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ERP for machinery and plant engineering: what matters for project costing, bills of materials and engineering change
For machinery and plant engineering companies, four things decide: project costing that runs on the same data from quotation to post-calculation, multi-level bills of materials that may keep growing during the order, engineering change management that reaches orders already in progress, and a bridge to CAD and PDM. Whatever the standard cannot carry becomes custom development later – with all the consequences for maintenance and release upgrades.
- (EU) 2023/1230
- Machinery Regulation from 20 January 2027
- Since 1992
- Vendor-neutral, independent
- DACH
- Germany, Austria, Switzerland
Selected clients from more than 30 years
What is different in machinery and plant engineering
Every order is a project. The bill of materials grows with it.
A supplier makes the same part in series; a machinery and plant engineering company builds something of its own for every customer. The quotation is written before the design is finished, the bill of materials keeps growing during production, and months often lie between order and acceptance. The contribution margin of a project is therefore not decided in accounting, but in the costing that carries the quotation.
Then there is engineering change management. Every design change hits orders that are already in purchasing or production, and parts that have already been ordered. And after delivery the second business begins: spare parts and service for machines whose exact configuration you still need to know years later.
A reliable selection therefore does not start with a vendor comparison, but with the question of how your projects are costed, designed and changed. How we build this in vendor-neutral ERP consulting, and why process analysis comes before the system question, follows from this order.
Walk through your costing and BOM logic with us →Where it goes wrong in this industry
Four failure patterns we see again and again in machinery and plant engineering.
Post-calculation comes after the project
Costing happens in the quotation, booking happens in production, comparison happens after acceptance. Whether a project makes money is known when nothing can be changed any more. What the standard has to deliver: pre-, interim and post-calculation per project on the same structure, with actual costs from purchasing, production and assembly during the project.
Engineering and production work from different BOMs
The engineering BOM in CAD is structured by assemblies; production needs it by operations and procurement. If the conversion is done by hand, every machine brings new errors. What the standard has to deliver: multi-level BOMs imported from CAD and PDM, conversion into the manufacturing BOM, and BOMs that may be extended within the order.
The change never reaches the running order
Engineering changes a component, but the purchase order with the supplier carries on, and assembly builds to the old revision. The cost of the change appears in no costing. What the standard has to deliver: engineering change management with change index and validity that shows affected orders, purchase orders and stock before the change is released.
The quotation is built in five systems
Product, price and configuration data sits in ERP, CAD/PLM, CRM and Excel and is entered several times. At a machinery and plant engineering company with 250 employees we measured 21 process steps up to the sent quotation, five points of duplicate entry and 5–7 hours per quotation. What the standard has to deliver: one data source for product, price and configuration from which quotation, order and BOM are created.
Which systems the industry uses
Three system classes, three prices – no winner.
Each class solves the four requirements in a different place. The table describes where – and what you accept in return.
| System class | Where the industry logic sits | What speaks for it | The price |
|---|---|---|---|
| Industry ERP for machinery and plant engineering | In the core of the system. Project structure, project costing, multi-level BOMs and engineering change are master data and functions, not extra fields. | Shortest route from quotation to post-calculation. CAD integration, order-specific BOMs and service for the installed base are built into the standard. | Smaller vendor, smaller market for partners and staff. Group finance and international roll-outs often weaker. High switching costs because project and BOM logic are not portable. |
| Standard ERP with industry add-on | In a partner's add-on on a broad base system. | Broad ecosystem, strong finance, staff available. Project depth where the add-on brings it. | Two release cycles that can drift apart. Dependence on the add-on partner. The depth of project costing and engineering change varies widely and must be tested against your own projects. |
| Generalist ERP without industry focus | In custom development or in connected specialist systems such as PDM, project management and configurator. | Greatest freedom of design. Fits group standards. Lowest entry barrier for standard machines with little order-specific engineering. | Project costing, BOM conversion and engineering change are built in-house or connected through interfaces – and maintained in-house. Every release of the base system tests this custom development again. |
What the table cannot decide: how much engineering each order needs, how many levels your BOMs have, how often an order still changes after release and how much revenue service and spare parts bring. These four answers decide the selection – and none of them is in a data sheet. For the assessment in the project we draw on our database of around 500 software vendors – vendor-neutral, without commission.
From our projects · Plant engineering, Karlsruhe
INERATEC: container plants for e-fuels, one continuous process from engineering to finance.
INERATEC was founded in 2016 as a spin-off of the Karlsruhe Institute of Technology and builds modular power-to-liquid plants in containers that produce synthetic fuels from CO₂ and hydrogen – with projects in the Netherlands, in Chile and at Industriepark Höchst, around 100 employees and more than 30 customers worldwide.
The problem
The IT structures from the start-up phase could no longer support the growth: fragmented data silos between engineering, production and finance without continuous process integration, and little transparency on costs and resources per project.
What we did
Read the plant engineering reference →
Dreher worked in three phases:
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documented 14 core processes with 67 sub-processes across engineering, project management, supply chain and finance
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simplified the processes with a first-principles approach, removed redundant approval loops and standardised the BOM logic
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wrote a requirements specification with 124 weighted requirements and ran a market analysis of six ERP vendors
−35%
Administrative lead time for project set-up
per reference
124
Weighted requirements in the specification
per reference
Independence
No licences sold, no vendor commission. Our fee is the same whichever system is chosen in the end.
Frequently asked questions
Frequently asked questions about ERP in machinery and plant engineering.
Ten questions managing directors in machinery and plant engineering ask us before an ERP decision – on project costing, bills of materials, engineering change, service, the Machinery Regulation, duration and cost.
Your contact
Dr. Harald Dreher
Managing Director & Owner · Dreher Consulting
Since 1992, Harald Dreher has supported machinery and plant engineering companies in the DACH Mittelstand with ERP decisions – vendor-neutral, without selling licences. In a 30-minute conversation he assesses which system class fits your projects, your bills of materials and your volume of engineering change, and where a selection is not needed at all.
LinkedIn · Book 30 minutes with Dr Dreher →
Last updated: 7 October 2026
1. Which ERP system is right for machinery and plant engineering?
The ERP system that carries project costing, multi-level bills of materials, engineering change management and the connection to CAD and PDM in the standard – not as customisation. Three system classes do this in different ways. An industry ERP for machinery and plant engineering brings project structure, order-specific BOMs and engineering change; the price is a smaller vendor and partner market. A standard ERP with an industry add-on combines a broad base system with a partner's project logic; the price is two release cycles and dependence on that one partner. A generalist ERP gives the greatest freedom, but requires costing, BOM conversion and engineering change to be built or connected. Which class fits is decided by four answers from your business: engineering share per order, BOM depth, frequency of change and service business.
2. What makes machinery and plant engineering different from series production?
Series production builds the same part again and again; bill of materials and routing exist before the order arrives. In machinery and plant engineering a large part of the product only comes into being with the order: the quotation is costed before the design is finished, the BOM grows during production, and assembly and commissioning often take place at the customer's site. The ERP therefore has to think in projects, not just in production orders: with project structure, milestones, down payments and partial invoices. Many companies have both, for example standard assemblies in series and customer-specific plants on top. Then the ERP has to show that both logics come together in one project.
3. How does project costing work in an ERP?
As one continuous calculation on a single structure: pre-calculation carries the quotation, interim costing compares planned and actual costs from purchasing, production, assembly and engineering during the project, and post-calculation shows at the end what the project earned. What matters is that all three calculate on the same items and cost types, otherwise the variance cannot be explained. Down payments, partial invoices and the valuation of work in progress belong here too. In the proof of concept, test with one of your own completed projects whether the system shows the variances traceably – not with the vendor's demo project.
4. What does an ERP have to deliver for multi-level bills of materials?
It has to hold BOMs across many levels – plant, assembly, sub-assembly, single part – and map the path from the engineering to the manufacturing BOM. Engineering structures by function, production by operations and procurement; the ERP has to know both and make the conversion traceable. In plant engineering, BOMs also keep growing within the order: parts are ordered before the last assembly is designed. The system must therefore allow provisional items, procure long-lead parts early and still show at any time which revision applies to which order.
5. How does an ERP handle engineering change management?
Through an engineering change process with change request, change index and validity. Before a change is released, the system has to show which orders, open purchase orders and stock it affects – and what it costs. After release, the new revision must reach production, purchasing and assembly, and the old revision must stay documented for machines already delivered. Without this logic, the purchase order carries on to the old revision, assembly builds what engineering has discarded, and the cost of the change appears in no costing. In the proof of concept, test a real change to a running order.
6. How do you connect CAD, PDM and ERP?
Through clear ownership and an interface that transfers releases, not files. Engineering holds the geometry and the engineering BOM in CAD and PDM; the ERP holds the manufacturing BOM with routing, material and cost. What matters is when a revision is released, who transfers it and how a change index affects running orders. At INERATEC, standardising the BOM logic between engineering and production was part of the process optimisation – before the system selection, not after it. Anyone who only clarifies the interface in the implementation project clarifies it under deadline pressure.
7. What does the new EU Machinery Regulation mean for the ERP?
From 20 January 2027 the Machinery Regulation (EU) 2023/1230 applies and replaces the Machinery Directive 2006/42/EC. It still requires technical documentation for each machine and allows the instructions to be provided in digital form. For the ERP this means every delivered machine must be clearly linked to its configuration, its revision and its documentation – via serial number and installed base. Anyone who today reconstructs the configuration of a delivered machine from folders and emails should put this link into the requirements. The regulation governs the safety of the machine, not the ERP; but the ERP has to find the evidence.
8. How important are service and spare parts for the ERP selection?
Often more important than the requirements specification suggests. After delivery the second business begins with spare parts, maintenance, conversions and modernisation, and it depends on a single question: what configuration does the machine at the customer have today? The ERP must hold every delivered machine with serial number, BOM and later changes as installed base, book service orders against it and assign spare parts unambiguously. Without that, every service call starts with searching. Include your most frequent service case as a test case in the proof of concept.
9. How long does an ERP selection take in machinery and plant engineering?
In our experience an ERP selection usually takes three to four months. The time does not go into comparing systems, but into process analysis and the requirements specification: project costing, BOMs, engineering change, CAD integration, service. At INERATEC this produced 124 weighted requirements against which six ERP vendors were measured. Only once these cases are described can a vendor show in a proof of concept how its system works with your data – and not with its demo data.
10. What does independent ERP consulting cost a machinery and plant engineering company?
The effort depends on the number of processes, sites and lines of business, not on company size alone. A manufacturer of standard machines has fewer ERP-relevant processes than a plant engineering company with order-specific design, international assembly and its own service business. We therefore price each stage separately – process analysis, requirements specification, market analysis, selection with proof of concept – and fix its scope before it starts. You can stop, continue or adjust the scope after each stage. Our fee is independent of the system you choose in the end: we do not sell licences and receive no vendor commission.
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