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MANUFACTURING ERPINDIAN SME28 MIN READFEB 2026

Custom ERP for Indian Manufacturing SMEs: Complete Development Guide

Quick Answer

Custom ERP reduces operational inefficiency by 40% for Indian manufacturing SMEs. An 8-module system covering production, inventory, purchase, quality, job work, and GST compliance costs Rs 15 lakh to Rs 2 crore with a 16-20 week phased implementation. Integrates with Tally for accounting and includes mobile app for shop floor operations. ROI within 10-16 months.

Indian manufacturing SMEs lose 15-25% of operational efficiency to disconnected systems — Excel for production planning, WhatsApp for order tracking, Tally for accounting, and paper for quality records. This guide covers how to build a custom ERP designed for Indian manufacturing realities including GST compliance, job work tracking, and Tally integration.

40%
Less Operational Waste
87%
Faster Production Planning
42%
Shorter Delivery Cycle
Rs 15-70L
Development Cost
Modules

8 Manufacturing ERP Modules

Production Planning & Control

Core

Inventory & Warehouse

Core

Purchase & Vendor Management

Core

Quality Management

Core

Sales & Dispatch

Core

Job Work Management

India-Specific

Accounts & GST Compliance

Core

HR & Payroll (Basic)

Optional

Production Planning & Control

MRP, capacity planning, job scheduling, work order management, and real-time shop floor tracking with operator efficiency monitoring

Bill of Materials (multi-level)MRP run with auto-PO generationWork order scheduling (Gantt chart)Machine utilization trackingOperator efficiency reportsWIP tracking and costing
Technology

Tech Stack for Manufacturing ERP

TechnologyCategoryPurpose
React.js / Next.jsFrontendResponsive web dashboard with role-based views for management, production, and store teams
React Native / FlutterMobile AppOffline-capable mobile app for shop floor operators, storekeepers, and quality inspectors
Node.js / NestJSBackend APIRESTful API layer with business logic, workflow engine, and GST computation
PostgreSQLDatabaseRelational database for transactional data (orders, invoices, stock movements) with ACID compliance
RedisCache / QueueSession management, real-time dashboard data, and background job queue (report generation, email)
Tally API / TallyPrimeAccounting IntegrationBi-directional sync with Tally for voucher push, ledger sync, and statutory compliance
NIC e-Invoice APIGST ComplianceE-invoicing IRN generation, e-way bill creation, and GSTN validation
AWS / DigitalOceanInfrastructureCloud hosting with daily backups, SSL, and 99.9% uptime SLA (or on-premise option)
ROI

Before vs After: Operational Impact

MetricBefore (Excel/Tally)After (Custom ERP)Improvement
Inventory Carrying CostRs 45L/year (overstocking)Rs 28L/year-38%
Production Planning Time8 hours/week (Excel)1 hour/week (MRP)-87%
Order-to-Dispatch Cycle12 days7 days-42%
Data Entry Duplication3x (Excel + Tally + WhatsApp)1x (single entry)-67%
Material Wastage6.5% of raw material cost3.2%-51%
Purchase Cost SavingsNo vendor comparison8-12% savings via RFQ+10%
Quality Rejection Rate5.5% (late detection)2.1% (early detection)-62%
Monthly Closing Time15 days3 days-80%
Pricing

Cost Breakdown by SME Size

TierSME SizeCostModules IncludedTimeline
Basic ERP (Core Modules)Rs 5-25 Cr revenue SMERs 15-30 LakhInventory, Production (BOM, work orders), Purchase, Sales, Basic Accounts/Tally integration, GST compliance14-16 weeks
Mid-Range ERPRs 25-100 Cr revenueRs 30-70 LakhAll basic + Quality, HR/Payroll, Job Work, Mobile App, Advanced Reporting, Multi-location support18-22 weeks
Enterprise ERPRs 100+ Cr / Multi-plantRs 70L - 2 CroreAll mid-range + IoT integration, BI dashboards, AI demand forecasting, Multi-company consolidation24-32 weeks
Annual MaintenanceAnyRs 2-6L/yearBug fixes, GST/compliance updates, minor enhancements, server monitoring, support SLAOngoing
Comparison

Custom ERP vs SAP B1 vs ERPNext vs Tally

FeatureCartoon Mango (Custom)SAP Business OneERPNextTally Prime
Indian Manufacturing FitBuilt for Indian job shop, BOM, job work, GSTGlobal design, needs India customizationDecent India base, limited manufacturing depthAccounting only, no manufacturing
GST Compliance DepthE-invoicing, e-way bill, RCM, job work GST, TDS, ITC trackingGood GST, expensive add-onsBasic GST, e-invoicing availableStrong GST in accounting, no operational link
Job Work ManagementFull challan tracking, process costing, sub-contractor managementSubcontracting module (complex setup)Basic subcontractingNot available
Shop Floor TrackingReal-time operator/machine tracking, mobile app, IoT-readyAvailable with MES add-on (extra cost)Basic workstation trackingNot available
Mobile App (Offline)Fully offline-capable for shop floor, store, QCLimited mobile, no offlineMobile app (limited offline)No mobile
Total Cost (Year 1)Rs 15-70L (one-time, you own it)Rs 25-60L (license + implementation + AMC)Rs 8-20L (customization + hosting)Rs 50K-2L (accounting only)
Implementation Time16-20 weeks (phased)6-12 months8-16 weeks2-4 weeks (accounting only)
Customization Freedom100% — built to your exact workflowLimited without expensive consultantsOpen source but complex to customize deeplyMinimal customization
Timeline

20-Week Implementation Roadmap

Weeks 1-3

Business Process Mapping & Design

  • Map current workflows (production, purchase, inventory, sales, accounts)
  • Identify pain points and automation opportunities
  • Define module priority and go-live sequence
  • Design database schema and user role matrix
  • UI/UX wireframes for key screens (production dashboard, stock, PO)
Process documentModule specificationWireframesProject plan
Weeks 4-8

Core Module Development

  • Build inventory management (multi-warehouse, batch tracking, barcode)
  • Build BOM management and production order module
  • Build purchase module (indent → RFQ → PO → GRN)
  • Build sales module (quotation → SO → invoice → dispatch)
  • Implement role-based access control and approval workflows
Inventory module liveProduction module livePurchase module liveSales module live
Weeks 9-12

Accounting, GST & Integration

  • Build accounting module or Tally bi-directional integration
  • Implement GST computation (CGST/SGST/IGST, RCM, ITC)
  • E-invoicing integration with NIC API
  • E-way bill auto-generation
  • Bank payment integration and reconciliation
Accounts/Tally integrationGST compliance liveE-invoicing active
Weeks 13-16

Quality, Job Work & Mobile App

  • Build quality management module (incoming, in-process, final QC)
  • Build job work challan management and sub-contractor tracking
  • Develop mobile app for shop floor, store, and QC operations
  • Build management dashboards and MIS reports
  • Performance optimization and security audit
Quality module liveJob work module liveMobile app deployedDashboards ready
Weeks 17-20

Data Migration, Training & Go-Live

  • Migrate masters from Excel/Tally (items, vendors, customers, BOM)
  • Import opening balances and validate against Tally
  • Parallel run (2-4 weeks) — ERP alongside existing system
  • User training for all departments (production, store, purchase, accounts)
  • Go-live with post-launch support and optimization
Data migrated and validatedUsers trainedSystem liveSupport handover

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Related Services

ERP DevelopmentInventory ManagementCRM DevelopmentEnterprise ApplicationsManufacturing AIAI/ML Bangalore

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Frequently Asked Questions

Common questions about AI automation for custom ERP for Indian manufacturing SMEs

  • What is a custom ERP for manufacturing SMEs?

    A custom ERP (Enterprise Resource Planning) is a software system built specifically for your manufacturing operations — covering production planning, inventory management, purchase orders, quality control, shop floor tracking, and financial accounting in one integrated platform. Unlike generic ERPs (Tally, SAP B1) that force you to adapt your workflow to their software, a custom ERP is designed around how your factory actually operates. For Indian manufacturing SMEs doing Rs 5-100 crore revenue, custom ERPs eliminate the spreadsheet chaos, WhatsApp-based order tracking, and disconnected Tally entries that cause 15-25% operational inefficiency.

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  • How much does a custom manufacturing ERP cost in India?

    Custom ERP development costs for Indian manufacturing SMEs: Basic ERP (inventory + production + accounts): Rs 15-30 lakh. Mid-range ERP (+ quality, HR, CRM, mobile): Rs 30-70 lakh. Enterprise ERP (multi-plant, BI, IoT integration): Rs 70 lakh to Rs 2 crore. Compare this to SAP Business One (Rs 15-40 lakh license + Rs 10-20 lakh implementation + Rs 5-10 lakh/year AMC) or ERPNext (free software but Rs 8-20 lakh for customization and implementation). Custom ERP has higher upfront cost but zero license fees, full ownership, and exact fit to your manufacturing process — no workarounds needed.

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  • Custom ERP vs SAP Business One vs ERPNext — which is best for Indian SMEs?

    SAP Business One: Best for SMEs planning to scale to Rs 500+ crore or needing SAP ecosystem for large customer compliance. Expensive (Rs 25-60 lakh total first year), rigid customization, long implementation (6-12 months). ERPNext: Best for budget-conscious SMEs wanting quick deployment. Free open-source but needs Rs 8-20 lakh for manufacturing customization. Good base but limited for complex Indian manufacturing (job work, excise, multi-unit). Custom ERP: Best when your manufacturing process is unique (job shops, made-to-order, complex BOM), you need deep GST/TDS integration, or off-the-shelf ERPs need 40%+ customization. At that customization level, custom is more cost-effective and maintainable.

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  • How long does it take to build a custom manufacturing ERP?

    Typical timeline: Phase 1 (Weeks 1-3): Business process mapping, requirement documentation, module prioritization. Phase 2 (Weeks 4-8): Core module development (inventory, BOM, production orders, purchase). Phase 3 (Weeks 9-12): Accounting integration, GST compliance, reporting. Phase 4 (Weeks 13-16): Quality module, HR basics, mobile app. Phase 5 (Weeks 17-20): Data migration from Tally/Excel, user training, go-live. Total: 16-20 weeks for core modules, with additional modules rolled out quarterly. We recommend a phased approach — go live with inventory + production first, then add modules every 6-8 weeks.

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  • Can the custom ERP integrate with Tally for accounting?

    The custom ERP integrates bi-directionally with Tally, automatically pushing sales invoices, purchase entries, stock movements, and journal vouchers while syncing ledger balances and bank reconciliation back to ERP dashboards. Most Indian manufacturing SMEs want to keep Tally for statutory compliance (GST filing, TDS, balance sheet) while using the ERP for operations. This eliminates double entry — your accountant continues using Tally while production, purchase, and sales teams work in the ERP. For SMEs ready to move away from Tally, we build full accounting modules with GST return generation, TDS computation, and statutory reports.

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  • What manufacturing-specific modules does the ERP include?

    Core manufacturing modules: (1) Bill of Materials (BOM) management — multi-level BOM, alternate materials, by-product tracking. (2) Production Planning — MRP (Material Requirements Planning), capacity planning, job scheduling. (3) Shop Floor Control — work order tracking, machine utilization, operator efficiency, real-time production status. (4) Quality Management — incoming/in-process/final inspection, rejection tracking, CAPA, test certificates. (5) Inventory — multi-warehouse, batch/lot tracking, reorder points, stock aging, dead stock alerts. (6) Purchase — vendor management, RFQ/PO automation, GRN, vendor rating. (7) Job Work — challan tracking for outsourced processes (common in Indian manufacturing). (8) Dispatch & Logistics — packing list, e-way bill, transporter management.

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  • How does the ERP handle GST compliance for manufacturers?

    Our ERP handles all GST scenarios specific to Indian manufacturing: Auto-calculation of CGST/SGST/IGST based on buyer/seller state. HSN code mapping for all products and raw materials. Input tax credit tracking and reconciliation with GSTR-2B. E-invoicing (IRN generation) via NIC API for turnover above Rs 5 crore. E-way bill auto-generation for dispatches. Reverse charge mechanism for specified goods. Job work challan tracking (crucial for manufacturers outsourcing processes). GST return data export (GSTR-1, GSTR-3B format). TDS under GST for applicable transactions. All tax calculations are configurable — when GST rates change, you update the master, not the code.

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  • Can the ERP work on mobile for shop floor workers?

    The ERP includes mobile-first interfaces with offline support for all shop floor roles — operators, storekeepers, quality inspectors, purchase teams, and management. Production operators scan work orders, log production quantities, report machine breakdowns, and perform quality checks via mobile. Store keepers use barcode/QR scanning for material issue/receipt and physical stock count. Quality inspectors access inspection checklists, defect photo capture, and test result entry on tablet. Purchase team can approve POs, view vendor quotes, and do GRN entry from mobile. Management gets real-time dashboards, approval workflows, and alerts. The app works offline (critical for factory floors with poor connectivity) and syncs when connected.

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  • How do you handle data migration from Excel and Tally?

    Data migration is the most critical phase. Our approach: (1) Audit existing data in Excel sheets, Tally, and paper records. (2) Create migration templates — standardized Excel formats for masters (items, vendors, customers, BOM) and opening balances. (3) Data cleaning — remove duplicates, standardize naming (same vendor with 5 different names in Excel), validate quantities. (4) Automated import scripts with validation rules (e.g., BOM quantities must be positive, GST numbers must be valid). (5) Parallel run for 2-4 weeks — both old system and ERP running simultaneously to verify data accuracy. (6) Cutover with opening balance verification. Typical migration timeline: 3-4 weeks for an SME with 500-5000 SKUs.

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  • What reports and dashboards does the ERP provide?

    Manufacturing-specific dashboards: Production Dashboard — daily output vs target, machine utilization, WIP status, delay alerts. Inventory Dashboard — stock levels vs reorder points, dead stock, stock aging, top moving items. Purchase Dashboard — pending POs, vendor delivery performance, price trends, upcoming payments. Quality Dashboard — rejection rates by product/machine/operator, CAPA status, customer complaints. Finance Dashboard — receivables/payables aging, cash flow projection, profitability by product/customer. MIS Reports — production cost analysis, BOM vs actual consumption, capacity utilization, yield analysis. All reports are exportable to Excel and configurable by the user.

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  • Is the ERP suitable for job shop and made-to-order manufacturing?

    Custom ERP is ideal for job shop and made-to-order manufacturing, supporting dynamic BOM creation per order, per-order costing, and job work challan tracking — workflows that are extremely hard to implement in SAP B1 or ERPNext. Additional features include quotation-to-production workflow with customer approval tracking, actual vs estimated cost tracking for material, labor, and overhead, multi-level sub-assembly tracking with inter-department material transfer, customer-supplied material management (common in Indian job shops), and progress billing based on milestones.

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  • What kind of support and maintenance is provided after go-live?

    Post go-live support: First 3 months — dedicated support engineer, daily check-ins, immediate bug fixes, weekly optimization calls. Months 4-12 — monthly maintenance (bug fixes, minor enhancements, performance optimization), quarterly review meetings. Ongoing — annual maintenance contract (Rs 2-6 lakh/year based on complexity) covering server monitoring, security patches, minor feature additions, Tally/GST updates. We also provide: user training videos for new employees, a knowledge base, and WhatsApp support group for quick queries. For critical issues (system down, data corruption), we guarantee 2-hour response and 8-hour resolution SLA.

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Written by the Cartoon Mango engineering team, based in Bangalore and Coimbatore, India. We build custom ERP systems, manufacturing software, inventory management platforms, and enterprise applications for Indian SMEs across automotive, pharma, textile, and engineering sectors.