Engineering companies often make things that have never been made in exactly that form before. A customer sends a drawing or a specification, the business estimates the work, quotes a price, wins the order and then builds to suit. Each stage depends on the one before it. A quote that misses a process, a drawing that changes after the job has started or a subcontract part that returns without the right certificate can each upset the whole job. ERP for engineering companies brings those stages into one record.
Many engineering firms run on a mix of estimating spreadsheets, a drawing folder on a shared drive, routings written on a paper job traveller that moves with the work, and a purchase order book that is updated when someone has a moment. It works until a job runs late and nobody can say which revision was built, which operation overran or why the margin has fallen.
This guide looks at the parts of an engineering business that an ERP should connect, from enquiry and estimate through to subcontract work and job costing. It is written for managing directors, estimators, production managers and finance leads in make-to-order businesses.
Quotes and estimates that become engineering jobs
The quote is the first commitment a business makes on a job. If the estimate is built from the same records production will use, the quote is a sound starting point for the work. If it is built separately, the job begins with a gap between what was promised and what the shop has to do.
Estimating from the drawing and its operations
A good estimate starts with the drawing and works through the operations the part needs. Each operation carries an allowance for setup and run time, materials and bought-in parts are costed, and external processes are priced from supplier quotes. Storing those allowances against the operations means the next estimate for a similar part can start from known figures rather than from recollection.
Before pricing begins, a short technical review should confirm that the drawing is complete, that the tolerances and finishes can be achieved, and that the materials named are available in the required form. Questions raised at that stage are cheaper to answer before the quote goes out than after the order is placed.
Quote versions, validity and conversion to a job
Customers often ask for changes, so quotes need version numbers, a validity date and a clear record of which version was accepted. When a quote becomes an order, the job should carry the quoted figures forward as its baseline. That lets the business compare what it expected with what it spent. A quote that is accepted but not linked to a job makes that comparison impossible.
Drawings and revisions under control
Drawings define what is built, and revision letters define which version of a drawing applies. Engineering problems often start with work to an old revision, or with a change that reached the shop floor but never reached purchasing. An ERP can keep the drawing register and each job's revision in one place, so the question of which drawing a job is built to has one answer.
Drawing register and revision history
A drawing register records each drawing number, its current revision, the date it was issued and who approved it. Each change should say what was altered. Linking every job, quote and routing to a specific revision makes it clear which version the customer has approved and which version the shop is working to.
Customers send drawings in several forms, including PDFs, CAD files and marked-up prints, and each form carries its own risk. The register should record which file is the controlled copy and where it is held, so the shop is not working from a print that has been pinned to a bench for a month.
Changes during a live job
A revision issued after a job has started is one of the most expensive surprises in engineering. Material may already be bought, operations may be partly finished and subcontract work may be on its way. The system should show which open jobs use the changed drawing, flag any parts that need rework or new purchasing, and keep the old revision on record for the work already completed.
Job routings that show the real route through the shop
A routing is the list of operations a part passes through, in order, with the work centre, setup time and run time for each one. It links the drawing to the shop floor. Without it, planners guess at capacity and operators have to ask what comes next.
Building the routing from the drawing
Each line of a routing should record enough detail for the shop to work from it and for the planner to schedule it:
- Operation number and a clear description
- The work centre or resource that carries it out
- Planned setup time and run time per part
- Any inspection or sign-off point
- Whether the operation is internal or external
Operations done outside the business should be marked as external, so they are scheduled and tracked as subcontract steps. A routing kept in the system can be reused for repeat work and given a new version number when the method improves.
Using routings for scheduling and progress
When routings are linked to jobs, the planner can see the load on each work centre, and the shop can record when each operation starts and finishes. Late operations show up before they become late jobs. The actual times recorded against each operation also feed back into estimating, which is where the business learns whether its allowances are right.
A late start at one work centre usually moves every later operation on that job, and it may also hold up the jobs queued behind it. Showing that knock-on effect to the planner, rather than only the single late operation, is what makes the schedule useful for decisions.
Subcontract operations that leave the building and return
Many engineering jobs include processes the business does not carry out itself, such as heat treatment, plating, grinding on specialist machines or non-destructive testing. These subcontract steps are part of the job. They need to be planned, purchased, tracked and inspected like any other operation.
Purchase orders that carry the drawing and revision
A subcontract purchase order should state the process, the drawing number and revision, the quantity, the certificates required and the delivery date. Sending the right revision to the supplier matters as much as sending the parts. The order should link back to the job and the routing operation, so the job shows that step as waiting on a supplier rather than as complete.
Returns, certificates and goods-in inspection
When parts come back from a subcontractor, goods-in should check the quantity, the paperwork and any certificates against the order. Material and process certificates should be stored against the job, so they can be produced when a customer asks for them. A batch that fails inspection goes on hold and returns to the supplier with a clear record of what was found.
External processes are often the longest part of a job, so their lead times belong on the schedule from the start. Keeping a list of approved subcontractors, with the processes each one is approved to carry out, stops work being sent to a supplier that has not been checked for that process.
Job costing that sharpens the next estimate
Job costing is the test of whether the estimate was right. An engineering business that compares what a job cost with what it quoted learns quickly where its allowances are too low or too high. That feedback is more useful than a single profit figure at the end of the year.
Estimated and actual hours by operation
Hours booked against each operation, together with materials, subcontract charges and any scrap or rework, give a cost for every stage of the job. Set beside the estimate, they show which operations overran and by how much. Looking at operations rather than the job total matters, because the fix is usually in one place, such as a setup time that is often underestimated.
Turning variances into better estimates
Over time, variance records should flow back into the allowances the estimator uses. Where a supplier's lead time has run longer than assumed, or a process has needed more setup than planned, the next estimate should reflect it. Recording a short reason for each variance makes the review meeting far more productive.
A short review after each closed job can cover a few fixed questions:
- Which operation ran longest against its allowance
- Did the material price or quantity change from the quote
- Did any subcontract step arrive late, and what did the delay cost in time
- What should change in the next estimate for this part
Scoping an ERP for an engineering company
The sensible way to begin is with one live job, not a list of every module. Pick a job that has a quote, a drawing revision, a routing, at least one subcontract step and a clear outcome. Follow it through the proposed system and check whether the records answer the questions the business asks at each stage.
Decide the master record for each item
Before the system is configured, agree which record is the master for each kind of information. The drawing register should own revisions, the estimating process should own the quote, and the routing library should own standard operations. Where two teams keep their own copy of the same information, one copy will eventually be wrong.
Plan the switch around open jobs
Engineering businesses usually have jobs in progress when a new system arrives. Those jobs need a clear rule: either they finish in the old way, or they move across with their quotes, revisions, routings and purchase orders checked. Planning the switch around the order book, rather than the calendar alone, lowers the risk of a live job being lost between systems.
FAQ
What is make to order manufacturing?
Make to order means production starts after a customer has confirmed an order, usually to a specification or drawing that differs from one job to the next. It contrasts with making to stock, where products are built in advance. Engineering companies often work this way, because each job carries its own design, quote and routing.
How does an ERP help engineering companies with quotes?
An ERP can keep quotes linked to the drawings, operations and supplier prices they are built from, with version numbers and validity dates. When a quote is accepted, the job carries the quoted figures forward, so the business can compare what it expected with what it spent. That link is one of the most practical benefits for estimators.
What is a routing in engineering production?
A routing is the ordered list of operations a part goes through, with the work centre, setup time, run time and inspection points for each step. It lets planners see capacity and lets operators see what comes next. Routings can be reused for repeat work and updated with a version number when the method changes.
How should drawing revisions be controlled in an ERP?
Each drawing should have a register entry with its current revision, approval date and change record. Jobs, quotes and purchase orders should refer to a specific revision, so everyone knows which version is in use. When a revision changes during a job, the system should show which open work is affected.
How are subcontract operations tracked in an ERP?
A subcontract operation is usually raised as a purchase order linked to the job and the routing step, with the drawing revision and certificate requirements stated. The job shows that step as waiting on the supplier until the parts return and pass goods-in inspection. That keeps the job status accurate even when work is outside the building.
How can job costing improve estimates for engineering work?
Comparing actual hours, materials and subcontract costs with the original estimate, by operation, shows where allowances are too low or too high. Recording the reason for each variance helps the estimator correct the next quote. Over time the business builds more reliable figures for the work it does most often.
Final thought
ERP for engineering companies becomes worth the effort when quotes, drawings, routings and subcontract work have grown past what one estimator or one production manager can hold in their head. The aim is a record that follows the job from enquiry to invoice, with the cost of each stage visible.
The estimate and the job record come first, since they set the baseline for everything else. Routings and job costing then give the shop and the office a shared view of progress, and the feedback loop sharpens the next quote.
Mirex Agency, based in London, can help you trace one job from enquiry to delivery before any software is selected. Our ERP solutions service is designed to connect those steps so estimating, production and finance work from the same numbers.
