Quick Summary
1. On-Premise ERP Offers Full Control
Ideal for large manufacturers needing in-house data security and custom setups, though it requires higher IT investment.
2. Cloud ERP is Cost-Effective & Scalable
Perfect for Indian SMEs, offering remote access, low upfront costs, and automatic updates.
3. Hybrid ERP Combines Flexibility & Security
A mix of cloud and on-premise modules, suitable for growing businesses in digital transition.
4. Industry-Specific ERP Speeds Up Deployment
Tailored for manufacturing workflows like production planning, inventory tracking, and quality control.
5. Open-Source ERP Allows Full Customisation
Best for tech-savvy businesses that need unique workflows, and require skilled IT resources for setup and maintenance.
Choosing the right ERP software for the manufacturing industry can be a game-changer in India. With so many options available today, it’s important to understand the different types of ERP software, their core features, and which one suits your manufacturing needs. In this blog, we’ll cover the main types of ERP software, discuss how they benefit manufacturers, and share key points to help you choose the right system
What is ERP Software?
Enterprise Resource Planning (ERP) software is a centralized platform that helps businesses manage and automate their day-to-day operations, from production, inventory, and procurement to accounting and HR. For manufacturers, ERP software brings all departments together, ensuring seamless coordination, real-time updates, and better decision-making. It eliminates the need for multiple tools and reduces manual errors. If you’re new to ERP, check out our previous blog on what ERP is and how it transforms your business operations to get a foundational understanding.
What are the types of ERP Software For Manufacturing Industry?
Understanding what are the types of ERP software will help you decide which model suits your manufacturing unit the best. Below are the most common types of ERP systems manufacturers use today.
1. On-Premise ERP
On-premise ERP systems are installed locally on your own servers and infrastructure. This setup gives you full control over your data, customizations, and security. Manufacturers that handle sensitive data or operate in highly regulated industries often prefer on-premise ERP due to its high level of control.
However, this model requires a significant upfront investment in hardware and software, along with ongoing maintenance. You’ll also need an in-house IT team to manage updates and troubleshooting.
Best suited for: Large manufacturing units with strong IT capabilities and strict data control requirements.
2. Cloud-Based ERP
Cloud ERP systems are hosted on the vendor’s servers and accessed via the internet. This means you don’t need to invest in physical infrastructure. The software is typically offered on a subscription basis (monthly or yearly), making it cost-effective for SMEs.
One of the biggest advantages of cloud ERP is accessibility; you can manage your operations from anywhere, on any device. Cloud ERPs are also scalable, allowing you to add users or features as your business grows. Plus, updates are automatic, reducing the burden on your internal teams.
Best suited for: Small to medium-sized manufacturers looking for affordability, flexibility, and ease of use.
3. Hybrid ERP
A hybrid ERP model offers the best of both worlds. It allows businesses to keep certain operations on-premise (like finance or production) while running other modules (like HR or CRM) on the cloud. This setup provides flexibility in deployment and can be tailored to meet your unique business needs.
It’s particularly useful for businesses that are in the middle of digital transformation or operate in multiple locations where cloud access is essential but certain data must remain on-premises.
Best suited for: Manufacturers with complex operations or transitional IT infrastructure.
4. Industry-Specific ERP
Unlike generic ERP systems, industry-specific ERPs are built with modules and workflows designed for a particular sector, in this case, manufacturing. They come pre-loaded with features like production scheduling, shop floor management, raw material tracking, and quality control.
Because they’re tailored for your industry, these ERPs require less customization and can be implemented faster. They also follow industry best practices, helping you stay compliant and competitive.
Best suited for: Manufacturing businesses looking for a ready-to-use ERP with minimal customization needs.
5. Open-Source ERP
Open-source ERP solutions give you access to the source code, allowing full control over the software. This means your team can customize every module to fit your exact requirements. It’s a great choice if you have unique workflows that off-the-shelf solutions can’t accommodate.
However, open-source ERPs come with challenges; your IT team must be skilled enough to handle the installation, updates, and ongoing support. Also, many open-source options offer limited documentation and customer service.
Best suited for: Tech-savvy manufacturers with dedicated IT teams and highly custom business needs.
How to Choose the Right ERP for Your Manufacturing Industry
Now that you know the different types, here’s how you can select the right ERP software for the manufacturing Industry
1. Define Your Requirements
Identify your pain points. Are you struggling with raw material tracking? Is your production scheduling all over the place? Do you need better GST reporting? List out your priorities.
2. Fix Your Budget
ERP implementation is an investment. Cloud models offer budget-friendly options, while on-premise systems might have higher initial costs but lower recurring expenses.
3. Consider Scalability
Choose an ERP that can grow with your business. Whether you’re adding new locations, expanding product lines, or hiring more staff, your ERP should support it.
4. Check for Indian Compliance
Ensure the ERP supports Indian tax systems like GST, TDS, and e-invoicing. A solution tailored for Indian businesses will save you from unnecessary complications later.
5. Evaluate Ease of Use and Support
An ERP with a complicated interface will slow down your team. Go for something user-friendly, and ensure the vendor provides reliable customer support, preferably with a local team in India.
6. Ask for Integration Options
Make sure the ERP can integrate with your existing tools, accounting software, CRMs, or eCommerce platforms, so you don’t have to switch everything at once.
Conclusion
In India’s fast-paced manufacturing sector, ERP is no longer a luxury; it’s a necessity. Whether you’re a small-scale unit or an enterprise manufacturer, choosing the right type of ERP software will improve your productivity, reduce operational hiccups, and offer real-time control over your business processes. Based on your scale, needs, and budget, you can decide whether a cloud-based, on-premise, or industry-specific ERP suits you best. If you’re unsure where to begin, it’s always a good idea to experience an ERP in action. You can book a free demo here and see how Tejo ERP can simplify your manufacturing operations with an intuitive, India-ready solution.
Frequently Asked Questions:
2. What are the main types of erp software for manufacturing industry?
The main types include on-premise ERP, cloud-based ERP, hybrid ERP, industry-specific ERP, and open-source ERP. Each has its own benefits depending on business size and IT infrastructure.
3. Which ERP system is best for small manufacturing businesses in India?
Cloud-based ERP is generally the best fit for small manufacturers in India because it’s cost-effective, easy to implement, and doesn’t require heavy IT support.
4. What is the difference between cloud ERP and on-premise ERP?
Cloud ERP is hosted online and accessible from anywhere, while on-premise ERP is installed on local servers and offers greater control and customisation.
5. Is it necessary to choose an industry-specific ERP for manufacturing?
Industry-specific ERP systems come with pre-built manufacturing modules and are highly recommended for faster implementation and better alignment with production workflows.
6. Can ERP software handle GST and Indian tax compliance?
Yes, most ERP solutions built for the Indian market include GST support, TDS, e-invoicing, and other local tax features.
7. What factors should I consider when choosing ERP software for manufacturing Industry?
Key factors include your business size, budget, IT infrastructure, scalability, user-friendliness, industry fit, and local compliance requirements.
8. How much does ERP software cost for a manufacturing company in India?
Costs vary depending on the type of ERP, number of users, and features required. Cloud ERP typically starts at a monthly subscription, while on-premise ERP involves a higher one-time investment.
9. How long does ERP implementation take in a manufacturing setup?
Implementation can range from a few weeks to several months, depending on your business complexity, data migration needs, and training requirements.
10. Can I try ERP software before making a purchase?
Yes, you can book a free demo of Tejo ERP to explore how it works and whether it fits your manufacturing business needs.
Author Bio:
Nikita Govili
Content & Technical Writer at ExpandX
Nikita Govil is a skilled content and technical writer at ExpandX, bringing a strong background in software engineering to her work. She began her career as a software engineer in a multinational corporation, where she gained hands-on experience in diverse areas such as software testing, documentation, and project management. This technical foundation allows her to craft clear, insightful, and impactful content that bridges the gap between technology and business. At ExpandX, Nikita combines her writing expertise with her technical knowledge to deliver content that informs, engages, and supports clients in the manufacturing and ERP domains.