From Excel to Manufacturing ERP: Stock, Production and Approval Workflows

For many manufacturers, the problem is not that they have no data.

The problem is that the data is everywhere.

One Excel sheet contains raw materials. Another contains purchases. Someone keeps production numbers on paper. Finance has a different cost calculation. Sales asks the production manager for a price. The warehouse has its own stock count.

Then one simple customer question becomes difficult:

“How much will it cost us to produce this order, and what price should we give the customer?”

A properly designed manufacturing ERP should make that answer easier.

It should help the business know:

• what material is currently available,
• which warehouse contains it,
• what was purchased,
• what entered production,
• what was consumed,
• what was produced,
• what was delivered,
• what the real production cost is,
• what margin should be added,
• who approved each important step,
• and where a difference or mistake occurred.

This guide explains one practical manufacturing workflow based on the type of custom ERP system we have developed for manufacturing operations.

1. The Main Problem With Managing Manufacturing Through Excel

Excel is useful.

The problem starts when the whole company depends on separate Excel files managed by different people.

Imagine a manufacturer has:

• Warehouse Excel
• Purchase Excel
• Production Excel
• Sales Excel
• Expense Excel
• Customer quotation Excel
• Finance Excel

Each department may be correct individually.

But the information may not agree.

For example:

The warehouse says there are 1,000 kg of Material A.

Production says it used 300 kg.

Finance only recorded 250 kg.

Another 100 kg was transferred to another warehouse but was not updated.

The owner now sees four different numbers.

That is where an ERP becomes useful.

The purpose is not simply to replace Excel with another complicated application.

The purpose is to create one working process.

2. A Simple Manufacturing Workflow

A useful manufacturing ERP can follow a process like this:

Purchase → Receive Stock → Store Material → Production Request → Material Issue → Production → Finished Product → Sale → Delivery

Every movement should leave a record.

For example:

A company purchases:

• 500 kg Material A
• 250 kg Material B
• 100 kg Material C

The warehouse receives them.

The system increases available stock automatically.

Production later requests materials.

When those materials are issued to production, warehouse stock decreases.

When production finishes, the finished-product quantity increases.

When finished products are delivered to a client, finished-product stock decreases again.

Instead of asking five people what happened, management can see the movement in one place.

3. Know Exactly What Is Inside Each Warehouse

One of the most important parts of manufacturing ERP is stock visibility.

Management should be able to open the system and answer:

What do we currently have?

Not approximately.

Not based on last month's spreadsheet.

The ERP should show:

• Item name
• Current quantity
• Unit
• Warehouse
• Incoming quantity
• Outgoing quantity
• Reserved quantity
• Available quantity
• Minimum stock level
• Latest purchase cost
• Stock value

For example:

This gives management a much clearer picture.

4. Multiple Warehouses Should Be Visible Separately

Many companies do not have only one storage location.

They may have:

• Main warehouse
• Raw-material warehouse
• Production warehouse
• Finished-goods warehouse
• Branch warehouse
• Temporary storage area

The system should show what exists in each one.

For example:

Material A may have:

• 800 kg in the Main Warehouse
• 200 kg in Production
• 150 kg in Branch 1

Total:

1,150 kg

But knowing only the total is not enough.

The company also needs to know where the material is physically located.

This reduces unnecessary purchasing and helps prevent stock confusion.

5. Every Stock Movement Should Have a Reason

Stock should not simply increase or decrease.

The business should know why it changed.

Typical movements include:

• Purchase received
• Material sent to production
• Material returned from production
• Warehouse-to-warehouse transfer
• Finished product received
• Product delivered to customer
• Damaged material
• Expired material
• Sample issued
• Manual correction
• Customer return

For each movement, the system should record:

• Item
• Quantity
• From where
• To where
• Reason
• Date
• Person responsible
• Approval status
• Reference document

This makes stock easier to investigate later.

6. Production Should Start From a Clear Recipe or Bill of Materials

A very useful manufacturing feature is the Bill of Materials, commonly called BOM.

You do not need to think about the technical name.

In simple terms, it means:

What materials do we need to produce one product?

Suppose your company produces Product X.

To produce one unit, you may need:

The ERP stores this production formula.

Then the company can immediately calculate how much material is required for:

• 1 unit
• 10 units
• 100 units
• 1,000 units

This becomes especially useful before starting production.

7. The BOM Mixer Can Calculate Product Cost Automatically

This is one of the most useful parts for manufacturers.

Instead of calculating the cost manually each time, the company can add the required inputs to a BOM mixer.

The system then calculates the production cost.

For example:

Product X

Material A:

10 kg × 120 ETB = 1,200 ETB

Material B:

5 kg × 80 ETB = 400 ETB

Packaging:

1 × 50 ETB = 50 ETB

Additional production cost:

150 ETB

Total estimated production cost:

1,800 ETB

The business now immediately knows approximately what it will cost to make the product.

8. What Happens When Raw-Material Prices Change?

This is where the system becomes much more useful than a static Excel sheet.

Suppose Material A previously cost:

120 ETB/kg

Next month it becomes:

145 ETB/kg

Your product cost changes automatically based on the updated input price.

You do not need to rebuild the entire calculation.

The BOM already knows how much Material A is required.

The ERP can recalculate:

Old cost → New material cost → New production cost → Suggested selling price

This is extremely important in markets where input prices change frequently.

9. Add Your Margin and Know the Selling Price

Knowing cost is only the first step.

The company also needs to decide:

How much profit should we add?

Suppose the total product cost is:

10,000 ETB

Management decides to add a:

20% margin

The ERP can show the proposed selling price immediately.

The user should be able to test different margins:

• 10%
• 15%
• 20%
• 25%
• custom percentage

This helps sales and management understand how pricing decisions affect profitability.

10. Prepare Client Pricing Without Filling Everything Again

This is especially useful when a customer asks for a quotation.

Instead of starting a new Excel calculation every time, sales can select the product.

The system already knows:

• required materials,
• latest costs,
• estimated production cost,
• additional expenses,
• and expected margin.

The salesperson can enter:

Required quantity: 500 units

The ERP calculates the estimated cost.

Then the salesperson can apply the approved margin and prepare a quotation.

This makes quoting much faster.

11. Use the Same Calculation When Preparing a Bid

The same idea is useful when manufacturers participate in tenders or bidding.

Before placing a bid, management needs to know:

• expected material cost,
• production cost,
• transport cost,
• additional expenses,
• tax considerations,
• required margin,
• and the minimum acceptable selling price.

Without this visibility, companies can make one of two mistakes:

Bid too high and lose the opportunity.

Or:

Bid too low and win a project that later becomes unprofitable.

A manufacturing ERP helps management calculate the expected cost before deciding the final bid price.

12. Create Different Pricing Scenarios

The system can also help answer questions such as:

What if material cost increases by 10%?

What if the customer orders 10,000 units?

What if we reduce our margin from 25% to 15%?

What if transport costs increase?

Instead of manually rebuilding a spreadsheet, management can test different scenarios.

For example:

This is especially useful for quotations and tender decisions.

13. Production Requests Should Check Available Stock

Imagine production wants to make:

1,000 units of Product X

The ERP already knows how much material is required.

It can compare:

Material required

against

Material available

For example:

The business immediately sees that Material B is insufficient.

Purchasing can act before production stops.

14. Material Should Be Issued to Production Properly

A common problem is material leaving the warehouse without proper records.

The ERP should create a clear movement.

For example:

Production requests:

500 kg Material A

The warehouse approves and issues it.

Then the system records:

Main Warehouse → Production

The quantity automatically decreases from the main warehouse.

This makes the physical stock and system stock easier to reconcile.

15. Record What Production Actually Used

The expected consumption and actual consumption may be different.

Suppose the BOM expects:

500 kg

But production actually uses:

530 kg

The ERP should show the difference:

Expected: 500 kg

Actual: 530 kg

Difference: +30 kg

Management can then investigate.

Possible reasons could include:

• Waste
• Machine setup
• Damaged material
• Incorrect production formula
• Measurement differences
• Process inefficiency

The system does not need to automatically blame anyone.

It simply makes the difference visible.

16. Record Waste and Production Loss Separately

Manufacturing rarely produces perfect numbers.

There may be:

• waste,
• scrap,
• damaged products,
• rejected units,
• rework,
• leftover material.

These should not disappear from the records.

For example:

Production target:

1,000 units

Actual good units:

960

Rejected:

20

Damaged:

10

Work in progress:

10

Management should be able to see why the final quantity is different.

17. Finished Products Should Return to Stock

Once production is completed, the finished goods should enter the appropriate warehouse.

For example:

Production completed:

950 units of Product X

The system should add:

950 units → Finished Goods Warehouse

Now sales knows what is actually available for delivery.

18. Sales Should Know What Can Actually Be Delivered

A salesperson should not promise quantities that the warehouse cannot provide.

Before confirming an order, the system can show:

• Available finished goods
• Reserved quantity
• Pending production
• Customer orders
• Expected completion

For example:

Customer requests:

1,000 units

Available:

650

Production completing tomorrow:

400

The sales team can make a better delivery commitment.

19. Track Product Leaving the Warehouse

When goods are delivered to a customer, the ERP should record:

• Customer
• Product
• Quantity
• Warehouse
• Delivery reference
• Date
• Person releasing stock
• Person receiving
• Sales order or invoice

The finished-product quantity then decreases automatically.

Management can answer:

What left the warehouse?

Who received it?

Which customer was it for?

20. Add Role-Based Approvals

Not every employee should be allowed to change everything.

A practical workflow may look like this:

Storekeeper

Can:

• receive items,
• prepare transfers,
• record stock movements.

Cannot approve major adjustments.

Production Manager

Can:

• request materials,
• create production orders,
• record completed production.

Purchasing

Can:

• prepare purchases,
• manage suppliers,
• record incoming orders.

Finance

Can:

• review cost,
• approve certain expenses,
• check financial impact.

Sales

Can:

• create customer quotations,
• check finished stock,
• submit pricing requests.

Management

Can:

• approve important transactions,
• review profitability,
• review exceptions,
• see complete reports.

This helps protect important company information.

21. Approval Does Not Need to Slow the Business

Approval should only exist where it adds control.

For example, a company might require approval when:

• Purchase exceeds 100,000 ETB
• Stock adjustment exceeds 5%
• Discount exceeds 10%
• Margin falls below an approved level
• Material is written off
• A large warehouse transfer is made

Normal daily activity can continue without unnecessary approval.

The workflow should match how the actual company works.

22. Use Exception Reports Instead of Reading Every Transaction

Owners usually do not have time to review every movement.

A better ERP should show unusual situations.

For example:

Low Stock

Materials below the minimum level.

Negative Stock

Items showing impossible stock values.

High Material Consumption

Actual use higher than expected BOM usage.

Production Loss

Production output significantly below expected quantity.

Slow-Moving Stock

Material sitting in the warehouse for too long.

Large Stock Adjustment

Someone changed stock unusually.

Low-Margin Quotation

Sales created a price below the approved margin.

These reports allow management to focus on the areas that need attention.

23. Know the Cost Before Saying Yes to a Customer

This is one of the biggest practical benefits.

Imagine a customer calls and asks:

“Can you produce 20,000 units, and what will it cost?”

Without a connected system, sales may need to call:

• warehouse,
• purchasing,
• production,
• finance,
• management.

With the ERP, the company can already see:

• available material,
• missing material,
• current input cost,
• estimated production cost,
• expected completion,
• required margin,
• and recommended price.

The final price can still require management approval.

But the information needed to make the decision is already available.

24. Avoid Selling Below Your Real Cost

This is especially important when raw-material prices are changing.

Suppose your old calculation says a product costs:

900 ETB

But because of updated material prices, the actual cost is now:

1,080 ETB

If the sales team continues selling at:

1,000 ETB

the company may appear to be making sales while actually losing money.

A connected BOM and purchasing-cost system reduces this risk.

25. Know Why the Product Became More Expensive

Management should also be able to see the reason for a cost increase.

For example:

Last month Product X cost:

850 ETB

This month:

975 ETB

The system can show that the increase came from:

• Material A: +70 ETB
• Packaging: +20 ETB
• Transport: +15 ETB
• Other production cost: +20 ETB

This gives management better information before changing customer prices.

26. Purchase Planning Becomes Easier

If production plans to make:

10,000 units

the ERP can calculate total material requirements.

Then it compares them against existing stock.

For example:

Purchasing now has a clear requirement.

27. Management Dashboard

A useful manufacturing dashboard should answer important business questions quickly.

For example:

Today

• Current production
• Orders waiting for production
• Low-stock materials
• Completed products
• Pending deliveries

This Month

• Purchase value
• Production value
• Sales
• Material consumption
• Waste
• Estimated margin

Attention Required

• Stock shortage
• Pending approval
• Cost increase
• Delayed production
• Low-margin quotation
• Unusual stock movement

The objective is not to fill the dashboard with graphs.

The objective is to help management make decisions.

28. A Realistic Example Workflow

Here is a simplified manufacturing flow.

A customer requests:

5,000 units of Product A.

Step 1 — Sales Checks the Product

The salesperson selects Product A.

The system already knows its production inputs.

Step 2 — ERP Calculates Required Material

For 5,000 units, the system calculates the required raw materials.

Step 3 — ERP Checks Warehouse Stock

The system compares required quantities with available stock.

Step 4 — Missing Material Is Identified

If anything is missing, purchasing receives the requirement.

Step 5 — Current Costs Are Used

The system uses the latest available input costs.

Step 6 — Production Cost Is Calculated

Material + production-related cost produces an estimated unit cost.

Step 7 — Margin Is Added

Sales or management selects the approved margin.

Step 8 — Customer Pricing Is Prepared

The company now has a pricing basis without rebuilding the entire calculation manually.

Step 9 — Production Starts

Materials are issued from the warehouse.

Step 10 — Actual Usage Is Recorded

Production records the actual material consumed.

Step 11 — Finished Goods Enter Stock

Completed products are transferred into the finished-goods warehouse.

Step 12 — Goods Are Delivered

Products leave the warehouse against the customer's order.

Now the company has one connected record from customer request to final delivery.

29. What This Replaces

Before ERP, a company may depend on:

• Stock Excel
• Production Excel
• Purchase Excel
• Price-calculation Excel
• Quotation Excel
• Delivery Excel
• Manual signatures
• WhatsApp confirmations
• Paper warehouse records

After ERP, those activities can be connected into one controlled workflow.

Excel can still be used for analysis and export.

It simply stops being the only place where the company knows what is happening.

30. What Should Not Be Automated Blindly

Every manufacturer works differently.

The objective should not be:

“Install ERP and force the company to follow the software.”

A better approach is:

Understand the company's real working process, then configure or develop the ERP around the important parts of that process.

For example, two manufacturers may calculate product cost differently.

One may include:

• Raw materials
• Packaging
• Direct labor

Another may include:

• Raw materials
• Packaging
• Electricity
• Machine time
• Transport
• Labor
• Waste percentage

The ERP should reflect the actual costing method agreed by the company.

31. Start With One Production Workflow

A manufacturer does not need to automate everything on the first day.

Start with one real product.

Map:

Supplier → Purchase → Warehouse → Production → Finished Goods → Customer

Then answer:

1. What material enters the company?
2. Who receives it?
3. Where is it stored?
4. Who requests it?
5. Who approves the request?
6. How is it used in production?
7. What product comes out?
8. Where is the finished product stored?
9. Who sells it?
10. How is it delivered?
11. How is cost calculated?
12. Where can mistakes happen?

That single workflow can reveal most of the important ERP requirements.

Manufacturing ERP Process-Mapping Worksheet

You can use the following worksheet before implementing an ERP.

Product

Product name:

____________________________________

Unit:

____________________________________

Average monthly production:

____________________________________

Raw Materials

Main inputs:

1. ________________________________
2. ________________________________
3. ________________________________
4. ________________________________
5. ________________________________

Where are they stored?

____________________________________

Who is responsible for receiving them?

____________________________________

Production Formula

How much of each material is required?

Cost Calculation

Do you currently calculate:

• Raw-material cost: Yes / No
• Packaging: Yes / No
• Labor: Yes / No
• Transport: Yes / No
• Electricity: Yes / No
• Waste: Yes / No
• Machine cost: Yes / No
• Other expenses: Yes / No

Current target margin:

____________ %

Who approves the selling price?

____________________________________

Warehouse

Number of warehouses:

____________

Can management currently know today's exact stock?

Yes / No

Can you see stock separately by warehouse?

Yes / No

Do you track transfers between warehouses?

Yes / No

Production

Who requests material?

____________________________________

Who approves it?

____________________________________

Do you record expected material consumption?

Yes / No

Do you record actual material consumption?

Yes / No

Do you record waste?

Yes / No

Finished Goods

Where are finished products stored?

____________________________________

Can sales see available finished stock?

Yes / No

Can sales see reserved stock?

Yes / No

Quotations

How do you currently calculate quotations?

____________________________________

How long does it normally take?

____________________________________

Do you recalculate the price when input prices change?

Yes / No

Management

Which three problems should management see immediately?

1. ________________________________
2. ________________________________
3. ________________________________

What a Manufacturing ERP Should Give Management

A useful ERP should make these questions easier to answer:

What do we have?

Where is it?

What are we producing?

What material will production need?

What did production actually consume?

How much did this product really cost?

What selling price gives us the margin we want?

Can we confidently quote this customer?

Can we submit this bid without guessing our cost?

What products are ready for delivery?

What unusual activity needs management attention?

If the system cannot make these questions easier to answer, adding more features will not necessarily make it better.

From Spreadsheet Management to Operational Control

The biggest value of manufacturing ERP is not having more screens.

It is connecting the decisions that already happen every day.

Purchase affects stock.

Stock affects production.

Production affects cost.

Cost affects quotation.

Quotation affects sales.

Sales affects delivery.

And all of them affect profitability.

When these areas are disconnected, managers spend time collecting information.

When they are connected properly, the company can spend more time making decisions.

At DreamTech, our approach to manufacturing ERP is to first understand the company's actual workflow and then build the system around the processes the business needs to control.

That can include:

• purchasing,
• warehouses,
• stock movement,
• production,
• BOM and product costing,
• quotation preparation,
• margin calculation,
• approval workflows,
• finished-goods management,
• sales,
• delivery,
• expenses,
• dashboards,
• and management reports.

The objective is not to make manufacturing more technical.

The objective is to make daily operations easier to understand and control.

Planning a Manufacturing ERP?

Before choosing software, start by mapping one real production process.

Choose one product and document:

what comes in → what happens during production → what comes out → how the cost is calculated → how the customer price is decided.

That workflow usually tells you far more about the ERP you need than a long generic software feature list.

Related resources

• Manufacturing ERP Solutions
• Custom ERP Development
• ERP Implementation Services
• Manufacturing ERP Project Case Study