Learn More About Process ERP Software
What is Process ERP Software?
Process enterprise resource planning (ERP) software is a manufacturing ERP solution that automates and streamlines process manufacturing operations, optimizes resource allocation, improves productivity, ensures quality control, and achieves operational excellence. It provides a centralized platform for managing and integrating various processes and functions within the manufacturing organization, which leads to improved efficiency, cost reduction, and better decision-making.
This type of manufacturing ERP system caters to the specific needs of process manufacturers, which combine ingredients to make finished products in batches that cannot be easily separated once they are produced (as opposed to discrete units). The business processes of a process manufacturer are unique since the production process typically involves mixing and blending ingredients through chemical reactions, heating, or cooling.
What Types of Process ERP Software Exist?
Depending on how the software is delivered and deployed, there are several types of process ERP solutions:
Delivery options
Standalone process ERP solutions focus exclusively on this type of manufacturing and cannot be used for other types of production, such as discrete and engineer-to-order (ETO). A more extensive solution, such as mixed-mode ERP software, combines two or more manufacturing types (process, discrete, and ETO).
Deployment options
While cloud-based or software as a service (SaaS) is now the norm, some solutions are still delivered on-premises. A hybrid model combines the two options and lets buyers choose between them.
What are the Common Features of Process ERP Software?
The following are the key features within process ERP tools that can help users with the automation of manufacturing operations:
Production planning and scheduling management: The software helps process manufacturers plan and schedule production activities based on demand forecasting, resource availability, and capacity constraints. It creates and optimizes production schedules to minimize lead times, maximize resource utilization, reduce waste, and meet customer demands efficiently. As opposed to discrete production, which uses bills of materials (BOM), process manufacturing requires recipes and formulas to define how to combine ingredients to make the finished products.
Supply chain management: Process ERP software streamlines supply chain operations by integrating suppliers, distributors, and other partners into manufacturing. It facilitates efficient procurement, order management, and logistics management. As a result, manufacturers can track the movement of raw materials, manage supplier relationships, optimize transportation, and ensure timely delivery of products.
Financial management: This software provides modules to manage financial processes, such as accounts payable, accounts receivable, general ledger, and financial reporting. It integrates financial data with other operational functions, such as production, allowing businesses to monitor profitability, costs and expenses, manage budgets, and generate accurate financial statements.
Sales and customer relationship management (CRM): ERP systems rarely provide the most advanced sales and CRM features in the market, and process ERP is no exception. It is, therefore, essential to integrate these solutions to find and keep customers, define and manage product pricing, and market to different market segments and personas.
Reporting and analytics: The software generates reports and analyses on various aspects of manufacturing operations, providing valuable insights into performance, efficiency, and profitability. It allows businesses to monitor metrics and key performance indicators (KPIs), identify trends, and make data-driven decisions to optimize operations and improve overall performance.
What are the Benefits of Process ERP Software?
Process ERP provides business processes and functionality that bring manufacturers the following benefits:
Focus on process manufacturing: Process ERP was explicitly designed for manufacturing businesses from industries that process ingredients and raw materials. This makes it the ideal solution for production in niche segments of the manufacturing industry, such as food and beverage, chemicals, and pharmaceuticals.
Integrated system: Like other ERP solutions, process ERP is an integrated solution for manufacturing companies, which provides a single data repository for all operations. This single source of truth improves productivity and business performance by ensuring everyone in the company can access the most up-to-date information.
Cost reduction: By optimizing processes and improving resource utilization, process ERP software helps reduce costs. It minimizes waste, streamlines inventory management, optimizes production schedules, and improves supply chain management. These cost-saving measures can have a significant impact on the overall profitability of the manufacturing operations.
Improved efficiency: ERP software integrates and streamlines various processes within the manufacturing workflow, improving efficiency. It enables better coordination and communication between different departments, such as production, inventory, purchasing, and sales, leading to reduced lead times, optimized resource allocation, and increased productivity.
Enhanced visibility and control: Process ERP software provides real-time visibility into the entire manufacturing process, from raw material procurement to finished product delivery. This visibility allows management to monitor operations, track progress, identify bottlenecks, and make informed decisions. It also facilitates better real-time inventory management, demand planning, and forecasting.
Who Uses Process ERP Software?
All employees of a process manufacturing company can benefit from using this type of software, the most important being:
Production managers: The team responsible for automating process manufacturing processes benefits most from using this software. Production managers use process manufacturing to define, implement, and monitor production plans and optimize resource allocation, such as raw materials, employees, and equipment.
Quality control professionals: Quality is critical for process manufacturing since production errors may compromise a batch of finished products. To avoid this, quality control professionals use process ERP for traceability and to ensure that the finished product is within the standards and safety requirements required by customers or imposed by governments.
Logistics: Since ingredients used in process manufacturing can have a limited shelf life or be hazardous, buying, moving, and storing them is critical. The finished products can be perishable and may require special transportation, such as refrigerated trucks, which makes shipping more complicated than in other industries.
What are the Alternatives to Process ERP Software?
Alternatives to process ERP can replace this type of software, either wholly or partially:
ERP systems: ERP systems may include features for process manufacturing, but these are only sometimes advanced enough to help process manufacturers manage their entire business.
Mixed mode ERP software: As the name suggests, this type of software combines two or more manufacturing types. Process manufacturing is usually mixed with discrete for companies that need both.
Software Related to Process ERP Software
Related solutions that can be used together with process ERP software include:
Quality management systems (QMS): While all process ERP solutions provide functionality for quality management, integration with separate QMS solutions may be required, especially for highly regulated industries such as chemicals or pharmaceuticals.
Product lifecycle management (PLM) software: Product development is critical for process manufacturing, and process ERP solutions usually cover only part of the product lifecycle. Through integration with PLM software, companies can develop products, manufacture and improve them, and monitor their quality and profitability.
Manufacturing execution system (MES): While process ERP solutions include features for shop floor planning, integration with MES may be required for advanced functions such as workstations and equipment monitoring for production.
Supply chain management software: Most process ERP systems provide basic supply chain features, but integration is often needed with other logistics software such as warehouse management and demand planning.
Asset management software: The assets used in process ERP can significantly impact the quality of the products manufactured and the safety of the personnel, which is why this type of software integrates with asset management solutions to ensure proper and optimal use of industrial equipment.
Business intelligence software: Process ERP usually includes advanced reporting and dashboards, but integration with business intelligence solutions may be required to gather insights on optimizing production and resource utilization.
HR software: Some process ERP solutions offer workforce management and HR modules, but it is most common to integrate with HR software for better human resource allocation and optimization.
E-commerce software: While process manufacturers usually sell their products through distributors, more and more companies are using e-commerce software for direct-to-consumer sales.
Challenges with Process ERP Software
Process ERP solutions can come with their own set of challenges.
Vertical focus: Due to the vertical emphasis, this type of software isn't a good option for the business needs of manufacturers in other industries, such as industrial equipment, fashion, apparel, or electronics.
Cost: While most process ERP solutions are now cloud-based, they may still be expensive, especially for small and mid-size companies. This is due to these systems' complexity, making them difficult to implement and maintain.
Which Companies Should Buy Process ERP Software?
The following companies can benefit from process ERP software:
Manufacturers: Process manufacturing companies are the primary beneficiaries of this type of software since other ERP solutions don't have the functionality needed for their specific needs.
Production outsourcing providers: When manufacturers outsource production operations, their partners must use process ERP to manage production cycles, inventory, and logistics. These companies still need access to ERP software to monitor outsourced operations and track manufacturing costs.
How to Buy Process ERP Software
Requirements Gathering (RFI/RFP) for Process ERP Software
Requests for information (RFIs) and requests for proposals (RFPs) for process ERP can include thousands of criteria, and buyers need to make sure that they prioritize what matters most of them. It is, therefore, critical to include criteria for process manufacturing and the buyer's industry. For example, toxic chemicals require special storage conditions, and food ingredients have expiration dates that companies must consider when planning production.
Compare Process ERP Software Products
Create a long list
A long list can be created by including ERP solutions that include process manufacturing functionality or those that focus exclusively on this type of production. Discrete ERP software should not be considered since critical features for process manufacturing, like batch production, are not supported.
Create a short list
To further differentiate between products in the long list, buyers can look for software specifically designed for their industry. For instance, a pharmaceutical company may not benefit from using process ERP solutions focusing on food and beverage, even though the functionality may be similar.
Conduct demos
To better understand how process ERP systems may help them, buyers need to see detailed demos of the solutions from the short list. In addition, vendors must show business processes for various departments like production, logistics, or accounting. An example would be the ability to run manufacturing resource planning (MRP) calculations to determine what resources and equipment are needed to manufacture a specific product in different quantities and variations.
Selection of Process ERP Software
Choose a selection team
Selecting an ERP platform for process manufacturing is a complex project, so it is critical to involve subject matter experts from each department, from production and logistics to sales and accounting.
Negotiation
To successfully negotiate during the process ERP software selection, buyers need to have as much information as possible about the products, the vendors selling them, and their partners.
While the cost of the software is essential, the features are critical, as well as customer references and feedback on the pros and cons of the software.
Final decision
The final decision should take into consideration all the factors mentioned above: functionality, price, customer feedback, as well as the services provided by the vendor, such as implementation, support, and customization.
Process ERP Software Trends
Production outsourcing
Many manufacturing companies outsource production overseas, meaning they may not need process ERP tools. However, their partners will. These companies may choose between using the same system as their partners to control operations or focusing only on the front and back offices, like sales and accounting.
Internet of Things (IoT)
IoT connects equipment across multiple geographical locations, improving collaboration between numerous company production plants. It can also improve visibility into the production processes across locations and departments, thus eliminating or reducing downtimes and bottlenecks.
Artificial intelligence (AI)
While in its early stages, AI for process manufacturing has the potential to increase productivity, reduce waste, and optimize production significantly. Processing large amounts of data in real time can help production managers identify issues before they occur and find opportunities to reduce production costs or improve the quality of their products.
