Key takeaways
- Core set
- Nine modules in a manufacturing ERP
- What links them
- One shared database, not file exports
- Where to start
- Inventory, purchase and sales; production follows
- Most overlooked
- Job work and quality
- Most valued
- Costing, once the others are live
How ERP modules connect
It is tempting to think of ERP modules as separate programs that happen to share a login. They are not. A module is a set of screens and rules over one part of a single shared database. When the sales module records an order, the planning module does not import it; it reads the same record. When the store receives yarn against a purchase order, the stock exists for production and for accounts at the same moment.
The easiest way to see the connections is to follow the main document chain in a factory:
| Document | Created in | Read by |
|---|---|---|
| Sale order | Sales and orders | Planning, production, dispatch, accounts |
| Material plan | Planning and MRP | Purchase, store |
| Purchase order and goods receipt | Purchase | Store, quality, accounts |
| Job card | Production | Store, quality, costing, payroll |
| Inspection result | Quality | Store, dispatch, costing |
| Dispatch and invoice | Sales and dispatch | Accounts, GST, costing |
Each module below is described by what it does, the documents it creates, the reports it answers and who uses it day to day.
1. Sales and orders
The sales module holds what customers have asked for and what you have promised: quotations, sale orders, prices, delivery schedules and the status of each line. In a manufacturing ERP the order carries the details production needs, such as style, size ratio, colour, drawing revision or count.
Documents it creates
- Quotation
- Sale order and amendments
- Delivery schedule
- Proforma invoice
Reports it answers
- Open orders by customer and date
- Orders at risk of delay
- Price realisation by customer
Who uses it: sales team, owner, planning and dispatch.
An auto-component plant receives a monthly schedule from an OEM. Each schedule line becomes an order line with a date, and dispatch is made against it, so the plant always knows what is due this week.
2. Planning and MRP
Planning turns orders into requirements. Material requirements planning (MRP) explodes each order through its bill of materials, compares the result with stock and open purchase orders, and shows what to buy and when. Production planning sequences the work on machines and lines.
Documents it creates
- Material requirement plan
- Production plan
- Purchase suggestions
Reports it answers
- Shortages against open orders
- Machine and line loading
- Material reserved for each order
Who uses it: planning and production head, purchase.
A garment unit plans 4,000 pieces across three styles. MRP shows that one fabric quality is 600 kg short and that buttons for another style arrive after the cutting date. Both are visible before cutting starts. See What is MRP? for a worked example.
3. Purchase and job work
Purchase covers buying material and services: purchase orders, approvals, goods receipt against the order, and supplier bills. In Indian manufacturing it also covers job work, where material is sent to an outside processor on a delivery challan and comes back processed.
Documents it creates
- Purchase order
- Gate entry and goods receipt note (GRN)
- Job-work challan and receipt
- Supplier bill matching
Reports it answers
- Pending purchase orders
- Supplier delivery performance
- Material pending at each job worker
- Job-work shortage by processor
Who uses it: purchase team, store, accounts.
A knitting unit issues 2,000 kg of yarn to three knitters. Receipts are entered against each challan, and the system shows that one knitter is 3.4% short against an agreed allowance of 2%. More in job work and ITC-04.
4. Production and work in progress
Production records the conversion of material into product: job cards or work orders, routings, issues of material to the floor, output by stage, rejection and rework. Work in progress (WIP) is the material that has been issued but is not yet finished.
Documents it creates
- Job card or work order
- Material issue slip
- Production entry by stage
- Rework and rejection notes
Reports it answers
- WIP by stage and order
- Output and rejection by machine, line or operator
- Yield by process
Who uses it: supervisors, production head, owner.
A hand-tool plant forges, trims, heat-treats, grinds and plates each lot. The job card moves with the lot, so the production head sees exactly how many pieces are at each stage and where rejection is highest.
5. Inventory
Inventory is the record of what you have and where it is: raw material, consumables, WIP and finished goods, by item, lot, heat, shade, rack and store. Every receipt, issue, transfer and dispatch updates it, so stock is a result of the other modules rather than a separate count.
Documents it creates
- Stock transfer
- Rack or bin assignment
- Stock adjustment with reason
- Barcode or QR tags
Reports it answers
- Stock by item, lot and location
- Slow-moving and dead stock
- Stock ageing
- Reorder alerts
Who uses it: storekeeper, purchase, planning, accounts.
A spinning mill weighs each cone bag into stock with the count and lot. When a customer complains about a count, the store can show every bag of that lot, where it went and what is still on the rack.
6. Quality
Quality holds inspection plans and their results: what must be checked at receipt, during production and before dispatch, and the decision to accept, hold or reject. In a good ERP a hold is enforced: held material cannot be issued, packed or invoiced.
Documents it creates
- Inspection plan per item or drawing
- Incoming, in-process and final inspection reports
- Hold and release notes
- Test certificates
Reports it answers
- Rejection by reason, supplier and process
- Lots on hold
- Right-first-time rate
Who uses it: quality inspectors, production head, customers who ask for certificates.
A dyeing house records the shade result of every batch against the approved lab dip. Batches that fail are held for re-dyeing, and the cost of the reprocess is recorded against the batch.
7. Costing
Costing adds up what an order, lot or process actually consumed: material at the rates of the lots used, wages, machine time, job-work charges, rejection and overheads. It compares the result with the quoted price or the standard cost.
Documents it creates
- Cost sheet per order or lot
- Overhead allocation rules
- Standard cost (where used)
Reports it answers
- Actual vs quoted cost by order
- Margin by customer, style or drawing
- Cost of rejection and rework
Who uses it: owner, accounts, sales (for pricing the next order).
A fastener plant compares two customers buying similar bolts. Costing shows that one customer's lots need extra plating rework, which explains why that business earns less despite a higher price.
8. Accounts and GST
Accounts keeps the books: ledgers, receivables, payables, bank and cash, and the statutory side of the business. In an integrated ERP most entries post automatically from operations: a goods receipt creates the supplier liability, a dispatch creates the sale. GST documents such as e-invoices and e-way bills come from the same entries.
Documents it creates
- Sales and purchase invoices
- E-invoice (IRN) and e-way bill
- Credit and debit notes
- Payments and receipts
- TDS entries
Reports it answers
- Receivables and payables ageing
- GST returns data
- Profit and loss, balance sheet
- ITC-04 for job work
Who uses it: accounts team, chartered accountant, owner.
A garment exporter raises the invoice from the packing list. The IRN is generated, the e-way bill is created with the vehicle number, and the sale is in the GST data without anyone retyping it. See GST, e-invoice and e-way bill in ERP.
9. HR and payroll
HR and payroll covers people: employee records, attendance, shifts, leave, wages and statutory deductions. Manufacturing payroll has to handle piece-rate and production-linked wages as well as monthly salaries.
Documents it creates
- Employee master
- Attendance and shift roster
- Piece-rate wage sheet
- Salary slip
- ESI and PF data
Reports it answers
- Wages by department and line
- Overtime
- Labour cost per order
Who uses it: HR, accounts, supervisors.
In a stitching unit, piece-rate wages are calculated from the bundles each operator completed on the production entry, not from a separate slip. Disputes over counts drop because both sides read the same record.
Which modules to start with
You do not have to switch on everything at once. In most plants we follow this order, because each step makes the next one accurate:
- Inventory, purchase and sales. Get stock, receipts and dispatches right. Everything else depends on them.
- Accounts and GST. Post from operations, so books and stock agree.
- Production and job work. Record conversion and outside processing against lots.
- Quality. Add inspection plans and holds once lots are tracked.
- Planning and costing. With clean data, plans and cost sheets become trustworthy.
- Payroll. Often last, unless piece-rate wages are the main reason for the ERP.
A full single-plant implementation still fits into four to six weeks; the order above decides what is switched on first within that time. See ERP implementation, step by step.
Questions buyers ask
What are the main modules of ERP?
For a manufacturer: sales and orders, planning and MRP, purchase and job work, production and WIP, inventory, quality, costing, accounts and GST, and HR and payroll. Trading businesses usually need fewer.
Do all ERP modules need to be bought together?
No. Most vendors, including eManage, let you start with the modules you need and add others later on the same database. The order of switching them on matters more than buying them all.
Which ERP module is most important for a factory?
Inventory, because every other module reads from or writes to it. Without accurate stock, plans, costs and books cannot be trusted.
Is MRP a module of ERP?
Yes. MRP (material requirements planning) is the planning module that works out what material is needed and when. ERP grew out of MRP systems in the 1990s.
Does an ERP include GST and e-invoicing?
An ERP built for India should generate e-invoices, e-way bills and GST return data from the same sale, purchase and job-work entries. Check this in the demo with your own invoices.
Can modules be customised for my industry?
Industry editions reduce the need for customisation because the trade's documents are already built in. Remaining changes are usually print formats, approval rules and reports.