ERP Manufacturing

Process Manufacturing ERP

Companies that use a method called process manufacturing do so to produce products in smaller batches than companies that use what is called ‘discrete’ manufacturing process. These businesses mingle and blend numerous formulas which they mingle and blend to make a product, as opposed to discrete manufacturers which use Bills of Materials. (Some examples of this type of manufacturing occur in the food, drug, and winery industries.) Afterward, batches of the product stream from beginning to end -all the way through the factory- with negligible interruptions making a product that is consistent.

The end game for process manufacturing ERP is to organize the data for these businesses that are so material specific. But there are four basic reasons why ERP designers and vendors stay away from ERP for process manufacturing businesses. First of all, the market for process manufacturing ERP is much smaller than the market for discrete manufacturing. Vendors know they cannot possibly sell as many ERP software solutions to process manufacturing companies as they can to others. ERP software developed for discrete manufacturing businesses will not work for process manufacturing companies. On top of that, to develop attractive software for those businesses requires such specialized knowledge, that just the entry into the market is already costly. And, the fourth problem is that there are so many individually focused vertical markets that the software has to be broad and deep.

So are vendors entering the ERP market for this type of manufacturing? The answer is: yes.  Vendors are attracted to a need. Fulfilling needs makes money. Consequently, in the 1980’s, ERP vendors began to add process manufacturing solutions to their ERP by using third party solution providers with previous experience dealing with process manufacturing to integrate with their own ERP software.

Although there are a few systems on the market still using the source code of an ERP that was purchased and changed to facilitate their process manufacturing add-on, about ten years ago vendors stopped implementing this methodology. The old method did not allow for the ERP to change and grow, eventually leading to outdated software; it also created an unwanted dependence on the third party to maintain the entire software system and not just the manufacturing aspects.

By the summer of 2010, many of the top ERP vendors had ventured into the distinctive market that is unlike traditional manufacturing in that the inventory is blended and not assembled, giving way to exclusive properties such as: yield factors and re-blended waste products.

Written by :

Amy Cruz