Clear definitions of 20 essential manufacturing and ERP terms every Indian MSME manufacturer should know. From BOM and MRP to ITC-04 and Kanban, each term explained with Indian context.
Structured list of raw materials, components, and sub-assemblies needed to manufacture a finished product.
Material Requirements Planning. Calculates what materials are needed, how much, and when, based on BOM and demand.
A document authorizing the shop floor to manufacture a specific quantity of a product by a target date.
The sequence of operations, work centers, and times required to manufacture a product.
Sending material to a third party for processing like heat treatment, plating, or machining, then receiving it back.
A non-stocked sub-assembly used for BOM structuring that passes straight through to the parent.
A visual pull-based signalling system that triggers replenishment only when material is consumed.
Buffer inventory held to protect against demand or supply variability and prevent stock-outs.
Inventory threshold that triggers a new purchase order to replenish stock before it runs out.
Economic Order Quantity. The order size that minimizes combined ordering and holding costs.
Inventory valuation methods: First-In-First-Out or Last-In-First-Out for costing consumed stock.
Goods Receipt Note. A document confirming receipt of goods from a supplier against a purchase order.
Matching purchase order, GRN, and supplier invoice before approving payment.
Electronic invoice registered on the IRP portal that returns an Invoice Reference Number and QR code.
Electronic document required for movement of goods above INR 50,000 in value.
Quarterly return filed by manufacturers for goods sent to and received from job workers.
Harmonised System of Nomenclature code for classifying goods under GST.
Services Accounting Code for classifying services under GST.