Manufacturing ERP: Inventory-Centric Control for Raw Materials, WIP, Yields & Finished Goods

Manufacturing ERP

Manufacturing is an inventory problem before it is a production problem. The businesses that scale are the ones that can control
raw materials, work in progress (WIP), yields and rejects, unit costs, and the
flow of components and finished goods across warehouses and plants.
Stok.ly is an inventory-centric cloud ERP designed for inventory-led operations across retail, wholesale, warehousing and manufacturing—supported by built-in AI planning.

Raw materials + finished goods
WIP and manufacturing orders
Material forecasting (MRP-style)
Offsite manufacturing transfers
Yields and reject rates
Actual unit cost at receipt
Quick takeaway

Manufacturing ERP fails when production is disconnected from inventory reality. If you cannot forecast raw materials, control transfers to subcontractors,
capture yields/rejects, and turn production receipts into accurate unit costs, you end up with stock drift, margin confusion and chronic shortages.

Foundations: Inventory-Centric ERP ·
WMS ·
AI functionality

What is manufacturing ERP?

Manufacturing ERP is the operational system used to plan, execute and account for production while controlling inventory end-to-end:
purchasing components, moving materials to plants, consuming raw materials into WIP, receiving finished goods, and capturing true yield, rejects and unit costs.

Inventory controlRaw materials, WIP and finished goods across locations
PlanningForecast-driven material requirements and replenishment discipline
ExecutionManufacturing orders, consumption, receipts, yields and rejects
Cost accuracyActual unit cost at receipt, not guesswork

Related: Stok.ly Manufacturing (product page).

Managing finished manufactured goods and raw materials (plus WIP)

The baseline requirement is a clean, location-level inventory model across warehouses, plants and subcontractors—so the business knows what it truly has, where it is, and what it is committed to.

Raw materials

  • Stock by location: warehouse, plant, subcontractor
  • Traceability of receipts, transfers and consumption
  • Supplier lead times and reorder policies
  • Visibility of “available vs committed”

WIP and finished goods

  • Manufacturing orders and component allocation
  • WIP visibility (what is in process and why)
  • Finished goods receipt into the correct warehouse/bin
  • Yield and reject capture on receipt

Multi-location foundations: Multi-location inventory

Forecasting inventory requirements for both raw materials and finished goods

Manufacturing planning becomes manageable when demand signals (sales history, forecasts, seasonality) drive what you need to build—and therefore what you need to buy.
A manufacturing ERP should provide a clear view of material requirements tied to demand and lead times.

Finished goods demand planning

Forecast demand and convert it into manufacturing requirements by SKU, by location and by time period—so production aligns to service levels.

Raw material requirements (MRP-style)

Translate the finished goods plan (BOM explosion) into raw material requirements, accounting for lead times, minimum order quantities and constraints.

Constraint-aware decisions

Identify what will be short, when it will be short, and what action is needed (buy, transfer, reschedule, substitute).

Planning pages: AI demand forecasting · AI functionality

Raw material inventory visibility across suppliers and manufacturing plants

If you manufacture in more than one place—or use subcontractors—visibility across locations becomes essential. The ERP should show:
what is on hand, what is in transit, what is inbound, and what is reserved for production.

What a good view includes

  • Raw material on-hand by warehouse / plant / subcontractor location
  • Inbound supply by supplier and ETA
  • Allocated quantities to manufacturing orders
  • Transfer pipeline visibility (what is moving, from where, to where)

Automating purchasing and stock transfers of raw materials (onsite and offsite manufacturing)

Once requirements are visible, execution should be automated. Manufacturing ERP should reduce manual planning by generating purchasing and transfer actions based on policy and constraints.

Automated purchasing

Generate purchase proposals for raw materials based on forecast-driven requirements, reorder policies, supplier lead times and minimum order quantities.

Automated transfers

Move raw materials from central warehouses to plants/subcontractors with traceability, ensuring production sites have what they need when they need it.

Traceability and control

Every movement should have an audit trail: create → pick → ship → receive → reconcile.

Related: Stock It · WMS

Managing manufacturers and recording yields and reject rates

Subcontractors and internal plants are not interchangeable. You need performance data to manage capacity, quality and true cost.

What to capture per manufacturer

  • Lead times by product / production run
  • Yield percentages and reject rates over time
  • Quality issues by SKU / batch (where applicable)
  • Cost differences and variance vs expected

Why it matters

  • Improves planning accuracy and service levels
  • Reduces hidden margin leakage from scrap and rework
  • Supports supplier/manufacturer negotiation with evidence

Scheduling manufacturing runs

Scheduling is where planning meets reality. A manufacturing ERP should support deciding what to run, where, and when—based on demand, material availability and capacity.

Run scheduling

Prioritise runs based on demand urgency, service levels and constraints, and create a clear forward plan for production teams.

Material readiness

Confirm raw materials are available (or transferred/inbound) before starting runs to avoid mid-run shortages.

Visibility

Provide a view of upcoming runs, WIP status, and projected finished goods receipts into warehouses.

Work in progress (WIP) and consumption discipline

WIP becomes a black hole when consumption is not controlled. The ERP must support disciplined issuing of raw materials to production (or subcontractors) and visibility on what is in process.

High-signal workflow to validate

  • Create manufacturing order and allocate components
  • Pick/issue raw materials (scan-led where appropriate)
  • Record WIP progress and exceptions
  • Receive finished goods and record yield/reject

Receiving finished goods into warehouses and capturing yields and reject rates

The goods receipt step is where control is won or lost. Manufacturing ERP should capture what was actually received, what was rejected, and where finished goods landed—so inventory stays accurate.

Goods receipt discipline

Receive finished goods into the correct warehouse/bin and update availability immediately for sales and replenishment.

Yield and rejects

Record actual yield vs planned yield, and reject quantities with reason codes where useful for continuous improvement.

Downstream impact

Receipts should automatically unblock backorders, pre-sales and allocations when stock becomes available.

Fulfilment pages: WMS · Pick, pack and despatch

Calculating actual manufactured cost per unit accurately at goods receipt

Forecast costs are helpful. Actual costs are decisive. Manufacturing ERP should be able to calculate an accurate unit cost at the point of goods receipt by incorporating:
component costs, yields/rejects, and relevant production or subcontractor costs.

What to validate

  • Component and raw material cost basis
  • How yield and rejects impact unit cost
  • Subcontractor or production costs applied to the run
  • How the ERP posts cost into inventory valuation and accounting integration

Accounting integration page (if applicable): Accounting integrations

Automating the picking of raw materials through rules and the Stock App

Raw material movement is where mistakes compound. The goal is to make issuing components to production predictable, scan-led, and policy-driven.

Rules-based picking

  • Pick lists generated from manufacturing orders
  • Bin-level direction (where to pick from)
  • Replenishment triggers when pick faces run low
  • Exception handling: short picks, substitutions, variance capture

Warehouse execution (scan-led)

  • Barcode scanning to confirm correct component and quantity
  • Audit trail on every inventory movement
  • Consistent receiving/putaway/picking discipline shared with fulfilment

See: WMS and Stock It.

How Stok.ly fits for manufacturing-led inventory operations

Stok.ly is designed for inventory-led operations, including manufacturing and kitting. It connects demand, raw material control, production execution, warehousing and fulfilment into one platform—supported by AI planning to reduce manual workload.

Validate Stok.ly against your workflow

  • BOMs, kitting and manufacturing orders
  • Raw material visibility across warehouses, plants and subcontractors
  • Purchasing and transfer automation for materials
  • Run scheduling, WIP and disciplined consumption
  • Finished goods receipt with yield/reject capture
  • Actual unit cost at receipt and downstream valuation
  • Warehouse execution via barcode-led workflows

Next step

If production is driving stockouts, write-offs or margin confusion, validate an inventory-centric manufacturing ERP.
Book a demo and we’ll map your raw materials, WIP, yields/rejects, goods receipt and costing workflow end-to-end.

Stok.ly overview video

A short overview of how Stok.ly supports inventory-led operations across warehouses, retail, wholesale and manufacturing.


Explore related cluster pages

FAQs

What is the biggest ERP challenge in manufacturing-led businesses?

Inventory truth. If raw materials, WIP and finished goods are not controlled with disciplined movements, yields and receipts, forecasting and costing become unreliable—and the business ends up firefighting shortages and margin surprises.

How do yields and rejects affect inventory and costing?

Yield and reject rates change the effective unit cost and the quantity available for sale. Capturing actual receipts and rejects at goods receipt is critical for inventory accuracy and true margin control.

How should subcontract manufacturing be managed?

You need visibility of raw material stock at the subcontractor location (or what is in transit), traceable transfers, manufacturing order tracking, and disciplined receipts with yield/reject capture when finished goods return to your warehouse.

Can AI help with manufacturing planning?

Yes. AI-supported forecasting and planning can reduce manual workload by informing what to build and what to buy, under constraints such as lead times, minimum order quantities and capacity.

© Stok.ly. This page is intended for informational guidance to support software evaluation.
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