Process Manufacturing ERP

Points To Consider When Looking For A Process Manufacturing ERP

The Internet abounds with hundreds of blog posts trying to persuade manufacturers to invest in a process manufacturing ERP solution. Regardless of how hard ERP developers and vendors try to convince manufacturing companies that an ERP system could be the best investment for them, a manufacturer should never make a final decision before asking the right questions. What questions are we talking about?

To begin with, do you, as a process manufacturer, really need an ERP system? Can it help you improve productivity and quality, meet regulatory standards, and serve customers better? Are there any factors you should consider when choosing ERP software? By examining these questions, with a focus on the elements any process manufacturer should take into account when selecting an ERP solution, you’ll be able to develop a really shortlist of ERP alternatives.

Process Manufacturing ERP: Points to Consider

Since process manufacturing is very different from discrete manufacturing, opting for an ERP solution especially developed for process manufacturing environments, including engineer-to-order, make-to-order, make-to-stock, configure-to-order, and assemble-to-order, can help better control the areas that matter most for your company, such as recipes and formulas, bills of materials, production flow rates, product and process design, testing, traceability, scheduling, and cost allocation along with seamless integration, real-time visibility, and instant user access.

Process Manufacturing Worker

The comprehensiveness and configurability of the solution are two essential aspects for any process manufacturer. Though most process manufacturing ERP systems are developed to meet a wide range of business requirements, writing down what is absolutely necessary and what is optional for your company will help you choose an ERP solution that provides exactly the features you need to optimize and streamline your operations. Additionally, a highly configurable ERP system will allow you to efficiently manage unique practices, processes, and requirements, while tracking profits and losses.

To achieve the best outcomes, it’s imperative that the system meets the requirements of your industry vertical. Not only such a system will allow you to eliminate costly customizations later on; it will also reduce the likelihood of errors and unanticipated consequences.

The deployment model is another critical point for a process manufacturer. Most ERP vendors offer customers the flexibility to choose between two delivery options: on-premise and cloud-based ERP software. An on-premise ERP solution is perfect for companies that already have an in-house hosting environment and the technical capacity to support, control, and maintain a complex system. Cloud ERP solutions, on the other side, are ideal for organizations that lack the necessary IT infrastructure and staff to manage such systems. In this case, the software, updates, and applications are managed entirely by the vendor in exchange for a monthly fee. The choice between these two deployment models isn’t that difficult if specific factors, including workforce mobility, system scalability and integration, and pricing model, are taken into account.

When you’re choosing an ERP solution, it’s also important to consider the vendor. By working closely with an experienced ERP vendor, you’ll have all the support you need during and after system implementation. When unexpected errors occur or misunderstandings arise, having an expert by your side is critical. Stability, market presence in region, past successes, expertise, adaptability, and innovation are important considerations to ponder when selecting your vendor.

After a careful planning, prioritization, and in-depth analysis of process manufacturing ERP options, it’s time to select the right system for your company. Dynamics AX is one of the best ERP solutions you can find. For years, AX has been seen as one of most flexible systems that can be easily optimized for any process manufacturing company, regardless of whether it operates on a local or global scale. And that’s because the inner workings of Dynamics AX have been especially developed to match recipe- and formula-based manufacturing environments.

Whether manufacturing to order or to stock, Dynamics AX provides all the features you may need to plan, execute, control, and track the output, while maximizing resource utilization, streamlining business processes, and driving superior performance. Furthermore, as a complete process manufacturing ERP solution, AX focuses on operational efficiency and ensures visibility throughout the entire supply chain along with seamless integration in any process manufacturing environment, enabling process manufacturers to respond quickly to shifting market conditions.

Food and Beverage Distribution software

Food Processing Software

Food Processing Software: Changes & Challenges

Food processing software implementation can be a harrowing experience for any food manufacturer, the go-live phase being considered the most difficult part in the entire process. One reason for this is that most food processing companies opt for the “big bang” go-live method, which involves rolling out all the modules and moving all the departments to the new system at the same time.

Food Processing Softwaqre

Unlike “parallel” and “phased” go-live approaches, the “big bang” method allows manufacturers to avoid repetitive disruptions in the production process, helping them prevent significant financial loss. Though this approach makes sense for most food processing companies, it’s riskier than the other two alternatives. Since the go-live phase can be scheduled well in advance between two production cycles, potential risks don’t relate to recurring downtime, but to:

  • Inability to revert to the old system if something goes wrong – Within several hours after a new food processing software solution goes live, reverting to the original system is no longer a viable option. Additionally, since we’re talking about fully integrated software, there is a high risk of damaging the whole company, as specific failures in some parts of the system can affect other areas, paralyzing the entire business activity.
  • Loss of critical business data – Exactly what data is migrated to the new system along with the level of detail represents a critical aspect for a food manufacturer. Recipes along with formulations in which the type and amount of ingredients vary based on the desired output, bills of materials, customer and supplier information, pricing data, open transactions, beginning balances, routings, conversion factors, and historical data, including sales history, are vital elements not only for the success of an ERP implementation initiative, but also for business continuity. Since data migration can be done following a “phased” approach, the vendor implementing the software can opt for a multiple-stage migration process, each phase being tested separately to ensure data accuracy.
  • Difficulty to perform end-to-end testing – If the individual components of a food processing software solution don’t work well together, the system won’t operate satisfactorily. During the “phased” approach, the vendor can test the system after each phase of the implementation process and address errors gradually. Conversely, the “big bang” approach is more complex, requiring vendors to perform end-to-end testing and fix a large number of issues that may arise simultaneously, which may cause implementation failure.

The main problem with the “big bang” approach is that most issues are usually detected after the go-live date, when food manufacturers start to run new production batches. Since no go-live is perfect, this bold initiative may result in unplanned downtime, with perishable ingredients ending up in the dumpster and huge operating costs added to the production process.

Kellogg Had Three; Hershey Had One

What are we talking about? In short, food processing software implementation failures. Learning from failed implementations is one of the best things food manufacturing CIOs can do to identify potential problems and prevent their initiatives from falling short of expectations.

What did Kellogg and Hershey do wrong? While Kellogg opted for a heavily customized system, which not only demanded intense and costly maintenance but also prevented the company from taking advantage of full system functionality, Hershey’s execs decided to cut the implementation time-frame from 48 to 30 months. The result? Kellogg needed to create a new IT environment from scratch and choose another ERP software solution; Hershey lost multiple orders, totaling $100 million.

How can you ensure a successful food processing software implementation? Here are a few takeaways:

  • plan and schedule the entire implementation process, including the go-live phase;
  • never cut corners; though taking shortcuts may save you time in the short run, it could cost you a lot if unforeseen system errors occur;
  • get ready for testing and downtime associated;
  • choose the right vendor, who really understands your business and can walk you through each stage of the implementation process.

Food Processing ERP

Food Processing ERP: Formulas and Recipes

To remain competitive in the coming decades, food processing manufacturers must find new, more efficient ways to transform raw materials into sellable products, while meeting a wide range of requirements. For this, they need complex food processing ERP solutions, which combine planning and reporting capabilities with industry-specific formula, recipe, tracking, and control functionality. By using advanced capabilities, process manufacturers can easily and effectively manage all the variables required to control manufacturing life cycles, gain visibility into business activities, drive continuous improvements, optimize production, manufacture high-quality products, and comply with the latest regulations and standards.

Food Processing ERP

Formula and Recipe Functionality: Is It Important?    

The unique characteristics of the food processing industry have determined developers to create software products that can manage niche-specific requirements. Single software solutions, such as Microsoft Dynamics AX, can help process manufacturers handle a series of operations, formulas, recipes, extractions, chemical reactions, and many other factors necessary to successfully convert raw materials into final products. Since recipes and formulas include more variations than regular bills of materials, Dynamics AX has become an indispensable tool for food processing manufacturers. As a food processing ERP solution, AX can help you with:

  • Recipe and formulation management – Since recipes and formulations are unique to food processing, manufacturing process management used to pose significant challenges for food and beverage companies. But this is no longer the case. Dynamics AX includes features that manufacturers can use to manage standard, adjusted-as-planned, and adjusted-as-produced recipes, substitute ingredients, formulate products to individual specifications, break down recipes into interim production stages, calculate costs based on ingredients and recipes, view formulations as tables, graphics, or charts, track batch execution, verify and validate compliance requirements, and create and filter reports by ingredient, formula, recipe, batch, stock, and production yield.
  • Production control – Formula and recipe functions included in advanced food processing software can help manufacturers control inventory items and handle different units of measure to optimize production. Since raw materials are usually measured by weight or volume, including different ingredients in a recipe can cause variances in production. To eliminate variances, Dynamics AX has been complemented with conversion factors that convert quantities from one unit of measure to another. The system can also be set up to track ingredients and make them available exactly when they’re required. Using ingredients before their expiration dates can help reduce waste.
  • Batch optimization – Dynamics AX is one of the few food processing ERP solutions that allow you to plan and produce goods against preset batch sizes, which will increase manufacturing yields. Additionally, it enables users to reserve raw materials for specific dates and restrict certain processes. For instance, newly received inventory may be available for viewing, planning, and reservations but put on hold from shipping. New features also facilitate automatic quantity adjustments based on the active ingredients used in recipes. This way, manufacturers can ensure that the right concentrations of ingredients are used in all products.
  • Competitive advantage – Unlike other manufacturers, food processing companies gain a competitive advantage especially through their formulas and recipes. Having a reliable food processing ERP system to control production, reduce costs and lead times, minimize risks, increase profitability, bring products to market faster than before, and efficiently deal with economic pressures and their consequences can help you achieve a competitive position in your niche.

Finally, food and beverage companies have a complex ERP system that fits their unique requirements. Designed with industry-specific capabilities, including advanced recipe and formula functions,  Dynamics AX is one of the few food processing ERP solutions ready to help food processing manufacturers handle variability, adjust ingredients, quantities, and production phases according to the specifications of each product, manage inventory items based on expiration dates, speed up production processes, calculate costs and define yields, track batches and lots, and meet government regulations to produce consistently quality goods and remain competitive.