ERP for Process Manufacturing: Buyer’s Guide- Part 1

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The implementation of an Enterprise Resource Planning (ERP) system to streamline and automate business processes is a strategic investment for any organization. Buying the right system as per your needs and choosing the best partner for implementation is critical to your success. This Buyer’s Guide is specially designed for process manufacturers to help them identify their unique organizational needs, understand what ERP systems can do for their business, recognize the most appropriate ERP software by comparing various product alternates, and effectively communicate their requirements to the consultants for a smooth implementation journey.

What actually is Process Manufacturing?
Production that adds value by mixing, separating, forming, and/or performing chemical reactions is called Process Manufacturing. It is a step-wise execution of continuous operations that rely on sophisticated tracking and scheduling mechanisms to keep operations running at peak efficiency. Process manufacturing uses formulations or recipes to obtain a final product from one or many intermediate materials, co-products and by-products. Therefore, the output obtained is a product, which once produced, cannot be broken back down into its component parts. Process manufacturing is employed along with planning, procurement, and setting the manufacturing equipment for better controlled processes.

There are various segments of process manufacturing such as: food and beverages, paints and coatings, specialty chemicals, personal care and cosmetics, and pharmaceutical/biotech industries. The needs and challenges are unique and specific to each segment based on their nature of operations, availability of raw materials, and prevailing market competition.

Business Challenges
In general, any manufacturing business demands:

  • Consistently acceptable quality
  • Periodic innovation for wide variety of options, and
  • Sustainable competitive advantage to overcome global competition

But that’s not all…
A process manufacturing business has to face a lot more:
Globally the manufacturing sector is undergoing tremendous growth and with such rapid advancements, manufacturing will soon be the future of everything. Due to the vast scope of growth in the sector, every second business is turning out to be your competitor. This competition has gone so fierce that you not only need a proactive sales and marketing team, but also an efficient system to encounter the everyday challenges. Some of the most common challenges faced by a process manufacturer are:

  • Difficulty in co-ordinating and tracking third party manufacturing
  • Stringent regulatory issues and environmental concerns
  • The imbalance in demand and supply matrix
  • Managing the contours of supply chain dynamics
  • Regulating the bulk inventory
  • Fighting with traceability and recalls
  • Overcoming the planning, scheduling, and forecasting blues
  • Suffocating due to cost and margin pressure
  • Striving to achieve the desired customization
  • Headache of data management
  • Drowning due to the burden of GST guidelines

What’s the Solution?
In order to survive in the current scenario, you must practice instant innovation, fast decision making, accessing real-time visibility, superior inventory management, up-to-date finance, costing and traceability, etc. Need of the hour is to capitalize on this fast changing economic tide by managing all your critical resources, reducing cost of production, streamlining processes, improving customer responsiveness, and exceeding a variety of other industry challenges. All this can be achieved by an Enterprise Resource Planning (ERP) software.

What is an ERP for Process Manufacturing?
ERP is an integrated information management solution that facilitates the flow of information between functional modules in an organization. It includes a fully functional module set for enterprise-wide database to support business activities, such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource, project management, and inventory management, to retrieve, process, and/or store information in a real-time environment. Besides enabling automation of business processes, ERP fosters better information accessibility, and improved operational efficiencies.

Why a separate ERP for Process Manufacturing?
Both discrete as well as process manufacturing have different set of needs which cannot be fulfilled through one single software. Hence, a process manufacturing ERP has become the need of the hour. Its distinct features such as formula management and unit of measure conversion – both of which are an integral and indispensable part of the process manufacturing – help process manufacturers meet their production needs. In addition, a dedicated ERP for process manufacturers provides the manufacturers with the capability for physical property analysis, density calculations, batch processing, regulatory compliances, etc., among many.

Key benefits of ERP
ERP brings the experience of enhanced manufacturing processes and allows you to stand tall with competitive advantages. Here is the list of few out of many advantages of having an ERP:

  • Reduce cost by streamlining operations
  • Granular-level accurate product costing
  • Availability of the right material at right time
  • Support to contract manufacturing and loan licensing
  • Improved product quality
  • Faster time to market
  • Reduced non-conformance risk
  • Respond quickly to customer needs

Part 1 of this guide discusses the foundational requirements any process manufacturer deals with, but there is more that any business owner should know about a process manufacturing ERP. Hold on and wait for more in the Part 2 of this blog. Meanwhile, you can also go through a white paper by industry experts of BatchMaster on ERP software selection guide for small businesses