ERP for Contract Manufacturers

Shop-2ERP systems for manufacturing companies are different from ERP systems for service companies and others. Contract manufacturing adds to the special demands on ERP systems.

Manufacturing ERP systems include

  • a unique job estimating feature as an aid to making accurate quotes for materials and labor.
  • Manufacturing ERP systems are especially designed to track ongoing costs for labor, materials, and maintenance in close to real time.
  • There are powerful scheduling elements to the manufacturing ERP system to help assure on-time product delivery.
  • Quality control functions help monitor the manufacturing process and involve employees, vendors, and customers.

Contract manufacturing adds features for tracking multiple clients into the ERP system.

  • Revision level tracking features are added.
  • Engineering change orders are tracked.
  • A more complex engineer to order production scheduling capacity allows for a more complex production schedule.
  • A custom configurator is needed to allow for client specific demands.
  • The contract manufacturing ERP includes multi-level serial number traceability system for the full lot.
  • They also include systems for checking the process and issuing certificates of analysis.
  • Many high quality contract manufacturing systems allow for online collaboration as well.

One of the important functions of manufacturing ERP systems is to provide documentation for compliance with Sarbanes-Oxley regulations. These regulations require that periodic financial reports be issued. These reports have to include certifications from corporate signing officers. Most importantly the reports must (to quote the law) be able to certify to

•  A list of all deficiencies in the internal controls and information on any fraud that involves employees who are involved with internal activities

  • Any significant changes in internal controls or related factors that could have a negative impact on the internal controls…”

Any material changes in the corporate financial status or operations have to be reported in a form “easy to understand supported by trend and qualitative information of graphic presentations as appropriate.”

Without sufficient support from a complete ERP and accounting system, many contract manufacturers scramble to comply with Sarbanes-Oxley regulations.

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