Paints and coatings industry is now rolling up sleeves and getting proactive to adopt ERP. More and more paint manufacturers are now realizing the benefits an ERP can bring to their business. With the availability of industry-specific ERPs, the implementation time and cost have drastically slashed. While the probability of there being a perfect-fit has increased.
A general look at the overall industry suggests that:
a) It’s a completely raw material intensive industry: With a large number of ingredients, major being petroleum based imported products that contribute to being the half of the total ingredients. Other being ingredients like titanium oxide, phthalic anhydride, etc. that add up to make the 50% of the total cost.
b) Highly Regulated Industry: Because of the effects it has on the environment as a result of emission of industrial Volatile Organic Compound (VOC). When exposed to sunlight, these VOCs contributed to the formation of tropospheric (lower atmosphere) ozone.
c) Has Mixed Mode Needs: The industry is both process-manufacturing on the industrial side but at the retail side, it has OTC products. A large number of different variations of packaging are required both in bulk and in small packs.
It is an overall a complex as well as dynamic industry with its unique share of needs and characteristics:
Formulation: Paint manufacturers have to continuously innovate to stand up to customer’s expectation, regulation demands, and technological advances. Contrary to a catalogue being used for color selection in past, today’s customer always look for “new” leaving manufacturers with no choice but to continually come up with thousands of custom-mixed shades in different bases and finishes. On-going R&D and formulation thus become important. Resulting in:
- Unlimited formulations
- Use of varied new and eco-friendly ingredients
- Rigorous R&D to meet customer needs
- Continuous recalculation to meet low VOC
- Multiple packaging
Certain ERPs have intensive Formula Management module. Hundreds, maybe thousands, of formulas and their versions can be created, maintained, retrieved or archived. ERP’s ability to perform in-depth physical property analysis accelerates innovation. They even allow managing multiple BOMs for a single formula thereby supporting multiple packaging of a finished good.
Batch Processing: Paint manufacturers have typical batch processing needs. From simple, single vessel, single product manufacturing to complex multi-path, multi-vessel, multi-product manufacturing. Last minute material substitutions or batch sizing to meet variation in customer demand is common. Moreover, proper routing of material is as essential too. ERP’s batch processing abilities can be leveraged to simplify production operations and optimize plant capacity. ERP can support the complete production cycle from batch creation, allocation, sizing, issue, quality analysis to closure. The router items taken during production and the labor involved in same can be automatically calculated, giving not just more productivity but better quality products too.
Multiple Units of Measure: Multiple units of weights and volumes are used in paints industry. The finished paint products are normally stored in large volumes may be quintals but sold in the form of tins. The samples or catalogues are measured in kg, tons, etc. The materials used in packaging like tins, boxes, caps and labels are measured in discrete units or numbers. So, an ERP which has the ability to maintain multiple units and the conversion between them is a selection point for paint manufacturers.
Multi-location/plants: Most paint manufacturers have multiple plants or warehouses. Moreover, for retail distribution, the stock should be as close as possible. They need to centralize the inventory details and processing information with access to all the concerned people. This can be well-handled through an ERP offering multi-location support. As such ERPs can easily coordinate as well as update in real-time the information of all locations giving the exact picture and right decisions. ERPs with an ability to perform warehouse transfers and inter-location moves can easily replicate the exact scenes happening in your various warehouses.
Damage/Scrap Management, Reuse, and Repackaging: Though available in aerosol forms also, paints are commonly used in their liquid state packed in tin kind containers. This increases their chances of damage. Moreover, most paints can be re-used in production. ERPs with the ability to handle scrap/damages can ease up work. Functionalities like re-work, disassembling, etc. can assure proper reuse and can cut down losses.
Quality and Compliance: Paint manufacturers have to meet product specifications and can’t afford to get deviated from the target specifications. A proper quality check is required during receipt, issue and shipment to ensure the same. Safety of workers, end users, customers is also crucial. Moreover, they have to withstand full compliance with the United States Government’s Occupational Safety and Health Administration (OSHA), Hazard Communication Standard, Superfund Amendments, and Reauthorization Act (SARA) Title III, the non-governmental American National Standards Institute (ANSI) and many more. An ERP can be a rescuer, giving them ability to keep a quality check at all important points in the supply chain. ERP can also help in generating an MSDS and comply with various regulations along with generating numerous compliance reports.
Looking at the typical needs of Paints and Coatings manufacturers, it’s obvious that the complex nature of their operations can be handled better with an ERP. It simplifies operations, accelerates innovation, manages inventory and scraps, and rolls out better quality as well as compliant products.