abhishek pundir

Posted on Apr 12

How We Built a Custom ERP System: Tech Stack & Lessons Learned

#ai #webdev #programming #javascript

Building a custom Enterprise Resource Planning (ERP) system is no small feat. Here's what we learned designing and implementing a scalable, modular ERP platform from scratch.

The Problem We Solved

Most companies start with off-the-shelf ERP solutions like SAP or Oracle. But what happens when your business needs are too specific? What if you need:

Custom workflows unique to your industry
Integration with legacy systems that vendors won't support
Real-time data across distributed teams
The ability to pivot features without vendor locks

We faced this exact challenge. So we built our own. Here's how.

Our Tech Stack

Backend: Node.js + NestJS

We chose Node.js with NestJS as our foundation:

Why?

TypeScript for enterprise-grade type safety
Easy to scale horizontally
Rich ecosystem for business logic
Fast development iteration

// Example: Core business module structure
@Module({
  imports: [DatabaseModule, AuthModule],
  controllers: [InventoryController, OrderController],
  providers: [InventoryService, OrderService],
})
export class BusinessModule {}

Pain point: Event-driven updates across modules became complex. Solution: We implemented a message queue pattern with Bull/Redis.

Database: PostgreSQL + Redis

PostgreSQL for transactional data:

ACID compliance (critical for financial records)
Complex joins for reports
Powerful JSON support for semi-structured data

Redis for caching & real-time features:

Session management
Real-time inventory updates
Rate limiting & queue management

-- Example: Inventory table design
CREATE TABLE inventory (
  id UUID PRIMARY KEY,
  sku VARCHAR(50) UNIQUE NOT NULL,
  quantity_on_hand INT NOT NULL,
  quantity_reserved INT DEFAULT 0,
  last_updated TIMESTAMP,
  warehouse_id UUID REFERENCES warehouses(id)
);

Key lesson: Don't underestimate the importance of indexing. A missing index on warehouse_id caused our inventory queries to take 30+ seconds on 1M+ records.

Frontend: React + TypeScript

Built with:

React Query for server state management
Tailwind CSS for consistent UI
Zustand for client state
Vite for fast bundling

The dashboard handles real-time updates via WebSockets—critical for monitoring inventory, orders, and financials simultaneously.

Infrastructure: Docker + Kubernetes

Containerized everything:

Services run in Docker containers
Orchestrated with Kubernetes
Auto-scaling based on CPU/memory
Separate environments: dev → staging → production

# Example: Kubernetes deployment
apiVersion: apps/v1
kind: Deployment
metadata:
  name: erp-api
spec:
  replicas: 3
  selector:
    matchLabels:
      app: erp-api
  template:
    metadata:
      labels:
        app: erp-api
    spec:
      containers:
      - name: erp-api
        image: vexio/erp-api:latest
        resources:
          limits:
            memory: "512Mi"
            cpu: "500m"

Architecture Decisions

1. Microservices vs Monolith

We started monolithic, then split.

Initially: Everything in one Node.js app—users, inventory, orders, accounting, reporting. Deployment was single-click. But scaling was painful. If inventory got hammered, the entire system degraded.

What changed: We broke it into domain-driven microservices:

User Service (auth, permissions)
Inventory Service (stock, warehouses)
Order Service (sales orders, fulfillment)
Accounting Service (GL, AP, AR)
Reporting Service (BI, analytics)

Each service:

Has its own database (no shared tables)
Communicates via APIs & message queues
Scales independently

Trade-off: More complex to manage, but operational efficiency improved 40%.

2. Event-Driven Communication

Order placed → triggers inventory deduction → triggers accounting entry.

We use Apache Kafka (or RabbitMQ as alternative):

// Example: Order Service publishes event
async createOrder(orderData) {
  const order = await this.db.orders.create(orderData);

  // Publish event for other services
  await this.messageQueue.publish('order.created', {
    orderId: order.id,
    items: order.items,
    customerID: order.customerId
  });

  return order;
}

// Inventory Service subscribes
messageQueue.subscribe('order.created', async (event) => {
  await this.inventoryService.reserveItems(event.items);
});

Benefit: Services are decoupled. A slow accounting service doesn't block order creation.

3. Real-Time Updates with WebSockets

Managers need live dashboards. We use Socket.io for pushing updates:

// Server: When inventory changes
@Injectable()
export class InventoryGateway {
  @WebSocketServer() server: Server;

  async updateInventory(sku: string, quantity: number) {
    await this.inventoryService.update(sku, quantity);

    // Push to all connected clients
    this.server.emit('inventory.updated', {
      sku,
      newQuantity: quantity,
      timestamp: new Date()
    });
  }
}

Biggest Challenges We Faced

1. Data Consistency Across Services

The problem: Order Service reserves inventory, but Inventory Service is temporarily down. Orders process, but inventory never gets updated.

Solution: Saga pattern for distributed transactions.

async function processOrderSaga(order) {
  try {
    // Step 1: Reserve inventory
    const reservation = await inventoryService.reserve(order.items);

    // Step 2: Create accounting entries
    await accountingService.recordSale(order.amount);

    // Step 3: Update order status
    await orderService.markProcessed(order.id);

  } catch (error) {
    // Rollback everything if any step fails
    await inventoryService.releaseReservation(reservation);
    throw error;
  }
}

2. Reporting Performance

Real-time reports across millions of transactions = slow queries.

We implemented:

Read replicas of the database for reporting
Data warehouse (Snowflake/BigQuery) for historical analytics
Materialized views for common reports

-- Materialized view: Monthly sales by region
CREATE MATERIALIZED VIEW sales_by_region_monthly AS
SELECT 
  EXTRACT(YEAR_MONTH FROM order_date) AS month,
  region,
  SUM(amount) AS total_sales,
  COUNT(*) AS order_count
FROM orders
GROUP BY month, region;

-- Refresh every hour
REFRESH MATERIALIZED VIEW CONCURRENTLY sales_by_region_monthly;

3. Permission & Access Control

Complex organizational hierarchies = complex permissions. You can't just hardcode "user can view orders."

Solution: Role-Based Access Control (RBAC) with attribute-based rules:

// Define permissions
{
  role: "regional_manager",
  permissions: [
    { resource: "orders", actions: ["read", "update"], region: "ASIA" },
    { resource: "inventory", actions: ["read"], warehouse: "ANY" }
  ]
}

// Check before returning data
async getOrders(userId, filter) {
  const user = await this.getUser(userId);
  const allowedRegions = user.permissions
    .filter(p => p.resource === 'orders' && p.actions.includes('read'))
    .map(p => p.region);

  return db.orders.find({ region: { $in: allowedRegions } });
}

Key Lessons Learned

1. Start Simple, Evolve Gradually

Don't architect for Netflix-scale on day one. We spent months on infrastructure we didn't need. MVP first, optimize later.

2. Database Design is Everything

A single missing index or poorly designed schema cascades into system-wide performance issues. Invest time upfront.

3. Logging & Monitoring Are Non-Negotiable

When something breaks in production (and it will), you need to know why. We use:

ELK Stack (Elasticsearch, Logstash, Kibana) for centralized logging
Prometheus + Grafana for metrics
Sentry for error tracking

4. Documentation Saves Time

When you have 5+ services, teams need to understand:

API contracts (OpenAPI/Swagger)
Database schemas
Event formats
Deployment procedures

We use AsyncAPI for documenting message-driven events.

5. Testing is Critical

Unit tests catch logic bugs. But integration tests prevent system-wide failures:

// Integration test: Verify order → inventory → accounting flow
it('should create order and update all services', async () => {
  const order = await orderService.create(testOrder);

  // Verify inventory was reserved
  const inventory = await inventoryService.getReservation(order.id);
  expect(inventory.quantity).toBe(-10);

  // Verify accounting recorded the transaction
  const ledger = await accountingService.getEntries(order.id);
  expect(ledger).toHaveLength(2); // Debit + Credit
});

What We'd Do Differently

Invest in API design early - Changing contracts across services is painful
Build observability from day one - Don't add monitoring after things break
Use events for everything - Even internal service calls; makes debugging easier
Separate read & write models - CQRS pattern simplifies complex domains

The Result

Today, our ERP system handles:

50+ integrated modules (Inventory, Accounting, HR, CRM, etc.)
10M+ transactions/day across multiple regions
99.95% uptime (we're still chasing 99.99%)
Sub-200ms API response times (p95)

But more importantly: it's maintainable. New features take weeks, not months. Teams can own their own services. We can scale components independently.

Why This Matters

Building a custom ERP isn't for everyone. But if your business has unique needs—complex workflows, legacy integrations, specific compliance requirements—an off-the-shelf solution will constrain you.

At Vexio, we specialize in helping companies design and build custom ERP systems that actually fit their business. We've learned these lessons so you don't have to. Whether you need a full ERP build, integrations with existing systems, or help modernizing legacy infrastructure, we understand the technical and business challenges.

If you're building or planning an ERP system, check out how Vexio can help with enterprise solutions.

Questions?

Have you built custom enterprise systems? What was your biggest challenge?

Drop a comment below or reach out if you want to discuss ERP architecture, tech choices, or lessons learned.

Looking to Build or Upgrade Your ERP System?

If your company is considering a custom ERP, enterprise platform, or e-commerce solution, Vexio has the expertise to guide you through the technical decisions and architecture challenges we've covered here.

Visit Vexio → to explore our ERP, e-commerce, and enterprise solutions.

Resources:

DEV Community