Nothing excites me more than the resurgence of US manufacturing. It’s comeback has a multiplier effect on the US economy, for every dollar in final sales of manufactured products, $1.33 goes into output. This effect accounts for the largest multiplier of any sector in the economy. I came across this article by Seeking Alpha and condensed it below. The article describes the continued growth in US manufacturing.
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:
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.
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.