Process Manufacturing ERP: Formulas & Recipes

When most of us think of ERP, we think of a manufacturer who takes one widget and two gadgets, adds an hour to labor and presto – he has a finished product. Whether he makes one or one million, there is always one widget plus two gadgets in each product. Formulation at these manufacturers is incredibly simple.

Process manufacturing is different. Think of making stew for your family. Then imagine making the same stew to feed the whole neighborhood. Now scale it up to packaging that stew for every grocery in the country – millions of servings. You don’t have a fixed bill of materials; you have a recipe or formula. The recipe will vary with each change of scale. For your family, you might use two pounds of prime beef. For the neighborhood, you might use 25 pounds of pretty good grade beef. For the country, you might not even use beef….

For your family you go to the local grocery and buy a package already measured out to the amount you want. At the factory level, you buy truck loads of steers. They each weigh different amounts and each has their own level of lean meat to bone and other parts. How many steers do you need to package a million servings?

Your process manufacturing ERP system must deal with this formulation variability. A lot of it can be adjusted by ratios but not all. In the food business, it just has to taste right. In pharmaceuticals, the dose must be safe and effective.

A Product to Sell or a Lawsuit to Settle

In food, you must report calories, carbohydrates, proteins, etc. as a percentage per serving. Formulation within process manufacturing ERP must take these limits into consideration. In many chemical processes, there are legal limits to the volume per weight of certain ingredients.

Process manufacturing ERP systems must be able to deal with multiple units of measure. You might buy some ingredients as liquids and others by dry weight. They all are mixed together and then are packaged into 12 oz. bottles or perhaps 1 mg. or 3 mg. tablets. During the formulation process you must measure temperatures and acidity levels that change with chemical reactions or through external factors such as a heater.

ERP also has to deal with by product and co products of process manufacturing. You are making product A, but half way through the process, you drain off unnecessary liquid. There is a market for that liquid so it isn’t waste but a product you can sell on the side.

Even the finished product can have grades. The best of your product A rises to the top and sells at a high price. The lower level product can also be sold as a lower grade of the same product. The same ingredients go in but the resulting product for sale is at different prices.

The process manufacturing ERP system you select will have a big job to do and when it comes to formulation and recipes, this job could be the difference between a product to sell or a lawsuit to settle.

author image
Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

author image
Tom Miller

Featured white papers

Related articles