Next Level Internal ERP Needs for Electronics Companies

Logistics is about bringing material from where it is to where you want it to be. Sales orders and forecast will create demands for materials to be filled. In the electronics industry the supply for that material often is from another continent. A purchase order will supply the demand. When received, it will be in inventory, available to sell or to use in a production order.

Inventory needs to be under control within your electronics ERP system. How many are on hand? What locations can the inventory be found? What is the value of the inventory? Do we have any obsolete inventory? Product life in electronics is short and this should be a constant concern when considering your electronics ERP solution.

Production Orders & Quality Systems

Production orders are used to control the manufacturing of your products, it stands to reason that these should be tightly controlled within your electronics ERP software. They accumulate costs in work-in-process inventory. Material needed for the production order is issued from inventory to the order. Labor needed is scheduled with an order routing. This shows the variety of steps involved in manufacturing, how much of what kind of labor is needed at each step, what material items are needed at that step, what steps are completed and yet to complete, and a time schedule of when each step should be worked on. When the production order completes, the finished item moves to inventory and is available to ship. The accumulated costs are moved too, and work in process inventory is reduced.

The quality system works with both material and labor. Materials received from a vendor will be checked to a standard as part of receiving. Details about the standard, the test process, and the sample size should be contained in the quality system of your electronics ERP. Production orders also move through quality. There might be in-process testing. The finished production order might be tested before completion and transfer to finished goods inventory. These quality systems will also manage any outbound testing or certifications needed by the customer before the order is shipped. Think about which of these processes occur in your electronics company - shouldn’t they occur within the controllable and monitorable environment that is your ERP system?

All of these next level internal needs of your electronics company should be included in your ERP system. They are all designed to work together. Purchasing can see what materials are needed for a production order next month. Quality can see what materials are expected today that will need inspection. Reports on the performance of the entire system are available from transactions and other data kept in the ERP.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at

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Tom Miller

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