A factory owner in SITE or Korangi knows the selling price of every product by heart. Ask what the last batch cost to make and the answer is a costing sheet prepared when the product was first launched. Since then the material prices, the recipe and the workers have all changed. The sheet has not.
What a manufacturing ERP adds to a trading ERP
A trading system records goods bought and the same goods sold. A factory buys one set of things and sells another, and the conversion in between is where stock disappears and cost is decided. A manufacturing ERP in Pakistan keeps the usual purchasing, stock and sales modules and adds three records: the bill of materials, the work order and the production entry. The rest of this guide follows from those three.
The bill of materials: the standard
A bill of materials, or BOM, lists what one unit or one batch of a product needs: each raw material and packing item, with its quantity and unit. For a food or chemical product it is a recipe; for furniture or an appliance it is a parts list. Two details matter more than they seem.
- Versions. When the recipe or design changes, the old BOM is kept and a new one is dated, so earlier batches are still compared against the standard of their time.
- Expected loss. If a process always loses some material in trimming, evaporation or setup, write that into the BOM. Otherwise every batch looks wasteful and the real problems hide among the false ones.
Work orders: what actually happened
A work order is the instruction to make a certain quantity of a product. The store issues material against it, the floor reports what came out, and the order is closed. The rule that makes the whole system work is simple and hard to keep: nothing leaves the raw material store without a work order number on the issue slip. Once that habit holds, every kilogram is tied to a product.
| Record | Where it comes from | What it tells you |
|---|---|---|
| Planned material | The BOM multiplied by the quantity ordered | What this batch should consume |
| Issued material | Store issue slips against the work order | What the floor actually took |
| Returned material | Unused material sent back to the store | What was taken but not needed |
| Good output | The production entry at the end of the shift or batch | What can be sold |
| Rejects and scrap | Quality check and scrap entry | What was made and lost |
Consumption and wastage
Issued minus returned is consumption. Compare it with the planned figure and you have the variance for that batch, in quantity and in rupees. One bad batch means little. The same material running over on every batch of one product points to a wrong BOM, a worn machine or material leaving by another door. The system does not tell you which. It tells you where to look, while the batch is still fresh in everyone's memory.
Scrap that is sold, such as offcuts, rejected pieces or empty bags, should be entered as stock and then sold on an invoice. Scrap sold for cash at the gate is the easiest money in a factory to lose track of.
The real cost of a product
With actual consumption recorded, cost stops being an estimate. Material is valued at what was really paid for it. Labour is added per work order, by hours or by piece rate. Overheads such as electricity, gas and rent are spread across the month's production on a basis you choose. The result is a cost per unit for each batch, which you can set against the selling price. Some owners discover that their busiest product is also their thinnest. Our guide to ERP financial management explains how these figures reach the accounts.
When you do not need it
If you assemble a small range from bought parts and the owner personally hands out the material, a basic ERP system with good stock control is enough. Production records earn their place when several products share the same raw materials, when wastage is a real part of your cost, or when buyers ask for batch records.
Bringing it onto the floor
Write the BOMs
Start with the products that sell most. Weigh and count a real batch instead of copying the old costing sheet.
Separate the stores
Raw material, work in progress and finished goods each get their own location in the system, even if they share one hall.
Issue only against work orders
The storekeeper gives out material when there is an order number, and enters returns the same day.
Record output every shift
Good pieces, rejects and scrap are entered by the supervisor, not reconstructed at month end.
Review variance every week
Sit with the production manager and go through the batches that used more than planned.
Operix builds ERP software with these production records for manufacturing companies, and trains storekeepers and supervisors on the live system in Urdu or English. To see a work order run on your own products, book a demo.
Questions people ask
What is a manufacturing ERP?
An ERP with production records added to purchasing, stock, sales and accounts. It holds bills of material, runs work orders, records consumption and output, and works out the cost of each batch.
What is a bill of materials?
A list of every raw material and packing item needed to make one unit or one batch of a product, with quantities. It is the standard that actual consumption is compared against.
Can the ERP show wastage per batch?
Yes. Each work order compares the material planned by the BOM with the material actually issued and returned. The difference is shown in quantity and in value for that batch.
Do we need barcode scanners or machines connected to the ERP?
Not to begin with. Issue slips and production entries typed by the storekeeper and supervisor are enough to get consumption and cost. Scanning can be added later where the volume justifies it.
How much does a manufacturing ERP cost in Pakistan?
The price depends on the production stages, the modules, the number of users and the locations. Operix does not publish prices; ask for a written quote after a discovery visit or call.