ERP glossary: all the key terms to run your SME

An ERP is business management software that centralizes all of a company's data and processes in a single shared database. It connects every department (production, sales, purchasing, logistics, finance, HR) so that each team works from one single, reliable, real-time source of information.

For a manufacturing SME: the ERP replaces scattered spreadsheets, isolated business applications and repeated data entry. It provides an overall view of the business and enables faster, better-informed decisions.

PGI is the French term for ERP (Enterprise Resource Planning). Both terms refer to the same thing: a single software package that integrates all of a company's management modules into one consistent system.

Good to know: the term PGI often appears in French public tenders. In everyday practice, however, professionals overwhelmingly use the acronym ERP.

SaaS is a software delivery model in which the application is hosted in the cloud and accessed through a web browser. Users generally pay a subscription rather than a perpetual license, and do not have to manage updates or server infrastructure.

For an SME: SaaS reduces infrastructure costs but depends on the internet connection. Some ERPs, such as Synoptic, can also be deployed on-premise depending on your constraints.

EDI makes it possible to exchange business and logistics documents (purchase orders, shipping notices, invoices…) automatically between computer systems, with no human intervention and no paper. The data is structured according to standardized formats (EDIFACT, XML, JSON…).

In practice: a customer sends you an order via EDI, your ERP receives it and automatically creates the manufacturing order. You save time and eliminate re-keying errors.

Electronic document management covers all the tools used to create, store, classify, search and share digital documents (quotes, delivery notes, invoices, technical data sheets, drawings…) directly from your management software.

In an ERP: each document is linked to its context (customer order, project file, supplier), so there is no need to search through shared folders or print paper copies for archiving.

An API is a protocol that allows two different software applications to communicate and exchange data automatically. APIs are what allow an ERP to connect to an online store, accounting software, a mobile app or any third-party tool.

Example: Synoptic ERP connects to Sage for accounting via API, which eliminates any re-keying between the two systems.

A workflow is the digital model of a business process: who does what, in what order and under what conditions. It orchestrates tasks, approvals and notifications between the various people involved in a process, with no manual intervention.

Example in an SME: a purchase requisition is created, the manager approves it, the purchase order is automatically sent to the supplier and accounting is notified. All without emails or manual follow-ups.

Computer-aided production management brings together all the features used to plan, schedule, launch and track industrial production. It covers manufacturing orders, bills of materials, routings, machine loads and lead times.

Added value: production management integrated into the ERP instantly connects customer orders to the shop floor, prevents component shortages and helps you meet the delivery dates you promised.

MRP automatically calculates raw material and component requirements based on the production plan and stock levels. It generates replenishment and manufacturing order proposals to cover requirements on time.

In practice: you have 50 orders to deliver within 3 weeks. MRP analyzes the bills of materials, available stock and supplier lead times, then tells you exactly what to order and when to start production.

The manufacturing order is the internal document that triggers and governs the production of an item. It specifies the quantity to produce, the operations to perform (routing), the materials to consume (bill of materials), the resources involved and the expected lead times.

In the ERP: the manufacturing order is generated automatically from a customer order or from MRP. Its progress is tracked in real time, from the shop floor to the office.

The bill of materials is the complete, structured list of all the components, sub-assemblies and raw materials needed to manufacture a finished product. It can have several levels and include scrap factors.

Why it matters: a well-maintained bill of materials in the ERP guarantees reliable MRP calculations, accurate cost price evaluation and full lot traceability.

The routing describes the ordered sequence of operations required to manufacture an item: machining, assembly, inspection, packaging… For each operation, it specifies the work center, the unit time and the resources involved.

What it is used for: the routing is the basis for calculating shop floor load and building the production schedule. It also makes it possible to calculate the industrial cost price operation by operation.

The MES controls the shop floor in real time: tracking manufacturing order progress, operator time logging, machine data collection, and management of scrap and on-site non-conformances.

MES vs production management: production management plans and prepares production from the office, while the MES executes it and feeds shop floor data back in real time. The two complement each other in an advanced manufacturing ERP.

OEE measures the overall performance of a piece of equipment by combining three factors: availability (breakdowns, stoppages), performance (actual vs. theoretical rate) and quality (good parts vs. parts produced). An OEE of 100% represents perfect production.

BI use: by feeding shop floor data into the ERP, OEE can be calculated automatically and displayed in dashboards to identify the main sources of productivity gains.

Load is the total amount of work planned on a resource (machine, work station, operator) over a given period. Capacity is the maximum volume that resource can handle. Balancing load and capacity is a central challenge of industrial management.

In the ERP: the load chart shows upcoming overloads and underloads, so you can anticipate the need for overtime or subcontracting.

Project-based management (job costing) means tracking all the costs (materials, hours, subcontracting) and revenues associated with a specific project or order. It makes it possible to calculate the actual profitability of each project and to manage margins in real time.

Ideal for: companies that manufacture to order (special machinery, signage, metalwork) where each project has its own specifications and its own budget.

CRM brings together the tools used to manage and optimize relationships with customers and prospects: tracking sales opportunities, contact history, quote management, sales pipeline management and performance analysis.

CRM integrated into the ERP: unlike a standalone CRM, Synoptic's CRM is connected to production, inventory and invoicing. Sales reps see product availability, realistic lead times and the full customer history in real time.

The sales pipeline represents how opportunities progress from first contact to signed order. Each stage (prospect → qualification → quote → negotiation → won/lost) helps estimate forecast revenue.

In Synoptic CRM: the pipeline gives the sales director and the sales team a consolidated view of all ongoing deals.

A quote is a priced proposal sent to a customer or prospect. In the ERP, it is generated from price lists, bills of materials and cost prices. It is converted into a customer order in one click, with no re-keying.

In the ERP: the quote can automatically include negotiated prices, payment terms and manufacturing lead times taken from the production plan.

The delivery note accompanies each shipment and lists the items delivered (type, quantity, references). It is generated automatically from the customer order and triggers the stock issue in the ERP.

Flow in the ERP: order → picking → delivery note → shipment → invoicing. Each step automatically updates the stock and the customer account.

After-sales service covers all operations carried out after the sale: handling complaints, repairs, replacements, warranty tracking and on-site interventions. In the ERP, each after-sales case is linked to the product's complete manufacturing history.

Traceability advantage: the service technician has immediate access to the lot number, manufacturing date and materials used, which greatly speeds up diagnosis.

A purchase requisition is an internal request sent to the purchasing department to procure an item or service. It can be generated automatically by MRP or created manually. It must be approved before being converted into a supplier purchase order.

In the Synoptic workflow: the requisition moves electronically between the requester, the manager and the buyer, with approval at each step and full traceability.

The supplier purchase order is the contractual document by which the company commits to buying a defined quantity of an item at an agreed price and lead time. It is generated from the ERP and can be sent via EDI, email or a supplier portal.

Tracking: the ERP lets you track order acknowledgments, confirmed delivery dates and any supplier delays in real time.

The net requirements calculation is the core engine of MRP. Based on sales forecasts, firm orders, available stock and work in progress, it calculates exactly what is missing and generates procurement or manufacturing proposals.

Result: supplier order and manufacturing order proposals, with the right quantities and the right dates, to meet demand without overstocking.

Supplier invoice digitization means capturing paper or PDF invoices, automatically extracting their data (OCR) and matching them against purchase orders and goods receipts in the ERP, with no manual re-keying.

Tangible gain: invoice processing time drops from several days to a few hours, data entry errors are eliminated and supplier payment terms are better controlled.

A WMS is software dedicated to the physical management of the warehouse: receiving goods, putaway to storage locations, order picking, shipping and inventory counts. It can be integrated into the ERP or run alongside it through an interface.

In Synoptic: inventory and warehouse management is natively integrated into the ERP, which avoids discrepancies between the sales system and what is actually happening in the warehouse.

The FIFO method consists of issuing the oldest items from stock first. It is both a physical warehouse management rule and an accounting method for inventory valuation.

Mandatory: for food, pharmaceutical and any products with a use-by date. The ERP manages FIFO rotation automatically thanks to lot numbers and receipt dates.

The FEFO method consists of issuing first the items whose expiry date is closest, regardless of when they entered stock.

Sectors concerned: food, pharmaceuticals, cosmetics. The ERP automatically selects FEFO lots when preparing customer orders and manufacturing orders.

Picking is the operation of taking items from their storage locations to prepare a customer order or a shop floor supply. The ERP generates picking lists optimized by location to minimize travel.

Efficiency: with an ERP connected to terminals or scanners, picking is guided step by step, which reduces preparation errors and speeds up shipments.

Safety stock is a minimum quantity kept on hand at all times to absorb uncertainties: supplier delays, unexpected demand, changes in consumption. It is calculated from the variability of lead times and consumption.

In the ERP: safety stock is an item parameter that automatically triggers a replenishment proposal as soon as the available level falls below the defined threshold.

Shipping management covers delivery route planning, packing, the printing of transport documents (delivery notes, CMR consignment notes, carrier labels) and tracking deliveries all the way to the customer.

ERP integration: shipments are created directly from approved customer orders, which automatically triggers stock issues, invoicing and carrier notifications.

Traceability means being able to reconstruct a product's complete history: which raw materials (lots, suppliers), which manufacturing operations, which operators and which inspections contributed to its production, and to which customers it was delivered.

Regulatory requirement: essential in the food, pharmaceutical and healthcare industries. In the event of a product recall, the ERP identifies all affected lots and the customers to notify within minutes.

A non-conformance is a deviation between a product or process and the defined requirements (specifications, standard, customer requirement). Managing non-conformances in the ERP makes it possible to record, analyze and handle these deviations and prevent them from recurring.

Quality flow: detection → non-conformance record → root cause analysis → corrective action plan → closure. Everything is traced and logged in the ERP.

A lot number identifies a set of products manufactured under the same conditions. A serial number identifies one unique product. These identifiers are the key to upstream and downstream traceability in the ERP.

Downstream traceability: which customer received lot no. X? Upstream traceability: which raw materials were used to make this lot, and which supplier did they come from?

ISO standards define requirements for quality management systems. ISO 9001 is the general-purpose standard; ISO 13485 applies to medical devices. The ERP makes it easier to comply with these standards by ensuring traceability, document management and process control.

Easier audits: the quality records required during certification audits are instantly available from the ERP.

Business Intelligence refers to all the tools and methods used to collect, consolidate, analyze and visualize company data to support decision-making. Dashboards, charts and key performance indicators are its most common forms.

In Synoptic: BI is fed in real time by all ERP data (production, sales, inventory, purchasing) and accessible through MyReport for custom analyses without relying on the IT department.

A KPI is a quantified measure used to assess the performance of an activity against a set target. In an ERP, KPIs are calculated automatically from operational data and displayed in dashboards.

Examples: customer service level (on-time deliveries), after-sales return rate, average manufacturing lead time, inventory turnover, gross margin by product family.

The cost price is the sum of all costs incurred to produce an item: raw materials, direct labor, subcontracting, machine costs and a share of overheads. Keeping it under control is essential to setting a profitable selling price.

In the ERP: the standard cost price is calculated from the bill of materials and the routing; the actual cost is calculated once the manufacturing order is complete, by comparing actual consumption and logged times.

The interface between Synoptic ERP and Sage provides complete accounting management: general and cost accounting, cash management, fixed assets, and automated journal entries from business documents (customer and supplier invoices, goods receipts…).

Advantage: data entered in the ERP automatically feeds the accounts with no re-keying, ensuring consistency and saving time for the CFO.

Cost accounting (also called analytical accounting) consists of allocating costs and revenues along defined dimensions (cost center, project, job, product, sector…) to calculate profitability by activity rather than only at company level.

Example: an SME wants to know which product line is truly profitable. Cost accounting assigns each cost to the right product line to calculate a reliable net margin by activity.

An HRIS brings together the digital tools that manage all HR processes: employee records, payroll, leave and absences, expense reports, recruitment, training and performance reviews. It centralizes HR data and automates repetitive administrative tasks.

Synoriel: Synoptic connects to Synoriel, the Proges Plus group's HRIS, for complete HR management linked to the production ERP.

Configuration means setting up an ERP to fit a company's processes, terminology and requirements, without touching the source code. It covers screens, forms, business rules, documents and access rights.

Synoptic: the ERP is built around a highly configurable standard core, which allows it to be finely adapted to each industry (metalworking, food, healthcare…).

ROI (Return on Investment) measures the ratio between the benefits generated by an investment and its total cost. For an ERP, it is assessed by comparing the gains achieved (productivity, lower inventory, fewer errors, better margins…) with the cost of the project (licenses, implementation, training, maintenance).

Good to know: the gains from an ERP affect several functions at once. Manufacturing SMEs generally see a significant ROI within 2 to 4 years of deployment.