Process industries like food and beverage, cosmetics and specialty chemicals have had product lifecycle management (PLM) solutions for many years. These solutions rarely receive the same level of attention as those meant for discrete industries.
Things have however started changing in recent years as leading ERP manufacturers like Microsoft, through its Dynamics AX solution, focus on enabling organizations completely manage product definition, from concept to retirement.
Dynamics AX’s capabilities enable faster, more efficient and high quality manufacture of formulated products. A formulated product refers to a structure of items including the label, artwork, container or package, and the formula and recipe for a product. The product can be made in a continuous manner or in batches.
The recipe refers to the ingredients, equipment needed for production, procedures of combining the ingredients, and instructions on how to configure the equipment (e.g. a required mixing time and temperature).
The bill of materials of the process industry is the formula while the manufacturing route and related instructions is the recipe.
Process manufacturing organizations need a Process Manufacturing ERP at all stages. There are basic and specialist requirements at each stage. Microsoft Dynamics AX can be configured to manage process manufacturing requirements such as:
- Rapid order processing for many customers and their options
- Lot/Batch recall/traceability and management of FDA health and safety requirements
- Own and Private label products
- Business analytics and intelligence; from reporting to real-time events with alerting
- Inventory planning, management and visibility
- Product and process costing
Larger companies may require more sophisticated capabilities such as:
- Transport and/or logistic optimization
- Product serial number tracking
- Advanced warehouse task management and Disaster Recovery Planning (DRP) capability
- Automated production data collection
- Multiple units of measure capability such as catch-weight management for pricing/costing
- Lab systems linked to quality inspection
Benefits of Process Manufacturing ERP
Whether you are looking to replace your existing spreadsheets or are in the process of re-evaluating your existing ERP, it’s important to focus on a solution that has a strong process manufacturing foundation. The ERP should support your unique requirements with minimum customization.
Dynamics AX can help to streamline your process manufacturing through:
Production planning provides stability for the details capacity and material plans by ensuring access to timely information, minimizing downtime of production runs, and maximizing resource utilization. Dynamics AX can develop short-, medium- and long-term plans at the plant across multiple locations by answering key questions for planners such as what should be made, how much should be made and where it should be made.
Product costing enables organizations to determine standard or estimated cost rollups. Cost rollups can be determined for a single product or specification, group products or multiple specifications, or for all process specifications for a single or multiple plants.
Material planning helps managers to develop production plans based on demand, current inventory levels and existing replenishment. Materials planning can determine the quantity and date when packaging supplies and ingredients will be needed after a workable production plan is produced. Planning jobs can also be created and confirmed for later transfer to manufacturing jobs.
Recipe and Formula Management
Organizations can use recipe and formula management to manage the resources required to produce a product in every stage of the manufacturing process. The formula or recipe is the basic building block for the entire manufacturing process. The two define all the resources and steps required to produce raw materials, intermediate products, and resource and labor requirements.
Other benefits of process manufacturing ERP include:
- Automating your chargeback validation process and helping to keep tabs of regulatory compliance requirements, manage fees and rebates, non-standard pricing and high data volumes.
- Protect your customers and brand with easy-to-use traceability solutions that can track ingredients and products from suppliers to manufacturing end-users.
- Make informed manufacturing decisions in real-time to improve delivery performance, contain costs, increase plant throughput and enhance quality.
- Streamline inventory management and get accurate data in real time to ensure low manufacturing costs, quicker inventory turns, faster time to market and higher quality product.
- Maximize efficiency and utilization of organization resources to meet market demand and extend the life of significant capital assets.
The above is an overview of recipes and formulations requirements in a process manufacturing ERP.
Watch our Process Manufacturing Video in Dynamics 365 Enterprise:
Manufacturing ERP systems provide multiple quality management tools that discrete and process manufacturers can use to optimize their processes and deliver high-quality products at competitive price levels. The quality modules included in most ERP packages are fully configurable, allowing users to implement quality control functionality in flexible ways, by simply enabling or disabling a wide variety of features and parameters.
Do you wonder how an ERP system can help with product quality management? If yes, below are five ways you can use such a system to improve the quality of your products.
- Address variations: Manufacturing variations, ranging from ingredient, recipe, and formula to temperature, humidity, ventilation, and pressure variations, can greatly affect product quality. Not only ERP systems allow manufacturers to monitor and keep variations within definite limits, they also facilitate real-time equipment monitoring, machinery analysis, and remote data acquisition to ensure the best quality possible. By configuring ERP systems to track all variations, send alerts before deviations exceed preset values, and automatically take certain corrective actions, you can expect to manufacture higher quality products over time.
- Plan: Product quality starts with a plan. Using a manufacturing ERP solution to develop a quality plan will ensure that all of your employees will follow the same route, from raw material procurement throughout production to delivery. Additionally, new ERP features and functions have been developed to block inventory during and after the planning phase, allowing you to reserve the resources required (e.g. materials, documents, sampling, instruments, areas, etc.) and prevent the use of non-approved inventory. Manufacturers can also include in their plans various requirements, ranging from certificates of conformance, product specifications, employee IDs, and transaction IDs to other details essential to achieve a certain quality level.
- Ensure data accuracy: Manufacturing high-quality products consistently is impossible without timely, accurate, and complete ERP data. Since end products reflect any quality issues that may arise during the manufacturing process, capturing and synchronizing information as accurately as possible, while new data is added, is critical to ensure that you’re regularly meeting certain quality criteria and regulatory standards. Thanks to advanced ERP systems, collecting and accessing accurate, sufficient information is no longer a challenge for manufacturers.
- Manage documents: When it comes to product quality, document management is another important aspect. Manufacturing ERP packages allows users to attach files to projects and reports. For instance, a manager will be able to attach PDFs, Word documents, Excel reports, PowerPoint presentations, images, and other documents to projects and work orders to offer more insight into product specifications, bills of materials, recipes, formulas, inventory, etc. Since data accuracy has a significant influence on operating efficiency, having a system that allows you manage documents efficiently and maintains data integrity when transferring information between applications can help you improve the quality of your products.
- Test: ERP systems can also be used to define quality guidelines, predefine tests for materials and finished products, create quality orders that specify the tests that must be performed for particular products, record multiple test results and then compare them against predefined values. When managing nonconforming materials or products, manufacturers can create nonconformance reports and orders, include explanatory notes, link nonconformance orders to each other to identify and explore interconnections between quality issues, and estimate additional costs resulting from nonconformances. In addition, the top ERP solutions enable companies to track issues back to their origins, select the best solutions to problems, manage turnaround times for nonconforming products, connect test results to adequate preventive or corrective actions, and even schedule automated tasks to correct certain problems.
Identifying items with quality problems is essential for a company preoccupied with improving product quality. But more important than this is to determine and understand the underlying sources of quality issues. The fact that most manufacturing ERP systems give manufacturers access to critical information relating to the sources of quality problems, allowing them not only to determine whether a nonconformance was due to wrong work order number, poor-quality materials, defect codes, or wrong recipes or formulas but also to prevent future recurrences, is what makes these software solutions truly valuable.