An ERP project at a factory starts with production standards and with the choice of a single area, not with the choice of software. Until you have bills of materials, consumption rates and one clean list of raw materials, the system will only produce neatly formatted wrong numbers. That is why the first weeks go into describing how a product is made and deciding where accounting costs the plant the most.
Key takeaways
Without those standards the system cannot calculate purchasing demand, batch cost or shop-floor load: there is nothing to calculate from. A standard answers the question of how much material, time and how many operations go into one unit, and this is the only data that exists neither in accounting software nor in a CRM.
A trading warehouse only needs goods in and goods out. In manufacturing there is a processing stage between incoming material and the finished shipment: the material changes shape, part of it becomes waste, part returns into production, and costs have to be collected for every batch. If you are still working out how ERP differs from a CRM and from bookkeeping software, start with our plain-language explanation of ERP.
A manufacturing standard covers five things.
Tip Do not wait for perfect standards. The manufacturing subsystem of 1C:ERP Enterprise Management explicitly states readiness to work with imprecise standards: at most plants, rates are refined as work goes on. Start with what your process engineers can confirm today, and plan for revising the rates against actual output.
You launch the area where the gap between the books and reality costs the most. A factory usually has four such areas, and the choice between them is made on money, not on where it is easier to begin.
| Area | Sign that this is where to start | What the first launch gives you |
|---|---|---|
| Raw material warehouse | Spreadsheet stock and shelf stock disagree, batches go missing, purchases are made in a rush and at a higher price | Real stock by batch and storage location, material reserved against an order |
| Production accounting | Output and material write-offs are recorded after the fact, scrap and waste are logged nowhere | Shift tasks, actual output, write-off against the rate and visible deviations |
| Purchasing | A shortage of material becomes known on the day the batch starts | Demand is calculated from the production plan and free stock |
| Product cost | Batch cost is pieced together in a spreadsheet a month late | Costs are collected per batch: materials, labour, energy, scrap |
The sequence of work on the first area is the same whichever one you pick.
Before the discovery stage, collect data on products, materials, warehouses and staff roles: that is exactly what the contractor will ask for. The more items are ready in advance, the shorter the description stage and the fewer changes during development.
A manufacturing system tracks not a product but a batch that changes its composition and properties on the way from raw material to finished goods. Hence different documents, different stock and a different cost calculation.
| Criterion | Trading company | Manufacturing |
|---|---|---|
| Unit of accounting | An item that was bought and sold | A batch that passes processing stages and changes composition |
| Stock | Receipts minus issues | Raw materials, work in progress, semi-finished and finished goods at the same time |
| Cost | Purchase price plus delivery | Materials, labour, energy, scrap and returnable waste for every batch |
| Planning | Buying against demand and current stock | A production plan, and from it material demand and equipment load |
| Documents | Receipt, shipment, transfer | Plus shift tasks, output records, write-offs against rates, scrap records |
This is why a trading configuration cannot simply be tweaked for a plant: it has no notion of a processing stage, and every production step has to be imitated with transfer documents. Testing a system is simple — ask to be shown how it calculates the cost of a batch that has returnable waste.
A manufacturing ERP in Uzbekistan does not work in isolation: it feeds data into state systems and into bookkeeping. That exchange is designed in from day one, otherwise the accountant will key the same data in a second time.
If the owner needs to see output and stock every day, reports from the system are convenient to deliver through a messenger: we described how that works in our piece on 1C reports in Telegram.
An off-the-shelf system pays off when the plant's processing stages, documents and cost calculation are close to what is typical for the industry. Custom development is needed when the key stage has to be broken to fit a standard scheme.
One example of a ready product is 1C:ERP Enterprise Management: it targets medium and large businesses and plants with technically complex multi-stage production, including food and chemicals, machine building and metallurgy. A mixed option also exists: statutory accounting stays in the bookkeeping program, while production and the warehouse run in a custom system that exchanges data with it.
A detailed comparison of project formats and stages is in our guide to ERP implementation. One thing matters here: the choice between a ready and a custom system is made after discovery, not before it.
The price is calculated from the scope of work, not from the cost of a licence. On a manufacturing project six things move the budget.
Our ERP development page lists the lower bounds: connecting the programs you already run starts at $4,000, covering a single area such as the warehouse or production starts at $8,000, and an ERP for the whole company starts at $25,000. After go-live there are server and maintenance costs: technical support of working systems starts at $700 a month.
Manufacturing projects fail in the same ways from plant to plant, and the list is short.
Mistake Launching production accounting before warehouse accounting. While material stock in the system does not match the shelves, write-offs against rates and cost calculation rest on wrong data, and nobody trusts the figures in the reports.
We start with discovery on site: we look at how material arrives, where it is stored, who records output and when, and at which points the figures diverge from reality. Based on that we propose one area for the first launch and describe what will change in people's work, not only in the reports.
If a ready system covers the plant's needs, we implement it and connect it to bookkeeping, banks and state services. If the key processing stage does not fit a standard scheme, we build a custom ERP around your processes and deploy it in a data centre in Uzbekistan or on your own servers. After that we connect the next areas to the same database.
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Tell us what you need, and we will estimate the timeline and cost and suggest a solution.
Work out where accounting costs the plant the most: mixed-up warehouse stock, rush purchases, shop-floor downtime or reworked scrap. The area with the largest losses goes first, and the rest are connected to the same database later.
No, not if the plant has processing stages. A trading configuration has no notion of work in progress or returnable waste, so every step has to be imitated with transfers, and batch cost still ends up being pieced together by hand.
They are compiled together with process engineers during discovery and refined against the first actual batches. Manufacturing systems are designed to work with imprecise standards, so there is no need to wait for perfect rates before starting.
Not necessarily. Statutory accounting can stay in your bookkeeping program while the ERP runs production, the warehouse and purchasing, exchanging reference data and documents with it. The accountant keeps working in a familiar program.
The labelling code appears in production accounting and travels with the batch until shipment, and at the point of sale it is stated in the electronic invoice. If batches live in spreadsheets, the codes have to be matched up manually.
Connecting the programs you already run starts at $4,000, covering a single area such as the warehouse or production starts at $8,000, and a system for the whole company starts at $25,000. The final figure is set after discovery and depends on the number of processing stages, the state of the standards and the integrations.
Someone entitled to change processes: the production director, the chief process engineer or the operations director. If the system administrator is made project owner, accounting decisions are taken by the contractor and the shop floor does not follow them.
Sources
Cover photo: CHARLIE MIN KIM, Pexels
