What’s the best alternative to a good ERP system in the chemical industry? There isn’t one. Without great software to track and manage your business, the result is best described as chaos.
There are many items, actions, dates, and compliance issues to track when managing chemical products and their inputs that spreadsheets and non-integrated point applications often do little but create confusion, leaving companies to rely on human intuition rather than objective data.
As examples, consider the following items:
Each of these data points or processes benefit from being included in an integrated ERP system deployment. In this post, we delve deeper into each to detail the reasons why.
Lot/Batch management is most effective when it incorporates critical data elements like expiration dates, quality control data, and traceability information. A modern ERP system already includes the warehouse and shipping information necessary for managing FEFO, locations, ‘pick ticket,’ and more. At the same time, the ERP system enables automated processes that tie QC data directly to batches and lots. Taking the data connection one step further down the lot/batch management stack, all the information can be associated with raw materials supplies, resulting in a completely connected information chain that traces all inputs to their eventual end-customer locations and applications. The result is optimized product traceability and faster resolution of in-field issues, such as managing recalls.
Formulation Management and Adjustment
The formulation (BOM) should be the driver behind all product material purchases. The ERP system tracks both the quantity of raw materials on hand as well as the quantity necessary to satisfy sales forecasts. With little to no need for manual intervention, a chemical producer can continuously order raw materials in line with expected production needs. In addition, formulations calling for adjusted potency become easier to manage, as the company can track raw inputs back to individual suppliers. Not only does the supplier gain earlier notification of the need to adjust potency, purchasing and receiving can handle returns and cancellations faster, saving the company costs incurred when receiving materials they cannot use.
Yield Calculations and By-Product Calculation
A modern ERP system allows you to perform fast, real-time calculations based on key performance metrics that affect how you do business. By integrating final yield data with BOM data, the ERP system enables calculations that pinpoint exact inputs and costs to their resulting outputs. The closer a company gets to 100% costing accuracy, the closer it comes to pricing for optimal profit. By knowing your exact costs, you can choose to maximize your bid or undercut competitors, depending on the competitive scenario.
Production Scheduling and Change-over Optimization
An integrated ERP system forms the vital connection between what you sell and what you actually produce. Even more importantly, it enables your organization to predict what you can and will produce based on demand forecasts, supplier restrictions (delays), and lead-time forecasts. By integrating these data types, you can vastly improve your ability to match production schedules to sales promotions and customer commitments. Not only does this save costs by optimizing production line changes, it also improves customer relationships because you can now ensure delivery as promised.
Modern ERP systems provide the full-featured power that you’ve come to expect from ERP, but with the simplicity of streamlined data integration, intuitive user interfaces, and simple process and workflow configuration. If your chemical business isn’t taking advantage of having all your critical formulation data in a single location and surrounding it with automated processes to optimize critical success factors like forecasting, formulation management, supplier collaboration, and in-field service, it’s time to evaluate a modern ERP system. They’re the best and, frankly, only way to maintain a competitive advantage in today’s chemical industry.
To learn more about how an integrated ERP solution can help your chemical business, join our webinar next week.
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