Manufacturers need industry-specific ERP modules because they have:
- Complex supplier networks
- Inventory-dependent purchasing
- PO-heavy workflows
- Multiple plants and entities
- Global suppliers
The finance and accounting team also needs to connect production operations with finance.
Manufacturing ERP modules are software components that manage production, inventory, procurement, quality, and planning within a unified ERP system.
This article defines and describes manufacturing ERP modules; explains how ERP modules enhance your manufacturing process and business operations; outlines the best ERP solution modules for manufacturers (including third-party add-on software integrations for procurement and finance automation); and explains when your manufacturing business should begin deploying business process automation.
What are Manufacturing ERP Modules?
Manufacturing ERP modules are optional functional software add-ons beyond core enterprise resource planning software in a manufacturing company. ERP manufacturing modules include functional software that supports production, quality control, procurement and supply chain management, inventory control, accounting/finance, and sales order/fulfillment.
How Do ERP Modules Enhance Your Manufacturing Process?
ERP modules enhance your manufacturing process by adding functionality for production and supporting processes during the accounting, procure-to-pay, warehousing, sales order fulfillment, and cash conversion cycles.
ERP functionality is explicitly connected to the financial workflows around manufacturing. Supplier invoices are tied to:
- POs and goods receipts
- Raw-material and component vendors
- Freight/logistics providers
- Cross-border supplier payments.
Go beyond traditional manufacturing ERP modules.
Tipalti finance automation software integrates with your ERP system to add streamlined solutions for efficient paperless invoice processing, payouts, and global payments, and automated global regulatory compliance.
Table: Key Manufacturing ERP System Modules
| ERP Module | Purpose | Primary Users |
|---|---|---|
| Bill of Materials | Hierarchical parts for finished goods by subassembly | R&D, Procurement, Production, Warehouse, QC, Accounting |
| Master Production Schedule (MPS) | Production needs and timing based on sales demand | Production Planning, Production |
| Material Requirements Planning (MRP) | Uses MPS, BOMs, inventory, and R&D to order parts | Procurement, R&D, Warehouse, Production, Accounting |
| Shop Floor Control | IoT system with sensors and real-time notifications | Production, Quality Control, Engineering |
| Quality Control | Inspects products received, manufactured, and returned | QC, Receiving, Production, Testing, Engineering, RMA, Procurement |
| Project Management | Project planning, costing, budgeting, billing, and control | Project Management, R&D, Procurement, Production, Accounting |
Common Manufacturing ERP Systems
Manufacturing companies use these ERP systems (and more):
- NetSuite
- SAP Business One
- Microsoft Dynamics 365 Business Central
- Acumatica
- SAP S/4HANA
- Infor SyteLine
- Sage 300
- Epicor
Core vs. Optional Manufacturing Modules
Most ERP systems include core modules for finance, inventory, purchasing, and sales, as well as optional manufacturing modules such as MRP, MES, Quality, PLM, and Maintenance.
Which Manufacturing ERP Modules Do You Need?
The manufacturing ERP modules your business needs depend on these factors:
- Small/growing manufacturer or larger, established manufacturing company?
- Multi-location manufacturer?
- Global manufacturer/distributor?
Select manufacturing ERP modules based on manufacturing maturity and operational complexity, not just based on company size. For example, needs differ for a small manufacturer, a growing manufacturer, or an enterprise manufacturing company with increasingly complex manufacturing operations and global locations.
As it grows, a small manufacturing company needs a scalable system that can support additional ERP modules or features as needs arise. A multi-location, global manufacturer or distributor needs capabilities to handle this operational complexity.
Beyond adding ERP modules, consider using AP automation and advanced FX products as ERP integrations to efficiently pay global suppliers in local currencies and get cost-effective currency conversion with AP hedging.
Complex manufacturing processes may increase the need for more advanced ERP modules, including shop-floor controls and a comprehensive manufacturing execution system (MES).
How Requirements Differ
The manufacturing process your business uses and its industry may require different ERP system features. Consider the following system distinctions by manufacturing process type and industry.
- Discrete manufacturing: BOM, MRP, production scheduling, work orders, serial/lot tracking.
- Process manufacturing: formulas/recipes, batch/lot control, quality, traceability, regulatory workflows.
- Food & beverage: lot traceability, expiry/shelf-life, supplier quality, recalls, landed cost.
- Wholesale distribution: WMS, inventory, purchasing, fulfillment, drop shipping, landed cost.
The Best ERP Modules for Manufacturing
The following list covers the best ERP modules for optimizing operations in manufacturing companies. Some of these manufacturing ERP modules are for industry-specific manufacturing operations, whereas others are for general business management of your manufacturing company.
Consult the software providers to find the right ERP and add-on modules. Your manufacturing business can generally either add modules initially upon ERP implementation or later as business needs arise. Ask your ERP company whether decisions on using any modules must be made up front.
1. Production ERP modules
Production ERP modules include product manufacturing modules such as Bill of Materials, Master Production Schedule (MPS), Material Requirements Planning (MRP), Shop Floor Control, and Quality Control. Some manufacturers may also use a Project Management module.
2. Bill of Materials (BOM) Module
The Bill of Materials (BOM) manufacturing module of ERP software builds a parts hierarchy by subassembly, constituting each top-level finished-goods product. A BOM includes the part number and quantity of raw materials for each work-in-process level used to manufacture each type of finished product.
The BOM is used to order inventory through procurement, plan material requirements using MRP modules, and accumulate actual or standard costs as inventory, and eventually cost of goods sold (COGS) when products are sold to customers.
3. Master Production Schedule and Material Requirements Planning Modules
Manufacturing companies use a master production schedule (MPS) module to determine production needs based on forecasted sales demand and sales & service orders.
The material requirements planning system (MRP) module uses the master production schedule as input. It considers current inventory levels of raw material parts and other planned uses of inventory, such as R&D, to determine ordering and issue inventory to production using the specific products’ Bills of Materials.
4. Shop Floor Control Module
Manufacturers can save money by detecting production process errors that could require rework and generate scrap if not detected quickly enough. Using Industry 4.0 / IoT sensors and a real-time notification system for production management discrepancies is a key benefit of a modern shop-floor control manufacturing ERP module.
5. Quality Control Module
The Quality Control ERP manufacturing module should include a range of features to ensure that products meet your company’s manufacturing standards and that exceptions are detected promptly.
In manufacturing ERP systems, quality control can be performed:
- In the inventory-receiving process
- Immediately after procurement
- During and upon completion of the manufacturing process
- Before shipping goods to customers
- When customers return goods they purchased with an RMA (return merchandise authorization).
Quality Control features within a manufacturing module in ERP may include:
- Inspections with checklists
- Calibration
- Testing
- Exceptions Workflow
- Non-conformance (NC)
- Corrective and preventative actions (CAPA)
- Root cause analysis
- Traceability forward and backward
- Certificate of analysis
- Quality data collection and compilation
- Vendor performance analysis
- Recalls
6. Procurement and Supply Chain Management Software Modules
Manufacturing companies purchase inventory parts through the procurement department, using approved purchase requisitions (PRs) from intended users and purchase orders (POs) sent to vendors or suppliers to create a contract upon acceptance.
The Purchasing or Procurement module of an ERP system includes purchase orders and basic procurement management functionality. To improve ERP for procurement, procurement automation can be added and integrated with the ERP system to digitize vendor and document management and purchasing processes and increase efficiency.
Ensure capabilities for any supply-chain, manufacturing-specific scenarios to eliminate potential manufacturing industry pain points.
Supply chain capabilities to consider for your ERP and its extensions include:
- Raw materials/components
- Contract manufacturers/OEMs
- Freight and 3PL (third-party logistics) providers
- Partial receipts
- PO matching
- Supplier lead-time changes
7. Inventory and Warehouse Management Modules
Your manufacturing company needs to track and control inventory by type, part number, and warehouse location. For proper inventory control, your manufacturing business must record inventory receipts and inventory by stage, such as raw materials, work in process, and finished goods. The issuance of parts to production is handled by the accounting and bill-of-materials module system, as well as by the pick system in production and warehouse management.
Record inventory through the accounting module, conduct annual physical and periodic cycle counts, and reconcile physical and book inventories. For traceability, your business may require tracking of serial and lot numbers.
Features your manufacturing/distribution business may require include:
Lotted inventory: tracked from receipt or production through shipment with a unique number throughout its life cycle.
Bins: Inventory tracked by an ERP system to control inventory in stock, using an identifying number tied to its physical location.
Landed cost: the cost of an item that includes its purchase price and all other costs incurred through reaching its final destination.
Additional costs (in landed cost) besides purchase price typically include:
- Storage
- Insurance
- Handling fees
- Currency conversion and payment processing
- Transportation
- Customs and duties
Drop shipping: an e-Commerce strategy for having the supplier directly pack and ship orders to customers.
8. Sales Order Management, CRM, and Fulfillment Modules
Customer orders are generated in a sales order module. Manufacturing ERP module functionality includes sales pricing and order fulfillment through packaging and shipment from the finished goods warehouse location to the customer. Your company will most likely include ERP integration with a CRM (customer relationship management system) from Salesforce or your ERP/CRM provider.
9. E-commerce Module
If your manufacturing company also has online stores to sell merchandise and services, it may need an e-commerce ERP module.
10. Business Intelligence Modules
Manufacturing ERP modules for business intelligence to aid decision-making may be available for your ERP system, and the core ERP system may include business intelligence.
11. Global, Multi-currency, and Multi-entity Modules
ERP systems, such as NetSuite, may have a dedicated module for more complex global businesses. For example, some manufacturing companies use the NetSuite OneWorld module as an essential ERP for manufacturing.
12. Human Resources and Payroll Modules
Like other companies, manufacturing companies need Human Resources ERP modules. Larger manufacturing companies can consider using Payroll modules, although smaller companies may outsource payroll disbursements and management to a third-party service provider like ADP.
13. Accounting and Financial Management ERP Modules
The core ERP system includes a basic accounting module for recording transactions and managing cash, accounts receivable, accounts payable, and other balances. The best ERP systems for manufacturing companies are cloud-based. They provide real-time visibility into financial results with reports, dashboards, business intelligence, and drill-downs for analysis.
Additional ERP modules support forecasting, financial planning, budgeting, and advanced cash management. Manufacturers need a strong inventory system that records inventory at standard or actual cost, with variance analysis for manufacturing processes, including material, labor, and overhead variances relative to standard costing expectations. The accounting system records actual expenditures against budgeted amounts, with variance computations for each master expense account in its chart of accounts.
Manufacturing finance problems that ERP alone may not fully solve are:
- High supplier invoice volume
- PO/receipt matching
- Global supplier payments
- Entity-level AP
- Payment reconciliation
- Spend visibility
- Supplier onboarding
For a fine-tuned, advanced, and efficient system with strong financial controls, integrate third-party add-on modules for finance automation with your manufacturing company’s ERP system.
14. Third-party Add-on Manufacturing ERP Modules
Third-party automation of business processes through ERP integrations includes Procurement automation, AP automation, and advanced FX add-ons (Multi-FX and FX Hedging) for foreign exchange and accounts payable invoice hedging that combine with AP automation software.
Tipalti software provides a unified platform that integrates with your accounting or manufacturing ERP software. Tipalti software integrates with various ERP systems, including cloud, on-premises, and hybrid deployments. Scalable Tipalti finance automation software provides multi-industry solutions, including serving manufacturing and wholesale distributors.
Procurement Automation Add-on Integration
Tipalti Procurement automation software lets users create purchase requisitions through the system as intake, automatically gets electronic approvals (or denials) with a click by the approver, and automatically creates purchase orders from these approved purchase requisitions. It also helps your manufacturing company control business spend.
AP Automation Add-On Integration
Cloud-based Tipalti AP automation provides enterprise-grade security recognized as best-in-class by the AICPA’s SOC (System and Organization Controls) for Certified Public Accountants. Tipalti strengthens financial controls.
Tipalti AP automation handles these end-to-end accounts payable processes:
- Supplier management, with onboarding, validation, and payment status
- Invoice processing, consisting of:
- Invoice verification
- 3-way (or 2-way) line-item PO matching and receiving data matching for purchased goods received
- Fraud, error, and duplicate invoice detection prior to payment
- Automated general ledger coding using AI
- Routing for approval, with communications
- Global payments via EFTs
- Real-time batch payment reconciliation with the general ledger
- Automated global regulatory compliance
- Real-time spend analysis, cash requirements, and accounts payable visibility by entity, including using Ask Tipalti AISM queries and custom AI-generated reports
Newer Manufacturing Technologies and Modules
Good addition, but distinguish actual ERP/manufacturing capabilities from adjacent technologies. AI forecasting, predictive maintenance, digital twins, MES/IoT etc. are helpful, but this section can easily become generic Industry 4.0 content. Keep it concise and connect each item back to ERP data/workflows
Modern manufacturing ERP systems offer these newer technologies and modules.
Production Scheduling Optimization
Advanced production scheduling optimization software uses algorithms and rules to schedule manufacturing tasks, accounting for accurate factory capacity limits, inventory levels, and worker capabilities. This capability streamlines workflows and reduces the need for manual calculations.
PSO software often provides scenario-simulation capabilities for machine breakdowns and other factors affecting production rates, enabling optimal production scheduling in such cases.
Supplier Collaboration
Modern ERP systems and third-party add-ons include a Supplier Portal for sharing documents and collaborating between companies buying products and their suppliers.
Collaboration functionality includes:
- Viewing orders
- Accepting POs
- Updating delivery dates
- Supplier invoicing
- Payment status.
Sustainability Reporting
Companies interested in monitoring sustainability (environmental, social, and economic pillars) can use software that provides reporting for disclosures and sustainability management. This functionality may help manufacturing companies make this specialized type of reporting more efficient.
Other types of newer technology applications include:
AI Forecasting
AI forecasting for manufacturing companies improves forecasting accuracy by using market trends, real-time supply chain data, inventory levels, and historical sales data.
Predictive Maintenance
A Computerized Maintenance Management System (CMMS) uses sensors to monitor manufacturing equipment in real time and enable predictive maintenance, thereby minimizing potential breakdowns that would disrupt production.
In addition to monitoring machine temperature, pressure, and vibration, predictive maintenance automates inspection and service routing through automated repair tickets.
Digital Twins
A digital twin is a real-time virtual version of a physical factory shop floor that receives sensor data and syncs with the ERP to automatically adjust production scheduling, inventory requirements, and delivery schedules.
Why Manufacturers Add Finance Automation to ERP
Manufacturers often rely on their ERP for production, inventory, and financial records, then add finance automation to handle high-volume supplier onboarding, PO-heavy AP invoice processing, approvals, cross-border, global supplier payments, reconciliation, and multi-entity AP.
Core use cases for manufacturers include automating Accounts Payable are:
- Global supply-chain AP
- Numerous global supplier payments
- Contract manufacturing
- 3PL logistics payments
- Multi-entity consolidation
ERP-dependent gaps that AP automation can help fill include:
- Drop shipping
- Landed cost
- Lotted inventory
- Prepayments
- PO nuances
Tipalti AP automation provides scalable, end-to-end accounts payable management from onboarding and invoice capture through global payment reconciliation, AI-driven business spend analytics, and tax compliance preparation reports.
Modern ERP systems provide multi-entity capabilities and real-time information. If your ERP system provides these capabilities, integrated Tipalti automation software provides multi-instance and multi-entity functionality for global companies, with real-time visibility for accounts payable and spend by entity, with combined views.
Tipalti invoice processing automatically detects errors with thousands of automated payment rules and fraud with Tipalti Detect®.
Signs Your Business is Ready to Automate
Manufacturing companies seek AP automation when they have:
- Invoice volume outgrowing AP capacity
- Multiple plants/entities
- Increasing international suppliers
- Fragmented supplier onboarding
- Manual PO matching
- Late/duplicate payments
- Reconciliation delays
- Expansion into additional ERPs/entities
Businesses automate when they pursue digital transformation to:
- Eliminate paper and manual processes
- Streamline workflows
- Complete routine tasks faster
Companies need a scalable system with additional controls to reduce fraud risks and human errors. Manufacturers want more real-time spend visibility to control costs. They may lack time to work on strategic initiatives that would improve business results.
Choosing the Right Manufacturing ERP Modules
Manufacturers should start with core operational modules, expand functionality as complexity grows, and add finance automation to eliminate manual processes and improve scalability.
Manufacturing ERP modules include BOM (bills of materials), MRP (material requirements planning), MPS (master production schedule), and Shop Floor Control. But ERP modules for manufacturing industry purposes aren’t limited to production planning and scheduling, materials inventory, and manufacturing process modules in an MRP system.
Tipalti AP automation extends your ERP to streamline payables processes, including supplier onboarding, invoice processing, global payments, tax compliance, and reconciliation. The ERP remains the system of record, while integrated automation can handle operational AP and supplier-payment workflows around it. Download AP and ERP: How to Close the Execution Gap to learn how finance teams can bridge gaps between their ERP and AP processes, reduce risk, and uncover strategic opportunities.
Manufacturing ERP Modules FAQs
What is the difference between a manufacturing ERP module and a standalone Manufacturing Execution System (MES)?
A manufacturing ERP module extends the core ERP system to support production functions. A standalone Manufacturing Execution System (MES) uses sensors and integrates RFID to track production processes and inventory, providing real-time status and exception reporting.
Which manufacturing ERP modules should a small or mid-sized manufacturer implement first?
A small business should start with inventory control. A mid-sized manufacturer should have enough budget to implement inventory management, BOM (bill of materials), MRP (material requirements planning), and MPS (master production scheduling) concurrently.
How do manufacturing ERP modules support Industry 4.0 and IoT integration?
Manufacturing ERP modules use real-time shop-floor Industry 4.0 and IoT (sensor) data to monitor and schedule production, machine maintenance, and quality control, including machine capacity, throughput, status, and quality defect notifications.
What are the core manufacturing ERP modules?
Core manufacturing ERP modules are:
• Material Requirements Planning (MRP)
• Bill of Materials (BOM)
• Master Production Schedule (MPS)
• Shop Floor Management
• Inventory and Warehouse Management
• Procurement and Supply Chain
• Financial Management
What is the difference between ERP and MRP modules?
The difference between ERP and MRP modules is that ERP modules support all business functionality, whereas MRP modules support manufacturing processes, including Material Requirements Planning.
