How to Identify a Project-Based ERP System

Most manufacturing, and the ERP systems that support it, are order-oriented. The primary tracking and data management focus is on individual work orders, customer orders or, in the case of flow manufacturing, line schedules. Multiple items and orders are connected only through bill-of-material relationships in planning and scheduling. Activities, schedules, and costs are not connected.

Manufacturers that need to link multiple orders together and consolidate costs and schedules into projects are forced to do so outside of the ERP environment using spreadsheets and custom programs unless they are using an ERP system that is designed for projects.

Project-based ERP is, for the most part, identical to traditional order-based ERP with additional functions to connect multiple orders into project schedules, progress reporting, and cost accumulation. This is accomplished with a supervisory layer of organization that carries the project structure and facilitates the necessary visibility and reporting.

Projects can be defined according to a work breakdown structure (WBS) that captures the overall content and organization of the project as well as the schedule and cost requirements. See

Visualize a Gant chart or PERT chart, where the various phases of the project are arranged in a timeline with dependencies, and where the phases and elements of the project occupy a specific place in the timeline. The supporting activities (purchase orders, work orders, additional costs and activities) are attached to the project elements. As the activities progress, data (activity and costs) is carried into the WBS where status (schedule and cost against plan and budget), expected completion, cost-to-complete, and more are available at any time.

Project-based ERP is traditional ERP with the additional project management and accounting capabilities added. Project-based ERP eliminates the need for spreadsheets and other disconnected or loosely connected project reporting and tracking systems that are inevitably out of sync with real-time manufacturing data and subject to errors and confusion.

If your business is conducted on a project basis, be sure that your ERP system is built for projects with the ability to manage the project timeline through a work breakdown structure and project schedule, as well as the level of reporting and visibility you need to manage the project and provide customers with the information they demand.

Do you have a need to group work orders and tasks on a timeline?