Manufacturing ERP Glossary

Money owed by a company to its suppliers for goods or services received but not yet paid for. In ERP systems, AP tracks invoices, payment schedules, and vendor balances.

Money owed to a company by its customers for goods or services delivered but not yet paid for. AR manages invoices, payment tracking, aging reports, and collections.

A chronological record of all data changes in a system, capturing who changed what, when, and from what previous value. In Yggdrasil, every table maintains a full audit trail for compliance and traceability.

A structured list of all materials, components, and sub-assemblies required to manufacture a product, including quantities and units of measure. BOMs are central to manufacturing, purchasing, and cost estimation.

A systematic process for investigating the root cause of quality problems, implementing corrective actions to fix them, and establishing preventive actions to ensure they don't recur. Part of quality management systems and regulatory compliance.

The practice and software systems for managing a company's interactions with current and potential customers. Covers accounts, contacts, opportunities, leads, and sales pipeline.

A method of inventory auditing where a subset of inventory is counted on a rotating schedule rather than performing a full physical inventory. More accurate and less disruptive than annual wall-to-wall counts.

The framework of policies, standards, and practices that ensure an organization's data is accurate, consistent, and trustworthy. In the Mimir Labs platform, Ratatosk provides structured data governance assessment before migration.

Manufacturing of distinct, countable items (e.g., automobiles, electronics, machinery) as opposed to process manufacturing. Products can be disassembled back into their component parts.

A bill of materials defined by the engineering team that represents the design intent of a product. The EBOM describes what a product is made of from an engineering perspective, before manufacturing considerations are applied.

A formal document that authorizes a change to a product's design, materials, or manufacturing process. ECOs go through an approval workflow and update the affected BOMs, drawings, and routing instructions.

A formal request to evaluate a proposed change to a product's design or manufacturing process. ECRs are reviewed and, if approved, result in an Engineering Change Order (ECO).

Integrated business software that manages core operational processes — finance, manufacturing, supply chain, sales, purchasing, and more — in a single system with a shared database. Eliminates data silos between departments.

A structured problem-solving methodology used in quality management. The eight disciplines are: team formation, problem description, containment, root cause analysis, corrective actions, implementation, preventive actions, and team recognition.

A quality process that verifies the first production unit of a new part or after a significant change meets all engineering specifications and requirements before full production begins.

The central accounting record that contains all financial transactions of a business, organized by account. The GL is the foundation of financial reporting — balance sheets, income statements, and cash flow statements all derive from it.

A documented procedure that specifies what characteristics of a product or process must be inspected, how they should be measured, acceptable limits, sampling frequency, and what actions to take when results fall outside specification.

Any movement of inventory — receipt, issue, transfer, adjustment, scrap, or return. Each transaction updates on-hand quantities and creates an audit record for traceability.

A record of a financial transaction in the general ledger, with at least one debit and one credit that balance. Journal entries are the atomic unit of financial accounting.

A visual workflow management method that uses cards or signals to trigger production or movement of materials. In ERP systems, Kanban can automate replenishment when inventory drops below a defined level.

The total time from when an order is placed to when it is received (purchasing lead time) or from when production starts to when the finished product is available (manufacturing lead time).

A bill of materials that represents how a product is actually built on the production floor. The MBOM may differ from the Engineering BOM (EBOM) to account for manufacturing processes, phantom assemblies, and shop floor realities.

A production planning system that calculates what materials are needed, how much, and when, based on the bill of materials, current inventory, open orders, and the production schedule. MRP generates planned purchase orders and work orders to meet demand.

A software architecture where a single instance of the application serves multiple organizations (tenants), with each tenant's data logically isolated from the others. Yggdrasil uses row-level tenant isolation across all database tables.

A document that records a deviation from specification, standard, or procedure. NCRs capture what went wrong, the disposition decision (rework, scrap, use-as-is, return to vendor), and any follow-up actions required.

The total quantity of an item physically present in a warehouse location. Distinguished from available quantity, which subtracts allocated and reserved stock.

A manufacturing metric that measures how effectively equipment is used. OEE combines three factors: Availability (uptime vs planned production time), Performance (actual speed vs ideal speed), and Quality (good units vs total units). An OEE of 85% is considered world-class.

A document or digital instruction that tells warehouse workers which items to retrieve, from which locations, and in what quantities to fulfill a sales order or work order.

The process of managing a product from initial concept through design, manufacturing, service, and end-of-life. PLM systems track part revisions, BOMs, engineering changes, and design documentation.

Manufacturing where products are produced through chemical reactions, mixing, or other continuous processes (e.g., food, pharmaceuticals, chemicals). Unlike discrete manufacturing, products typically cannot be disassembled.

A formal document sent to a supplier authorizing the purchase of specific goods or services at agreed-upon prices and terms. POs create financial commitments and are matched against receiving documents and invoices.

A formalized system of processes, procedures, and responsibilities for achieving quality policies and objectives. QMS standards include ISO 9001, AS9100 (aerospace), and IATF 16949 (automotive).

A process that authorizes a customer to return a product for repair, replacement, or credit. RMAs track the reason for return, disposition, and resolution.

The practice of tracking and managing changes to product designs, documents, and BOMs over time. Each revision is numbered, dated, and linked to the engineering change that created it.

A security model where system permissions are assigned to roles (e.g., Sales Manager, Warehouse Operator, Finance Admin) rather than individual users. Users inherit permissions from their assigned roles.

A document that records a customer's commitment to purchase goods or services. Sales orders drive fulfillment (picking, packing, shipping), invoicing, and revenue recognition.

The gradual divergence of a database schema from its intended design, typically caused by custom fields, ad-hoc modifications, and per-tenant customizations. Schema drift degrades data quality, complicates upgrades, and undermines audit reliability. Yggdrasil eliminates schema drift by design — no custom fields are permitted.

The management and tracking of manufacturing operations on the production floor, including work order execution, labor reporting, machine utilization, and production output recording.

A unique identifier assigned to a distinct product or variant for inventory management and tracking purposes. SKUs identify specific items by attributes like size, color, and configuration.

A purchasing control that compares three documents before approving payment: the purchase order (what was ordered), the receiving document (what was received), and the vendor invoice (what was billed). Discrepancies are flagged for review.

The tracking of employee work hours, including clock-in/out times, breaks, overtime, and time allocation to projects or work orders. Used for payroll, labor costing, and project billing.

The management of product warranty terms, coverage periods, and claims. Warranty tracking ensures that service requests are handled according to warranty agreements and that expired warranties are flagged.

Inventory that has entered the manufacturing process but is not yet a finished product. WIP represents the value of materials, labor, and overhead that have been invested in partially completed goods.

A document that authorizes the manufacture of a specific quantity of a product. Work orders specify the BOM, routing, required materials, labor, and target completion date.