Manufacturing ERP Checklist: 33 Questions to Ask Vendors

0 of 33 ticked

Ask the vendor to show each point on screen with your kind of data. Tick it only when you have seen it working.

BOM and production planning01Can it hold multi-level bills of material with versions and an effective date?02Can it work out material required from pending orders and show shortages before production starts?03Can it raise work orders and track each one through every process or machine?04Can it record production shift-wise and machine-wise, with operator and downtime reasons?05Can it handle alternate materials and by-products in a bill of material?

Stores, purchase and job work06Can it stop material issue to the shop floor without a work order or requisition?07Can it show stock lying with each job worker, by challan, with days pending?08Can it track batch or heat numbers from raw material through to finished goods?09Can it handle expiry dates and issue the earliest-expiring batch first?10Can it use barcodes for goods receipt, issue, stock taking and dispatch?11Can it read weight directly from the weighbridge, so that nobody types it in?

Quality and traceability12Can it record inward, in-process and final inspection against set parameters and limits?13Can it hold rejected or untested stock so that it cannot be issued or dispatched?14Can it print a test certificate with actual readings for each batch dispatched?15For a customer complaint, can it list every batch, machine and supplier lot involved?

Scrap, yield and costing16Can it record scrap, rejection and rework by process, and compare yield with the standard?17Can it show actual cost of each work order against the estimated cost?18Can it include power, labour and overheads in product cost, on a basis you choose?19Can it value work in progress at month end without a manual spreadsheet?

Maintenance and plant20Can it schedule preventive maintenance and alert you when a machine is due?21Can it record breakdowns with downtime, cause and spares used, machine by machine?22Can it track spares, tools and dies with minimum stock levels?

GST, accounts and payroll23Can it generate e-invoices and e-way bills from the dispatch entry, without retyping on the portal?24Can it print GST job work challans and report goods not yet returned by job workers?25Can it deduct TDS and collect TCS where applicable and give data for returns?26Can it calculate EPF and ESI from attendance and produce the monthly upload files?27Is accounting built in, so that purchase, sales and stock post to ledgers automatically?

Owner reports, data and ownership28Can you see production, dispatch, stock and outstanding on your phone each day?29Will the vendor migrate item masters, BOMs, opening stock and ledgers, and state this in writing?30Can you export all your data to a spreadsheet or take a full backup yourself?31Does the proposal state who owns the data and any custom code written for you?32If you leave, will you get your complete data in a usable format?33Is the yearly cost after the first year, including changes and extra users, written down?

Red flags

Walk away if you see these.

The demo shows only purchase, sales and accounts, and production is described as "phase two".
Production is a single entry that converts raw material to finished goods, with no work order or process stages.
Scrap and rejection have no entry of their own, so yield cannot be measured.
Costing is done outside the system in a spreadsheet prepared by the vendor.
The proposal lists modules but gives no plan, dates or named person for implementation.
Nothing is written about data ownership, backups or exit terms.

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FAQ

Questions, answered.

When does a plant need an ERP instead of accounting software?

When you cannot answer simple questions without a spreadsheet: what a product really costs, how much stock is with job workers, which batch went to which customer, or why yield dropped. Accounting software records money. An ERP also records material, machines and process.

Should I buy a ready package or get one customised?

Start with the standard product and note what does not fit. Small gaps can be handled by changing your process. If your core work, such as costing or batch tracking, does not fit, ask for customisation with a fixed scope, cost and date in writing.

How do I compare two vendors fairly with this checklist?

Give both the same checklist and the same sample data, such as one product with its BOM and one job work cycle. Mark what you see on screen, not what is promised. Then compare total cost over three years, not just the first invoice.

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Manufacturing ERP checklist: 33 questions to ask before you buy