What is ERP (Enterprise Resource Planning)?

Enterprise Resource Planning (ERP) is a single integrated system that runs the commercial side of a business: finance, purchasing, sales orders, stock and often HR, all working from one shared database. The point of ERP is that a sales order, the stock it consumes, the purchase order that replaces it and the invoice that follows are the same record seen from different angles, rather than four separate systems that have to be reconciled. For manufacturers, ERP is where the money lives. It knows what you have sold, what you have bought, what you owe and what you are owed.

How manufacturing ERP works

ERP grew out of MRP in the 1990s, widening the scope from material planning to the whole business. A typical manufacturing ERP covers financials, purchasing, sales order processing, inventory, and a planning engine that works out what to buy and make. Modern systems are usually cloud hosted and licensed per user per month, which has brought them within reach of factories that could never have justified the capital cost of an on-premise implementation. The trade-off is that a broad system is rarely deep in any one area.

Where ERP stops and the shop floor begins

The gap most manufacturers hit is the shop floor. ERP is excellent at planning and accounting and weak at knowing what is actually happening at each machine right now, because it was never designed to collect data at that resolution. It will tell you a works order was issued for 500 units. It will not tell you that operation three has been sat waiting for a fixture since Tuesday. That is the space MES occupies, and it is why so many factories run an ERP for the commercials and something else for execution.

ERP and DynamxMFG

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