What Is The Role Of ERP System In Chemical Industry?

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What is the challenge faced by the chemical industry?

Outdated business management solutions are the worst enemy for the company. In this competitive era, the rate of item proliferation is increasing at an exponential pace, while product life cycles are decreasing. Manufacturers must be innovative and maintain a balance between inventory investments, customer services, and operating costs in order to remain competitive in this market.

However, unlike other businesses, the chemical industry is a more complex business. It is more challenging and potentially dangerous as well. Complicated inventory, manufacturing and shipping requirement can put a strain on the company if they miss a thing of it.

That when a chemical ERP system come in, a chemical ERP enables to assist them with many things including quality control at different stages, batch production with traceability and new product development, contract manufacture, and meeting myriad compliance regulations.

Key Feature Of ERP System In Chemical Industry.

1. Formula management

Formula management is a high priority on any list. This formula could be the secret sauce that keeps the company afloat. Chemical formulation is not linear, unlike the production of discrete products. Regardless of whether the batch is intended to produce one barrel or one shipping container, a single ingredient may be needed. Chemical reactions can cause ingredients to react, so chemists must ensure that ingredients are added in the right sequence and in the correct quantities to avoid potentially dangerous situations. You can also alter the product’s potency by changing the number of certain ingredients. The active ingredients can have a significant impact on the final product’s price. They can be as low as 10%, 50%, or 90%.

2. Conformance to industry regulations

Chemical manufacturers need to comply with regulations from many government and industrial sectors. There are many hazards associated with products. These could include temporary skin irritations or explosions that could cause damage to buildings. These agencies have the right to inspect any production facility at any time. They expect to receive regular reports detailing what was produced, in what quantities, and over what time period. They may also need to know the names of the customers who purchased the products, and what they intend to do with them. Each agency will likely require different information. Each regulator report must be produced by the chemical manufacturer ERP.

3. Lot tracking

Every batch of products must be identified by a unique lot number. Although lot tracking is a common feature in most ERP systems, each chemical manufacturer will have specific requirements that the ERP system must meet. This lot number can then be used to determine every detail in the production. Which formula was used? What were the names of the workers involved in each stage? Were the equipment and tools properly cleaned before they went into production? What temperature, humidity and pressure measurements were taken during production? If you need to track why a problem developed or was discovered after production, any of these data could be crucial. This is especially true when there was an injury that may have been caused due to a problem with the lot.

4. Safety data sheets

These documents should be accessible to all users of products manufactured by chemical companies. There are many requirements. Certain products may require a new SDS for each shipment. Some may only require that it be available online for users who need one. It is the responsibility of the chemical manufacturer to ensure that each customer has an up-to-date version.

Benefit Of Using ERP System In Chemical Industry

1. Formulation management

The formulation should be the driving force behind all material purchases. Chemical manufacturing companies can keep track of the number of raw materials available and the quantities required to meet their sales forecasts using an ERP system. Process manufacturers can order raw materials in an ERP system to ensure they meet their production needs without the need for manual intervention. It is also easier to manage formulas that have to be adjusted in potency. The business can track raw inputs back to the supplier directly. Not only is the supplier notified about the need to adjust the formula’s potency but they are also able to deal with cancellations or returns much quicker to lower company costs.

2. Stock control

Chemical manufacturing stock control is more effective when it uses data elements such as traceability, quality control, and expiration dates. An ERP system will already have the information needed to manage locations, FEFO, and other details. It also allows automated processes to link lots and batches with quality control data. This can allow you to connect all the data to the manufacturer’s raw material supply, which can help to create a chain of connected data that can track all inputs to their applications as well as end-customer locations. This allows for faster resolution of problems in the field and optimised product traceability.

3. Manufacturing that is responsive and agile

Chemical manufacturers have the ability to make changes in demand and be more flexible with their supply chains with an ERP solution. You can distribute revised or new manufacturing plans to your supply chain network. This allows them to manage their manufacturing in real-time based on accurate sales and marketing moves that can drive production decisions.

4. Innovation in product design

An ERP solution allows chemical manufacturing companies, including their sales, manufacturing, and research and development departments, to share their data. This allows them to better manage product lifecycles and anticipate future needs. Chemical manufacturing companies will have an edge over their competition by using ERP solutions to support collaboration and provide customers with quick responses to enquiries and sales requests.

5. Collaboration improved

The whole organization benefits when every department has access to the same ERP system. With key collaborators, different functions like material procurement, catalogue production and development, invoice management and development, vendor monitoring and assessment, and contract management and development can all be more easily integrated. This can improve collaboration, strengthen relationships with vendors, and result in lower purchasing costs, better purchasing leveraging, and lower purchase prices.

6. Supply chain efficiency improved

Chemical manufacturing companies can use ERP software to work closely with their supply chain members. This will reduce cycle time, improve supply chain efficiency, visibility, and lower inventory costs. ERP software can be used to strategically manage raw materials. This can reduce costs, minimize waste, and increase profits. Working capital requirements can be reduced by better planning of supply and demand.

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