ERP Selection tips for process manufacturers
Selection Tips
Most ERP systems aren’t designed for process manufacturers. At the small business level accounting systems that lack inventory capabilities let alone manufacturing capabilities tend to gravitate towards using 3rd party systems designed specifically for manufacturing concerns however the integrations between systems are generally clunky at best and a business liability at worst.
There are ERP systems designed exclusively for process manufacturers however they typically cover the manufacturing elements brilliantly but fail at the accounts, sales and general ledger level.
The ERP systems that buck this trend are Sage X3 ERP a tier 2 ERP for small to mid-sized enterprises, BatchMaster for SAP Business One & BEAS for SAP Business One. Sage X3 manufacturing includes a deep and wide set of capabilities process manufacturers require to operate at maximum efficiency. BatchMaster and Boyum BEAS have been written on the SAP Business One platform creating a consistent user experience, optimized business processes and a quality end to end business system for mid to large process manufacturing companies.
A general ERP system can be configured to meet some of a process manufacturers requirements however they rarely cover every requirement or all requirements fully. If you choose to evaluate a general ERP system for your process manufacturing concern focus in on quality control, traceability, allegen management, CAPA, & integration points and technologies if the ERP or accounting system relies on a standalone 3rd party manufacturing system. Since integration is king these days we encourage companies to consider the technologies the ERP systems they are considering are built on. Old technologies can squash business ambitions really quickly.
Formulas and Recipes
The inventory systems of general ERPs typically manage bills of material, bill revisions, lot numbering and capture of SKU characteristics however that’s about as far as they go.
General ERP systems rely on using general journals and stock adjustment transactions to account for the variable nature of process manufacturing outputs. It’s neither effective nor efficient. Often, these systems lack the required precision of 4, 5 or greater decimal places on a unit of measure. Further to this quality control and product status are rarely available in general ERPs.
Process Manufacturing software such as BEAS or BatchMaster for SAP Business One or Sage X3 ERP are designed to manage and account for variable production outputs. They use recipes and formulas; account for constant and variable loss factors; manage wastage, shrinkage, rework and batch-based costing as core functionality & not via elaborate set up, customization or a reliance on inefficient business processes.
Good process manufacturing ERPs will help you manage a broad set of product characteristics such as is the product available in a soft-gel form, and or as a capsule. What is the tablet shape & appearance requirements and more.
Quality Control Measures
The administrative costs of operating a paper-based Quality Control system or in a system that sits outside your ERP system opens your business up to unnecessary risk. Most general ERP systems don’t include the quality control capabilities that process manufacturers require.
Forward and backward traceability is key to reducing the impact of a product recall whilst quality controls at the time of receipting raw materials; picking for a work order; during and postproduction and when picking to fill a client order, ensure consistent product quality and protection of the company’s reputation.
Product status such as quarantined (Q), or R-Rejected provides companies greater control over picking and dispatching goods
Purpose designed process manufacturing systems support allergen tracking, potency, support sampling & stability testing. They also manage non-conformance (CAPA)
Fractional Quantities
Pharma, Nutra, chemical and some food and beverage products require precise measurements of ingredients, to multiple decimal places, often to ensure compliance, to control costs and to meet a predetermined product or batch threshold. Good process manufacturing systems include the ability to integrate with weigh scales and to manage fractional quantities of stock. Most general ERP systems fail to adequately deal with fractional quantities of stock leading to a need to constantly adjust stock on hand figures increasing the chances of stock loss, or incorrect stock valuation.
Traceability
Sage X3, BEAS and BatchMaster for SAP Business One are built to support forward and backward batch and lot tracking.
All three systems track stock from receipt of goods through to customer dispatch. This level of tracking linked to quality control (QC) measures enables lot, batch, work order and customer isolation should an issue arise.
Traceability ties in with the ERPs output of product labels with information such as best before, expires by, production date, line manager, weight and price.
Integrations
The days of an ERP system being all things to all people have ended. Today, the technologies underpinning quality ERP systems support integration with other systems including Cloud software systems and smart machines. Examples include MES (Lynq) systems, weigh scales / weigh bridge systems, OEE (Evocon) & Shopify eCommerce.