For chemical manufacturers, the production process involves managing complex formulas, handling industrial chemicals, and adhering to an extensive set of regulations on quality and safety management. Add to that the layers of paperwork, spreadsheets, and disconnected software tools, and you have a perfect recipe to make chemical production even more complicated.
As a solution to this challenge, a comprehensive, industry-focused ERP software streamlines your operations by reducing manual processes across production and supply chain, and ensuring batch consistency through well-defined automated workflows. This blog explains how an ERP for chemical industry simplifies production processes and turns your manufacturing facility into a hub of excellence.
Optimizing Production with Chemical ERP Software
Designed to meet the complexities of chemical operations, ERP for chemical manufacturing is a unique solution for process manufacturers that combines formula management, quality control, material planning, and other essential business functions through various ERP modules. It optimizes your resources through better allocation, reduces production costs by minimizing errors, and increases the overall efficiency of your business.
Moreover, in an industry strictly governed by the regulation of chemicals, such software for the chemical industry becomes a critical must-have, not just for saving time lost to maintaining lengthy global compliance documentation, but also for improving market access and building a stronger global brand reputation.
How Chemical ERP Software Ensures Production Control?
Let’s explore the capabilities and benefits of ERP for chemical manufacturing:
1. Formula Management
How a formula is managed during a production run directly affects the quality of the final product. Given that raw material or intermediates can vary in purity and potency, the chemical ERP software can track these lot-specific characteristics. To maintain consistent product quality, the system makes adjustments that could include automatic calculations of ingredient quantities, specific gravity, viscosity, and more. By minimizing human-led calculations, process accuracy improves, waste is reduced, and product development happens faster.
A. Unit of Measure Conversion
During purchase, storage, and production, the ingredients can be expressed in different units of measurement, like gallons, kilograms, and by drum size. The ERP system, with its unit of measure conversion capability, simplifies ingredient calculations into different units up to decimal point precision, maintaining uniformity in inventory valuation. This way, formula accuracy is maintained whenever an ingredient needs to be added to the machine, and also, scaling formulas becomes easier for different batch sizes.
B. Theoretical vs. Actual Yields
One critical aspect in chemical manufacturing is keeping track of theoretical and actual yields. With centralized data in a chemical ERP, yield comparison can be easily done, and accordingly, processes are optimized to manage deviations. This is especially important to minimize material losses, monitor reaction efficiency, and make processes more efficient and profitable.
C. Version Control
Since multiple formulas need to be managed within a chemical manufacturing facility, version control within ERP lets you record every formula so that you can recreate the same quality across every batch. Besides, it provides an audit trail for inspection authorities to verify that only the approved and certified procedures were followed. So, once the master formula for a product is approved, its version is documented in the system along with safety protocols and equipment settings that must be followed.
2. Batch Processing
Batch production can get complicated due to shared resources, multiple products, and frequent downtime for cleaning and setup during different product batches. ERP for chemical manufacturing ensures production flows smoothly by scheduling work orders by hour, shift, or custom time periods to balance the workload. Depending on batch size and production volume, the resources can be aligned with bare minimum human intervention. And, if there are resource constraints, the ERP can quickly generate an alternate production schedule.
A. Flexible Workflow
Manufacturing steps and requirements can vary significantly by product/batch. Sometimes, you may need to simmer the batch while adding ingredients. At other times, motor load adjustment may be needed to homogenize the batch. Instead of forcing a rigid approach, chemical ERP allows flexibility by accommodating batch-specific instructions and managing multiple routing steps.
B. Batch Costing
After the formula is finalized, the system automatically determines the cost of intermediates and finished goods based on costing methods, overhead costs, and batch-level cost factors defined by the user. Any changes in material costs updated by the purchase team are auto-updated in the ERP to reflect the actual costs.
If there are by-products generated along with the main product, ERP system-driven batch costing distributes costs among the two products to ensure costing accuracy. What’s more, managers get real-time visibility through detailed batch reports on budget variance, margin, and work-in-progress expenses.
3. Material Requirements Planning
Chemical ERP can easily calculate the material required at each stage of production. As production progresses, the actual material consumption is recorded in the ERP. Analysis of consumption patterns in ERP allows time-phased material planning, i.e., ensuring material availability before production begins, which also minimizes inventory holding costs. So, when the production team places the next order, the system allocates stock items and can even adjust the quantity to meet potency requirements. For minimizing waste, the inventory module in ERP also takes into account the shelf life and expiry date of materials.
Material planning ensures that production targets and customer demand is timely met. By offering a complete view of open purchase orders, scheduled batches, sales orders, and demand forecasts, the ERP software system ensures that teams across procurement, inventory, and production have a single view of available inventory as well as future inventory requirements. This increased collaboration is crucial in ensuring an uninterrupted material flow.
4. Quality Management
Leading ERP for chemical industry can categorize product quality status into accepted, rejected, or quarantine by enforcing system validations. If the batch fails to meet the QC test as per the documented specifications in the ERP, it is rejected. Irrespective of quality, the inspection results are recorded along with production history. This allows end-to-end lot traceability from raw material to finished goods. In case the product can be reworked, customization can be done during ERP implementation to set clear workflow rules, formula design, and user procedures for rework management.
5. Packaging & Regulatory Compliance
As is common in the chemical manufacturing industry, the SKUs can exist in different packaging sizes of 100-litre drums, 10-litre cans, and 1-litre bottles. Your chemical ERP keeps an account for every SKU for batch traceability. In the event of a recall, the system can trace and execute an accurate recall of affected batches.
Chemical manufacturing businesses must also comply with local and global regulations, such as MSIHC, REACH, GHS, etc. With centralized data on compliance, the ERP system ensures that each department follows the respective norms. For example, using a dynamic labeling system, the ERP can generate barcodes and other product-related information, such as chemical composition, hazardous materials, and chemical handling instructions, to label batches as per GHS labeling rules.
Conclusion
As the Indian chemical manufacturing industry strengthens its position in the global market, chemical business owners are increasingly adopting ERP software. This integrated solution empowers them to gain greater control over their processes, scale their operations faster, and effectively meet rising customer demand.
Sage X3 is the best-in-class, scalable ERP software for chemical industry, designed to maintain strong control across multi-site production and global business operations. It improves your workflows, automates processes, and can be fully customized to suit your unique business requirements and compliance needs.
FAQs
1. How Does a Chemical ERP Help Comply with Indian Regulations?
Chemical ERP centralizes compliance data like batch records, safety documentation, audits, and statutory reports. Thus, complying with chemical industry regulations by the environment and pollution control boards, export authorities, etc becomes a lot simpler and faster.
2. What Chemical Industry Challenges can an ERP Software Solve?
ERP chemical software integrates finance, production planning, purchasing, quality, and inventory management, providing real-time visibility into costs and materials. It reduces waste, minimizes delays, and ensures consistency across plants.
3. Is ERP Software Suitable for Small & Mid-sized Chemical Manufacturers?
Yes. A modern ERP software is suitable for streamlining the operations of growing SME chemical companies. The software brings cost efficiency and makes your growth journey smoother when expanding production volume or diversifying into new domestic and export markets.
