QuickBooks to ERPNext for a Steel Pipe Manufacturer: Metro Tech Pipe Industries

The business

Metro Tech has worked in steel pipe since 1995. The group began as Metro Tec Engineering and later set up Metro Tech Pipe Industries to manufacture ERW pipes from ½ inch to 12 inches. Steel coil is slit into strips, and each strip is formed and welded into pipe.

Why QuickBooks and a standard ERP both fall short

Neither QuickBooks nor standard ERPNext describes how a pipe is sold, because one item has three measures:

1. Stock is counted in pieces. The store issues 200 pipes, not 1,900 kg.
2. The price is quoted per kilogram or per foot. The customer agrees a rate per kg, and the same pipe can be sold by length to another customer.
3. The truck is weighed. A pipe's real weight differs a little from its calculated weight, and a large difference means the wrong thickness was loaded.

ERPNext gives an item one stock unit and one rate. Without changes, the sales team works out every line on a calculator, and nobody compares the weight that left with the weight that was invoiced.

What we built

1. Rate per kg or per foot on every line (custom): the user picks the unit and types the agreed rate. ERPNext works out the price per piece, on quotations, sales orders, delivery notes, invoices and the same documents on the buying side.
2. Calculated weight for every pipe (custom): the weight comes from the pipe's thickness, strip width and length. A 1 inch pipe, 2 mm thick and 20 feet long, is made from a 101 mm strip and weighs 9.54 kg. Each size, thickness and length is its own item, named and barcoded from those measurements.
3. Scale check before stock moves (custom): the weight from the scale is entered on each delivery, receipt and stock entry. If it is missing, or differs from the calculated weight by more than the tolerance, the document can't be submitted. In the example above a 3% tolerance accepts 9.25 to 9.83 kg per pipe.
4. Weighbridge check on the whole vehicle (custom): the loaded weight less the empty weight is compared with the total calculated weight of everything on the truck.
5. Invoice on the weight that was weighed (custom): on a delivery sold by weight, the amount is the rate times the scale weight, not the calculated one.
6. Override with a record (custom): one role may approve a delivery outside the tolerance. The difference and the approver's name are written on the document.
7. Stock by weight as well as pieces (custom): a pipe stock ledger and a stock summary per warehouse show pieces, calculated weight and scale weight side by side.
8. Pre-quotations (custom): a working draft that sales staff price and revise, then turn into a quotation with one button.
9. Charges and tax prints: loading, cutting and transport charges on the invoice go to their own accounts, and sales tax invoices print the registration numbers of both parties.

Slitting a coil into strips and strips into pipes doesn't fit a standard bill of materials, because the yield depends on the coil's width and weight. We left that calculation outside the system and record production with standard manufacturing entries. Custom code went only where the daily work needed it.

What changed after the first version

The first weight check, in 2019, used one formula and a fixed 3% for every pipe. From 2021 the formula and the tolerance are set on each item, as a percentage or a fixed weight, lines sold by length skip the check, and a manager can approve an exception. Expect the first version of a rule like this to change once people work with it.

Nine versions on

Frappe supports only the two latest ERPNext versions, so a system that isn't upgraded falls out of support. Metro Tech has moved up from version 6 to version 15 with the same partner.

What that has taught us:

1. Custom code is what breaks. Standard ERPNext upgrades itself; the weight logic has to be tested on each new version. After one move in January 2023, delivery notes would not save because the calculated weight came out as zero. It was reported and fixed the same day.
2. Not every move is an in-place upgrade. That 2023 move went to a new site: master data and opening balances were loaded fresh. When an old system has years of clutter, this is the cleaner route.
3. Customisations should shrink over time. On version 15 we removed custom fields and print formats that were no longer needed.

Their Technical Support Team always keeps our concerns as their priority.

On an older version yourself? See ERPNext support and upgrades. Moving off QuickBooks? See how a fixed-scope ERPNext implementation runs.

Result

1. Pipes sold at a rate per kg or per foot, with the price per piece worked out by ERPNext.
2. Every delivery and receipt checked against its calculated weight before stock moves.
3. One system kept current from version 6 to version 15.