required.
Questions
Manufacturing ERP questions, answered
What is the difference between ERP and MES?
ERP manages the commercial side of the business: finance, sales, purchasing and high-level planning. An MES manages execution on the shop floor, tracking jobs, machines and operators in real time. ERP works from planned data, an MES works from live events. They are layers, not alternatives.
Do manufacturers need both ERP and MES?
Most do. ERP answers what the business has committed to and what it cost. An MES answers what is happening on the floor right now. Manufacturers running only ERP typically discover problems at month end rather than while there is still time to act.
Do I have to replace my ERP to get shop floor visibility?
No. DynamxMFG adds the execution layer alongside your existing ERP or finance system, and integrates with Sage, Xero, QuickBooks and Microsoft Business Central. You keep the system your finance team knows.
How long does a manufacturing ERP implementation take?
A traditional ERP implementation typically takes 12 to 18 months and needs internal IT resource. DynamxMFG goes live in 90 days because it targets the shop floor rather than replacing the whole business system.
Is ERP worth it for a small manufacturer?
It depends on where the pain is. If the problem is finance and purchasing, ERP is the right tool. If the problem is not knowing where jobs are, whether they are profitable, or why they are late, that is an execution problem and ERP will not solve it on its own.
Why does my ERP say a job is on time when it is not?
Because ERP reports the plan, not the floor. Unless someone is manually updating progress, the system shows what should be happening. An MES captures actual start and finish times at each operation, so status reflects reality without anyone maintaining it.
Related reading
Read next
Background reading on ERP software from the DynamxMFG glossary and blog.
See what your ERP cannot show you
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