Picture a furniture factory. Work orders have been tracked on paper for years. The foreman carries the routing knowledge in his head. Material lists are counted by hand in the warehouse. The factory runs an MRP (material requirements planning) program, but that program really only calculates how much raw material to order. Now the owner wants to move to an ERP (enterprise resource planning) system. A consultant arrives, installs the software, and the old habits get copied straight into the new program. A few months later the system is a mess, data is inconsistent, and nobody can explain why. The problem is not the software. The problem is the processes.
The difference between MRP and ERP is not just about software size. MRP answers one question: how much material do we need? ERP tracks the entire production operation — machines, labour, time, cost, and inventory — inside a single system. That difference matters because ERP only works well when every step of the factory floor has been defined inside the program. The knowledge that lives in the foreman’s head must now exist in the system as written data. Skipping that step and moving from one program to another is like copying a messy handwritten ledger into a computer. The result is still a mess, just a more expensive one.
The first task is building an accurate bill of materials. A bill of materials is the list that shows which components, and in what quantities, are needed to make a finished product. In most MRP environments this list is incomplete or out of date. If you manufacture upholstered sofas, the fabric, foam, wooden frame, screws, and adhesive must each be entered separately with the correct quantities. Every missing item will eventually cause a stock shortage or an unexplained surplus. Before going live on ERP, every bill of materials should be reviewed from scratch, sitting down with the production supervisor and checking each line one by one.
The second critical task is defining routings. A routing describes which machines a product passes through, in what sequence, and how long each step takes. In most small factories this information is not written down anywhere. The experienced worker knows it; when he is absent, production slows. In ERP, a routing must be defined for every product. Cutting table, welding station, paint booth, assembly line — each step is entered separately. When processing times are also recorded, the system can calculate which machine is occupied at any given moment. Without routing data, ERP is nothing more than an expensive stock register.
The third task is redesigning the work order flow. In an MRP environment, work orders typically travel on paper — signed, stamped, filed in a folder. In ERP, a work order is opened inside the program. As each production step is completed, it is closed in the system, and the software automatically deducts the consumed materials from stock. That change sounds small but it means a real shift in how the factory floor operates. Who opens a work order, who marks it complete, what happens when there is scrap or a return — all of this must be decided before the software goes live. Without those decisions, every person on the floor will do it differently, and the data will never add up.
The most common mistake in practice is this: a factory moves to ERP and imports its bills of materials and routings directly from the old MRP system. But those records have not been updated in years. Some materials have changed. Some machines are no longer in use. The new system starts with bad data, and within the first week stock discrepancies appear. Everyone says the program does not work. In fact the program is working exactly as designed; it has simply been given wrong information. A computer system cannot produce correct output from incorrect input. That is why data cleanup before go-live is at least as important as installing the software itself.
Any factory manager considering an ERP move should be able to answer three questions clearly before signing a contract. Are the bills of materials current and written down? Do we know the routing steps and processing times for each product? Who is responsible for opening and closing work orders? If the answer to any of these is uncertain, it is wiser to delay the purchase and fix the processes first. A well-built ERP program cannot correct a poorly designed process; it can only make the flaws visible faster. When the processes are ready, however, the system genuinely delivers — giving the factory clear visibility into both production costs and the flow of work on the shop floor.
This article was originally written in Turkish by Gökhan MERCANOĞLU on March 25, 2002 and has been automatically translated into English and other languages using machine translation.