How ERP for Chemical Manufacturing Achieves Operational Excellence

What is ERP for Chemical Manufacturing Industry?

ERP for Chemical Manufacturing is a dedicated software that supports the unique requirements of the chemical manufacturing industry and provides a technological platform to meet their long-term and strategic goals.

 

ERP Software improves efficiency in various business operations such as procurement, production, inventory & supply chain, customer support, and financial management. It empowers businesses with cost planning and analysis, formula management, sales, accounting, quality assurance, and batch production modules.

Chemical Manufacturing Industry

India is the sixth-largest chemical manufacturer in the world and it is expected to reach $290 Billion by 2027. The Indian chemical industry consists of agrochemicals, industrial chemicals, specialty chemicals, and pharmaceuticals.

 

Several factors are influencing the expansion of this industry. Technological advancements, increase in the domestic demand for consumer, pharma & agrochemical products, easy availability of raw materials, modernization of the technology, and favourable Government policies.

Operational Challenges Faced by Chemical Manufacturing Industry

• Raw Materials Cost

The chemical manufacturing industry heavily relies on the supply of raw materials such as crude oil, coal, natural gas, limestone, and sulphur, among others. Crude oil and some other raw materials are highly volatile and their prices keep fluctuating from time to time. As a result, keeping raw materials costs under control can be a greater challenge for these companies.

• Inventory Wastage

Chemical manufacturing companies also suffer from inventory mismanagement. Excessive or unsold inventory can lead to inventory waste, increase storage and holding costs, and unnecessarily tie business capital to excessive stock. It can be a net drain on business profitability.

• Transport Disruptions

The chemical manufacturing industry deals with heavy machinery with large moving parts and hazardous chemicals. As such, it is highly reliant on the transportation networks. Human errors, transportation delays, congestion, and accidents can increase transportation costs and lead to business disruptions.

• Complex Regulatory Environment

The chemical manufacturing industry works in a complex regulatory environment, and it has to meet global industry standards. Compliance with local and global regulations and industry standards is not only complex but also costly. Moreover, the laws pertaining to public safety, environmental protection, and the chemical industry, keep changing from time to time.

• Massive Data

The industry handles massive data and maintaining it can be a challenge in itself. This data consists of data points, sample results, equipment information, vendor & customer information, and financial data, among others. To bring efficiency throughout different business processes, it’s important to manage this massive data in an orderly manner.

How ERP Helps Chemical Manufacturers Improve Operational Excellence?

• Improved Data Quality

ERP system centralises information from all business departments, including other data sources such as laboratory data and data captured from sensors by Internet of Things (IoT) devices. It enforces strict data quality and integrity rules and provides powerful tools for data cleansing and validation.

 

• Aggregates data from many sources organisation-wide
• Provides data standardisation and consistency
• Unified and reliable Single Source of Truth
• Up-to-the-minute access to organisation-wide information
• Serves as a single reference point

• Predictive Maintenance

Equipment and machine failures can affect the performance and business operations of chemical businesses. One of the key benefits of using ERP is predictive maintenance which helps identify machine downtime & equipment failure, which enables businesses to minimise disruptions in their activities. Not just that, the machine logs and failure data can also provide useful diagnostic information to optimise performance and improve business productivity.

 

• Prevent costly machine breakdowns
• Integration with Internet of Things (IoT) devices
• Supports condition-based & real-time equipment monitoring
• Provides unprecedented visibility into organisational assets
• Reduces repair costs, and unplanned downtimes

• Meet Regulatory Requirements

With ERP for Chemical Industry, chemical manufacturers can create Standard Operating Procedures (SOPs) for the safe handling of hazardous chemicals and substances. This helps them effectively comply with complex regulatory requirements, and prevent hazardous accidents, and harm to humans and nature.

 

• Streamline generation of Financial Reports
• Easily manage compliance-related documentation
• Enhances traceability by recording every procedure
• Helps gain regulatory approval for drugs and other products
• Get detailed information about changes to processes, and organisational policies

• Eases Production Complexities

With ERP, businesses can leverage higher asset capacity utilisation, optimised production planning, batch management, and work order processing, which eases production complexities.

 

• Manage critical aspects of the production process
• Predict production requirements and volume of customer orders
• Eliminate manual approvals in the production process
• Address production and quality issues promptly before they damage your brand identity
• Optimise manufacturing operations, and speed up the production process

• Supplier Management

ERP for Chemical Industry transforms the traditional order processing process and streamlines various tasks such as vendor management, order processing, and invoice generation, to improve the supply chain process. It helps by building a complete database of the suppliers, tracking their performance, and minimising procurement costs by negotiating with suppliers.

 

• Automates supplier selection, Purchase Order generation, and other tasks in the procurement process
• Monitor supplier performance, identify and mitigate risks
• Get up-to-date information about inventory threshold levels
• Improve coordination, automate demand planning, and manage the movement of goods
• Develop and execute supplier contracts

• Precise Batch Tracking

ERP solution provides precise batch tracking from the procurement of raw materials to the delivery of finished goods. This provides traceability and compliance with industry regulations and international quality standards and helps protect the consumer from defective products. Moreover, it provides a comprehensive tracking of batches that contain defective products and identifies the source of the origin.

 

• Group stocks sharing similar properties
• Track expiration dates of stocks
• Trace the batch of defective stocks
• Increased precision in inventory management
• Digitise batch number tracking

Summing Up…

The chemical manufacturing industry is a complex and highly regulated industry that faces various challenges from the supply of raw materials, machine maintenance, and inventory management to adhering to complex regulatory requirements. ERP for Chemical Manufacturing offers real-time visibility into business operations, inventory forecasting, and precise tracking, and helps address these issues.

 

Sage X3 provides unprecedented visibility across disparate business processes, improves operational efficiency, and provides abundant tools to ease complexities, achieve exponential growth, and seize new opportunities. It is a must-have tool for businesses operating in the modern business landscape.

 

• Author Bio:- Sneha Rakte is a specialist in communication who excels at recognizing client requirements. She produces persuasive sales copy and high-converting content. She currently works with Sage Software Solutions, an industry leader in supplying small and medium-sized enterprises in India with high-quality ERP software and CRM solutions.