Why is manufacturing ERP different from accounting software?
Accounting software can record costs and invoices but may not manage the journey from raw material to finished product.
Manufacturing requires production, inventory, operations, costing and accounting to work together.
How do materials move through production?
- ✓ Raw materials in stock.
- ✓ Production requirement or plan.
- ✓ Production order.
- ✓ Material issue.
- ✓ Production activity.
- ✓ Finished-goods receipt.
- ✓ Cost calculation.
What is a Bill of Materials?
A Bill of Materials defines the components and quantities required to produce an item.
A structured BOM helps material planning and allows actual consumption to be compared with expected consumption.
How does manufacturing connect to inventory?
Producing an item usually consumes raw materials and increases finished-goods quantity.
If these movements are disconnected, inventory and costing differences become difficult to control.
Why does product costing matter?
Pricing without understanding manufacturing cost can lead to lower margins than expected.
ERP helps organise cost information so management can analyse profitability more effectively.
Which reports does a factory manager need?
- ✓ Open production orders.
- ✓ Planned vs completed quantities.
- ✓ Material consumption.
- ✓ Material requirements.
- ✓ Product cost.
- ✓ Work in progress where relevant.
- ✓ Production by period.
Manufacturing ERP in NOZOM .cloud
NOZOM .cloud can connect inventory, purchasing, manufacturing, accounting and reporting instead of managing each area independently.