A manufacturer converts materials and hours into finished goods, and the margin on that conversion is decided by dozens of small events — a scrap rate, a machine running long, a component bought at a worse price. Standard cost hides all of them until the quarter closes, by which time the decisions are made.
This post covers what manufacturing ERP needs to actually do. It is the thinking behind our manufacturing industry page.
The problem with standard cost
Standard cost is a budget. Actual cost is what happened on the floor — the scrap, the rework, the machine that ran an hour longer. If those never meet, you are pricing on a guess. The fix is costing that accumulates as it happens, from materials consumed, hours booked and scrap recorded against the order.
Multi-level bills of materials
Sub-assemblies, phantom items, scrap and by-products need to be modelled properly, with cost rolling up through every level. A single-level BOM hides where the margin is actually lost.
Capacity-aware planning
Production plans resolved against real workstation capacity and real material availability — not against optimism. A plan that ignores capacity produces work orders that cannot physically run.
Release only what can be made
A work order should not release unless the materials to finish it exist or are on a confirmed purchase order arriving before the planned start. Checking material and capacity before release is what stops the shop floor from lurching from shortage to shortage.
Quality that gates release
Inspection templates attached to items and operations, with a failed inspection stopping the goods rather than annotating them. Recording quality after the goods have shipped is not quality management; it is a note on a mistake.
How AlpineERP fits
AlpineERP covers the manufacturing depth above, and we configure it against how your business actually runs before you go live. See the manufacturing industry page for the capabilities in full, or how an implementation runs.