Introducing Udyamo ERP Lite
Udyamo ERP Lite is an open-source, manufacturing-first Enterprise Resource Planning system built specifically for Indian small and medium businesses. It fills a gap that has persisted for years in the Indian software market: the absence of an affordable, capable ERP that understands the realities of running a 20-to-500-person manufacturing operation in India.
This chapter introduces Udyamo ERP Lite — its purpose, its design philosophy, the modules it provides, and the technology that powers it.
What You Will Learn
- What Udyamo ERP Lite is and the problem it solves
- The technology stack and why it was chosen
- All available modules and what each one covers
- Core design principles that guide the product
- System requirements and deployment options
Prerequisites
Read Chapter 1: What is ERP and Why SMBs Need It and Chapter 2: ERP for Manufacturing for context on ERP concepts and manufacturing workflows.
Why Udyamo ERP Lite Was Built
The Indian manufacturing SMB faces a difficult choice when it comes to ERP software. At one end of the spectrum are enterprise-grade systems like SAP and Oracle, which are powerful but prohibitively expensive and complex for a 50-person factory. At the other end are lightweight invoicing and accounting tools that handle billing and GST but have no understanding of production orders, bills of materials, or job work.
In between, there are a handful of ERP products that attempt to serve SMBs, but many of these are either proprietary (with opaque pricing and vendor lock-in), poorly adapted to Indian tax and compliance requirements, or designed primarily for trading rather than manufacturing.
Udyamo ERP Lite was created to address this gap directly. It is built from the ground up for Indian manufacturing SMBs. Every design decision — from the data model to the user interface — reflects the workflows, compliance requirements, and operational realities of running a factory in India.
The name "Udyamo" derives from the Sanskrit root for enterprise and effort, reflecting the spirit of Indian entrepreneurship that the software aims to serve.
Open Source and the MIT License
Udyamo ERP Lite is released under the MIT License, one of the most permissive open-source licenses available. This means:
- You can use the software for any purpose, including commercial use, at no cost.
- You can modify the source code to suit your specific needs.
- You can distribute the software, with or without modifications.
- There is no vendor lock-in. Your data and your customizations belong to you.
Open source also means transparency. The codebase is available for inspection, which builds trust — particularly important for software that handles financial data and tax compliance.
Technology Stack
Udyamo ERP Lite is built on a modern, proven technology stack chosen for reliability, developer productivity, and ease of deployment.
| Component | Technology | Purpose |
|---|---|---|
| Backend Framework | Ruby on Rails 8 | Application logic, API, server-side rendering |
| Database | PostgreSQL | Transactional data storage with strong integrity guarantees |
| Frontend Interactivity | Hotwire (Turbo + Stimulus) | Responsive, single-page-like experience without heavy JavaScript frameworks |
| CSS Framework | Tailwind CSS | Clean, consistent, and responsive user interface |
| Authentication | Devise | Secure user authentication with session management |
| Authorization | Role-based access control | Roles and role assignments for fine-grained permissions |
Rails 8 was chosen for its convention-over-configuration philosophy, which allows rapid development without sacrificing code quality. PostgreSQL provides the data integrity and transactional guarantees that financial and manufacturing data demands. Hotwire delivers a responsive user experience while keeping the architecture simple — there is no separate frontend application to build, deploy, and maintain.
Module Overview
Udyamo ERP Lite ships with the following integrated modules, covering 49 data models across all major business functions:
| Module | Key Models | Description |
|---|---|---|
| Manufacturing | production_orders, boms, quality_inspections, contractors, job_work_orders | Production planning, BOM management, shop floor tracking, quality control, and subcontracting |
| Inventory | items, locations, stock_ledger_entries, units | Item master data, multi-location stock tracking, unit-of-measure management, and a full stock ledger |
| Sales | customers, invoices, proforma_invoices, sales_orders, payments | Customer management, order-to-invoice lifecycle, proforma invoicing, and payment tracking |
| Purchases | vendors, purchase_orders, bills, payment_batches | Vendor management, purchase order processing, bill recording, and batch payment processing |
| Accounting | accounts, journal_entries, ledger_entries | Chart of accounts, double-entry journal entries, and a complete general ledger |
| Tax | gst_returns, eway_bills, tds_sections | GST return preparation, e-way bill generation, and TDS section management |
| HR | employees, salary_slips | Employee records and payroll with statutory deductions (PF, ESIC, Professional Tax) |
| Assets | assets, asset_categories, depreciation_entries | Fixed asset register, categorization, and automated depreciation calculation |
| Organization | organizations, settings | Company profile, multi-organization support, and system-wide configuration |
| Access Control | roles, role_assignments | Role-based permissions controlling who can view, create, edit, and approve data |
| Audit | activity_logs, audits | Complete audit trail of every create, update, and delete operation |
| Dashboard | financial, inventory, manufacturing, sales tabs | Real-time operational overview across all business functions |
Design Principles
Five principles guide every aspect of Udyamo ERP Lite:
Manufacturing-first. The system is designed around the production order as a central document. BOMs, material consumption, job work, quality inspections, and production costing are first-class features, not afterthoughts bolted onto an invoicing tool.
India-first. GST (with CGST, SGST, and IGST), TDS sections, PF, ESIC, and e-way bills are built into the core data model. The system understands Indian tax rules, Indian financial year conventions (April to March), and Indian document numbering requirements. Amounts are in INR. State codes follow Indian standards.
Simple yet complete. The system aims to cover 90% of what a manufacturing SMB needs without the complexity that makes enterprise ERP systems intimidating. Every screen has a clear purpose. Every workflow has a defined path. There are no hidden configuration labyrinths.
Role-based access. Not everyone should see everything. A shop floor supervisor needs access to production orders and quality inspections. An accountant needs access to the general ledger and GST returns. A sales executive needs access to customers and invoices. Udyamo uses roles and role assignments to ensure each user sees exactly what they need — no more, no less.
Audit trail by default. Every significant action in the system is logged. Activity logs record who did what and when. This is not optional or configurable — it is built into the foundation of the application. For manufacturing SMBs facing audits from tax authorities, customers, or quality certifiers, this traceability is invaluable.
System Requirements
Udyamo ERP Lite is a web application. Users access it through a standard web browser. There is no software to install on individual computers or phones.
Server requirements:
| Component | Minimum | Recommended |
|---|---|---|
| CPU | 2 cores | 4 cores |
| RAM | 2 GB | 4 GB |
| Storage | 20 GB | 50 GB+ (depends on data volume) |
| Operating System | Ubuntu 22.04 LTS or equivalent | Ubuntu 24.04 LTS |
| Ruby | 3.2+ | 3.3+ |
| PostgreSQL | 14+ | 16+ |
Client requirements:
- A modern web browser: Chrome, Firefox, Safari, or Edge (latest two versions)
- Screen resolution of 1280x720 or higher (responsive design supports tablets and phones, but desktop is recommended for data-heavy operations)
- Stable internet connection (for cloud-hosted deployments)
Deployment Options
Udyamo ERP Lite can be deployed in several ways depending on your infrastructure preferences and technical capabilities:
Self-hosted on a VPS or dedicated server. Install the application on a cloud virtual machine (AWS EC2, DigitalOcean Droplet, or any VPS provider) or an on-premises server. This gives full control over data and infrastructure.
Containerized deployment. Use Docker and Docker Compose for a reproducible, isolated deployment. This simplifies setup and makes it easier to manage updates.
Managed hosting. For organizations without in-house IT, managed hosting options (provided by the community or service partners) offer a hands-off deployment experience.
Tip: For most SMBs, a self-hosted deployment on a cloud VPS with 4 GB RAM is sufficient to support 20-50 concurrent users. Start with the smallest viable configuration and scale as your data and user base grow.
Tips & Best Practices
Tip: Take advantage of the demo mode to explore the system before entering real data. Demo mode populates the application with sample data — products, BOMs, customers, vendors, and transactions — so you can experience every module without risk.
Warning: Open source does not mean unsupported. Engage with the community, read the documentation, and consider professional assistance for your initial setup if your team lacks Ruby on Rails experience.
Tip: Enable only the modules you need during initial setup. Udyamo allows you to toggle manufacturing, inventory, and accounting modules independently. Start with what matters most and expand over time.
Quick Reference
| Term | Definition |
|---|---|
| Udyamo ERP Lite | Open-source, manufacturing-first ERP for Indian SMBs |
| MIT License | A permissive open-source license allowing free use, modification, and distribution |
| Rails 8 | Ruby on Rails version 8 — the backend web framework powering Udyamo |
| PostgreSQL | An advanced open-source relational database |
| Hotwire | A Rails-native approach to building responsive web interfaces (Turbo + Stimulus) |
| Tailwind CSS | A utility-first CSS framework for building custom user interfaces |
| Devise | A Ruby on Rails library for authentication (login, logout, password management) |
| Role-based access | A security model where permissions are assigned to roles, and roles are assigned to users |
| Demo mode | A feature that populates the system with sample data for exploration and training |