Manufacturing does not fit into one nice, neat little box. It’s a diverse industry.
As such, although there are many manufacturing solutions on the market, by and large, they serve the needs of the discrete segment of the industry. Even with customizations and add-ons, much is left lacking to meet the needs of process and batch manufacturers.
Read: Discrete vs. Process and Batch Manufacturing: What’s the Difference?
Unfortunately, many software consultants are unaware of these needs and recommend standard solutions for specialized needs. Even process and batch manufacturers themselves may not realize the discrepancy between the software and their needs until the implementation is well underway, or even complete, leaving them without a solution for critical aspects of their business.
This post will highlight 8 features that you, as a member of this segment, shouldn’t be without.
Naturally, these 8 features are present in Vicinity’s solutions for the chemical, food, and brewing markets. But you can use these as a touchstone to evaluate any manufacturing software you are considering.
While we’ll examine the use case of a brewery, the principles equally apply to the chemical and food segments, as well as any other manufacturer that works from a formula or recipe.
Feature #1: Altering a Formula According to Variances in Raw Materials
Raw materials, many of them from natural sources, can vary in composition from lot to lot, so it’s necessary to alter the formula accordingly. The software you use needs to allow for that.
In Vicinity Software, when entering a batch into the system, you can indicate the lot of a particular ingredient, then adjust the proportions of other ingredients to maintain product consistency.
For example, let’s talk about water content. Water may already be an ingredient in your formula, but what if a lot of another ingredient has a higher-than-normal water content? You would need to use less water to compensate, resulting in a consistent final product. That feature becomes even more useful when those adjustments are then scaled up to a larger batch that uses the same lot of raw material.
Feature #2: Assigning Multiple Formulas to a Single Product
Producing something in multiple locations is a common practice. But it creates special challenges for process and batch manufacturers. Sierra Nevada Brewing Company brews their Pale Ale in Mills River, NC, using one formula — and they brew it in Chico, CA, using another formula. Why? The water chemistry is different at each site, but the product needs to taste exactly the same. The result is one SKU, two different formulas corresponding to two different facilities.
Most manufacturing software doesn’t allow that functionality. In the discrete manufacturing world, one SKU has just one BOM. But batch manufacturers must adapt to variations and availability of raw materials. In Vicinity Software, you can create production facilities in the system, and associate them with the products they make. Then, the formula is tied to the product according to the facility where it is produced, filling in the gap left by standard software solutions.
Feature #3: Flexible Lot Traceability (1-to-1 or 1-to-many)
One batch often ends up as multiple finished products. Returning to our brewery example, a large batch of beer will be packaged in kegs, cans, and bottles. While some companies will trace lots according to each SKU, others will need to have the same lot number across all end items made from a single batch. Your software must be flexible enough to trace lots according to your established practices.
Feature #4: Support for Quality Control throughout the process
Batch manufacturers need to manage Quality Control (QC) at multiple stages throughout the process. Formula QC ensures that the base product meets specifications before advancing to the next stage. Then further QC checks must be done on the end items. When packaging beer, for example, fill-level detection ensures that each keg, can, or bottle is exactly the right amount of beer within. QC will likely vary for each end-item. Of course, the software you use must be able to track QC at all stages, tying the results both to the formula as well as the end product.
Feature #5: Scheduling Formulas, not just SKUs
Once again we see how having multiple SKUs from a single batch creates ripple effects throughout the process. Would it make sense to brew beer for cans, then another batch for bottles, and another for kegs? Clearly not. You would brew one large tank of beer and use that to fill all the orders. So your software needs to allow you to schedule by formula, taking into account how much of the formula is needed to fill the orders for all SKUs involved.
Feature #6: Advanced Lot Traceability
The food industry faces especially stringent lot traceability requirements: 21 CFR Part 11. The FDA requires you to track all – and I mean all – raw materials. If the material is an ingredient in your product, or even if it touches your product (such as its packaging), it must be traced by lot – everything but the carton it’s shipped in. It’s also necessary to track intermediate raw material by lot. It might be stored in a holding tank for a while.
So the formula, packaging, and finished goods must all be tracked by lot, tying everything together from raw material to finished goods and back again. I think some discrete software solutions do an okay job of that, but they fail to include more in-depth functionality needed by some batch manufacturers to cover rework, byproducts, and other aspects.
Feature #7: Variable Yield Analysis
Each batch produced is a little different. On any given day you could put 100 pounds of raw material in, and the batch might yield 90 or even 85 pounds of finished goods. In order to schedule production, you need software that can predict the yield. And for material resource planning, you need to determine how much raw material to have in stock, and properly account for the loss.
I think discrete manufacturing software can handle loss calculations at the SKU level decently. But batch manufacturers need more granular loss calculations, down to the ingredients, or line items.
Scaling a batch is not simple multiplication. There may be a greater percentage of loss for one ingredient as opposed to another at scale. For example, if a formula calls for water, or a water-based ingredient, and it passes through an evaporation process, logically that ingredient will have more loss than the solid ones. Your software needs to account for that.
Scaling can be even more complex, such as in made-to-order operations where the formula is being scaled to meet the requested quantity. It is also a common practice to create a batch of a product in order to use up the remaining supply of a certain raw material on hand.
Backflushing is a term used in discrete manufacturing that does not apply to batch manufacturing. You need to compare actual input to actual output, because that output varies. Without that, you’ll get a flat yield, which will affect your costs and even scheduling MRP.
Feature #8: Industry-Specific Regulatory Compliance
Chemical and food manufacturers face a unique set of compliance challenges.
Nutrition labels are a requirement for food manufacturers. The data displayed on these well-known labels is calculated from the formula for that product. The information in the formula, in turn, is calculated from data provided by your raw material suppliers. Your software needs to track all the data, calculate the needed information in percentages and by serving size according to each product in order to generate the proper labeling that consumers will recognize. This is, of course, closely connected with lot traceability mentioned earlier.
While discrete manufacturers provide a simple bill of lading for their shipped goods, chemical manufacturers need to comply with regulations and provide more detailed documentation via hazardous bills of lading. In the United States, the Department of Transportation has requirements to follow and codes to include in the labeling of each product. This is so that if there were an accident, authorities can quickly identify what is in the shipment and take action to mitigate any potential hazards.
Around ten years ago, regulators switched from what was a US-only standard to an internationally-recognized system for providing material safety data developed by the UN. Now placards, pictograms, and other visualizations are consistent all around the world. The information, which is extensive and quite technical, is displayed on these labels and documents, and is drawn from the manufacturer’s formula, which in turn gets its data from the suppliers of the ingredients. Software makes this aspect of compliance so much easier.
Finally, industry-specific compliance issues. For example, in the chemical world, you have SARA 312/313. That basically is asking you to report, “How much hazardous stuff are you keeping at the plant, and how much have you used this year?” One side is kind of a balance sheet approach, what is your inventory? The other is more of an income statement question, what is the flow of how much have you used? Software keeps this compliance issue manageable.
As you can see, compliance for batch manufacturing is quite complex. Standard manufacturing solutions would need customization, which leads to more difficulty when upgrading or changing your implementation.
There are many “manufacturing” solutions out there. Most do not meet the full set of requirements for batch manufacturing.
Very likely, your ERP vendor does not even realize that, as an example, the inability to do multiple facilities within Dynamics 365 Business Central will be an issue for you. Conversely, our team at Vicinity Software knows batch manufacturing requirements inside and out, and understands the challenges you face.
Vicinity Software does not sell ERP software. But we can work in partnership with your Microsoft Dynamics ERP provider to integrate the specific manufacturing functionality that will make you successful.
If you use a recipe or formula in your manufacturing process, talk to us before you select any ERP software to make sure you get all the features you need for batch manufacturing.
Contact us online or call 770.421.2467.
By Randy Smith, Vicinity Software, www.vicinitysoftware.com
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