Buying the proper manufacturing software for your process or discrete facility is as overwhelming as buying a new car because there are so many bells and whistles to review. You need a system that meets your specific criteria – no more, no less. Let’s break down discrete vs. process manufacturing, how ERP systems enhance them, purchasing considerations and how to pick the ideal solution.
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What is Discrete Manufacturing?
Discrete manufacturing follows a nonparallel model to construct a finished product such as cars, chairs, desks, smartphones, etc. Production is broken up into pieces and pulls everything together at the end. For example, if you manufacture cars, the engine can be made in Detroit, while the side and rearview mirrors could be created in Miami and melded together in California.
Some industries that utilize discrete manufacturing are aerospace and defense, automotive, electronics and consumer goods.
Primary Benefits
This process has several benefits, from enhanced product quality and improved management to diminishing machine downtime.
Strengthens Product Quality
Quality is vital to the success of your products. If you allocate poor or average merchandise, consumers will search for high-quality goods somewhere else. Whether you invest in a quality management module or a standalone enterprise quality management software (EQMS), you’ll have all the right tools to guarantee up-to-par products that’ll keep your customers happy and your profits high. These tools include change management, compliance management and corrective and preventive action (CAPA).
Enhances Customer Service
When you make high-quality goods and increase your productivity with automation, your customers will continue shopping from your facility. Investing in the ideal solution also offers real-time production data to avoid bottlenecks. Customer relationship management (CRM) accessories monitor client demand. Business intelligence (BI) examines crucial company metrics such as sales by region, day sales outstanding (DSO), salary competitiveness ratio and more.
Boosts Overall Management and Visibility
Gaining clear visibility and control over operations is a dream come true for companies. Instead of switching between different platforms, you can swiftly manage machinery, employees, jobs and other resources in one centralized location. There’s also real-time collaboration between departments and suppliers, so everyone stays on the same page regarding product recalls, updates, route changes, etc.
Decreases Machine Downtime
Preventive maintenance or the internet of things (IoT) — internet-based sensors — reduces downtime significantly for your drilling, turning or press machines. You receive quick alerts when devices need maintenance, are in use or awaiting jobs. You can predict when to update or fix your tools before they break down, saving you from performing these tasks during production.
Disadvantages
There’s one key disadvantage to this manufacturing practice. Without the right system, difficulties arise in keeping tabs on every subassembly and warehouse needed to build each piece of your product. However, if your new program offers warehouse management or invests in standalone warehouse management system (WMS) software, you can easily track all warehouse activities in one hub.
Key Features
A discrete manufacturing ERP system possesses various features such as product lifecycle management (PLM), financial management and bill of material (BOM) management. The key is finding the exact capabilities that benefit your discrete manufacturer.
Material Requirements Planning (MRP)
Schedule and allocate resources such as employees, raw materials, other inventory items, machinery, tools, etc., to the ideal jobs and projects efficiently. This module also comes with demand forecasting. Purchase planning and quality management to garner the best production strategies.
Get our Manufacturing ERP Software Requirements Template
Supply Chain Management (SCM)
Obtain real-time visibility into your supply chain, streamline good and material movements, build better relationships with suppliers and dwindle flaws within your system. Other attributes include special freight handling, security, order processing, compliance and collaboration portals.
Financial Management
Keep all your accounting needs from general ledgers and bank reconciliations to accounts payable and receivable in one centralized location. You can also cipher project expenses and create realistic budgets.
PLM
Keep everyone involved in the product’s cradle-to-grave cycle, including managers, stakeholders and suppliers, on the same page with real-time notifications on changes, recalls, material shortages, etc. Other requirements include:
- Risk management
- User access levels
- BOM management
- Product regulation and governance
- Simulation
BOM Management
Think of BOMs as recipes. They tell you how much raw materials are needed, the assemblies and subassemblies and machinery required to finish a product, along with total expenses. Some systems even allow you to transform BOMs into estimates, quotes or invoices.
Inventory Management
Gain real-time inventory alerts to avoid shortages or overstocking. Some tools even permit you to establish minimum quantity levels to avoid completely running out of ingredients. Leverage reporting and analytics, shipping, mobility, tracking and other features.
An example of a bookkeeping feature on a discrete manufacturing ERP software.
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What is Process Manufacturing?
Like cooking your favorite dish or assembling Lego sets, process manufacturing operates in sequential steps that lead to the finished goods or products. Process manufacturing takes natural materials and turns them into finished products.
For instance, a warehouse specializing in making brownies could use special fudge, butter, eggs and flour as raw materials. Once finished, you can’t disassemble the product to its original state due to thermal or chemical conversion (i.e., heat, time or pressure).
Other industries that employ process manufacturing include oil and gas, pharmaceuticals, plastics and metals.
Primary Benefits
This manufacturing process and software solution has several advantages, from saving money to automating operations for improved productivity.
Cost-Effective
A process manufacturing ERP can save you money because of automation and real-time data input. Instead of manually assigning resources and projects, you can do it with role-based dashboards and keep tabs on everything in a centralized way. Instead of inputting end-of-month data by hand, you can do it once and update it in real time, giving you more focus on high-priority tasks and boosting your productivity.
Higher Safety and Quality Control
Employee safety and quality management are high priorities because you need safe workers to create high-quality products. Process manufacturing can handle toxic chemicals and materials. Compliance tools help you meet employee safety guidelines and product quality rules, whether its locally or industry standard like the Food and Drug Administration (FDA) and Internal Organization for Standardization (ISO).
Faster Product Turn Out
When you automate back-office procedures with a robust platform, you save money and increase productivity because you shift to more vital responsibilities. Better productivity equals increased merchandise distribution, leading to more satisfied clients.
Disadvantages
Although this practice has many perks and attributes, it comes with a few limitations. These disadvantages include:
- Customization Difficulties: Customizing process manufacturing ERP isn’t easy, which is why it’s crucial to find a platform that possesses all of your ideal requirements.
- Batch Errors Wasting Time and Money: If a batch is contaminated or has expired ingredients, it can run the product’s quality. Factories have to quarantine and adequately dispose of clusters, which stops production and wastes time and money. Then you have to start from scratch again. The best way to alleviate this setback is to ensure your ingredients are always fresh and follow your recipes or formulas to a tee.
- Machinery Maintenance Reducing Productivity: Specific machinery can break down at any time. These breakdowns can even occur during production, causing downtime and profit loss. It’s possible to embed your tools with IoT sensors, so you obtain notifications when they need a tune-up or full-on maintenance, remedying unexpected downtimes.
Key Features
There are many features to mull over as you choose the best ERP for this manufacturing methodology. Here are some popular features to consider:
Lot Tracking/Lot Number Management and Traceability
Keep up with parts or ingredients associated with other products easily. If, for example, you need to know when brownie batches were contaminated somewhere before distribution, you can pinpoint which facility made the batch and if the ingredients were rotten quickly.
Batch/Recipe Management
Unlike discrete manufacturers, process manufacturers work with recipes and batches of materials. They have to ensure they get the exact measurements, or they may make defective products. Batch or recipe management tools permit you to manage ingredients, batch performance tracking and gathering production data.
Compliance Management
Verify local and standard compliances. Also, receive automatic notifications if these standards are updated, so you comply easily and avoid company suspensions or foreclosures.
Get our Manufacturing ERP Software Requirements Template
Supply Chain Management
Maintain supplier relationships and product movements efficiently. Rate suppliers accordingly, estimate customer demands with in-depth analytics and catch and resolve bottlenecks swiftly.
Inventory Management
Understand how many raw ingredients and materials are in stock, what you’re running low on and how to pinpoint items in real time. Leverage barcode scanning to rapidly count and add objects to your database.
Warehouse Management
Lastly, this tool eliminates the guesswork of tracking other warehouse activities if you own national or global plants. Thanks to this accessory’s centralized hub, you can examine other processes immediately. You can also govern picking, receiving, order and fulfillment management and inventory management.
An example of formula calculation on a process manufacturing ERP system.
Pricing Considerations
So which solution and process are best for you? We’ve compiled a handful of considerations to ponder as you look for a new system.
Are You a Process or Discrete Manufacturer?
As aforementioned, these practices contain distinct characteristics. Are you process or discrete? Do you craft your products in one location or make separate parts in numerous facilities? Do you use formulas and recipes, or do you follow blueprints? These and other questions will help you know the kind of operations your company utilizes and the type of program you need.
How Big is Your Facility?
Are you a global Fortune 500 or small business? Most systems are scalable, meaning that they can grow with your organization as you add more employees, machines and other resources. Are you looking to grow into a mid-sized or enterprise company in the next five years? Are you looking to scale down operations? You don’t want to invest in a platform with too many features, nor purchase one with too few modules.
What’s Wrong with Your Current Operations?
Why are you looking for a new solution? What’s wrong with how you manufacture products? Do you have a nontransparent supply chain? Do you lack proper accounting features? Knowing your bottlenecks will help you realize what obstacles you want your next system to resolve.
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Does the Vendor Have Knowledge of Your Industry?
Has your vendor worked with a mid-sized company that makes plastics? Does your vendor know what it takes to get accurate measurements for making a suitable batch of frozen waffles? Does the vendor have experience with multi-warehousing systems? Having a knowledgeable vendor solidifies your confidence in choosing the right solution. If you find that this reseller lacks knowledge of your industry trends and market concerns, it’s best to move on with a different provider.
Do You Need a New System or Integrations?
Do you need a brand-new platform, or do you need integrations? Let’s say, for example, that your program meets all of your manufacturing needs, but it lacks the proper project management and BI accessories. Or your current platform is an outdated legacy system that doesn’t streamline production. You may save some money if you answer this question honestly.
How to Pick the Right Software
Choosing the ideal solution is no easy task. There are too many vendors, features and deployments to keep up with, making the process overwhelming and draining. SelectHub, however, created a nine-step methodology called Lean Selection to alleviate the stress.
- Establish: Determine what’s wrong with your current operations and why you need a new system.
- Collaborate: Gather a software selection committee to collaborate better and understand what you’re looking for in new programs. Add department heads, internal and external users, executives, colleagues and users.
- Define: Draft a thorough list of features and requirements (i.e., manufacturing accounting, BOM management, general ledgers, CRM analytics, BI, etc.).
- Distribute: Assess how vendors measure up to your requirements list and eliminate those who fall short.
- Justify: Ponder on three questions: Do you want to buy a brand-new system? Do you want to invest in add-ons only? Or do you want to stick with your current platform and end your software quest here?
- Prove: Whether you’re searching for a new system or add-ons, sit down with potential vendors and ask for demos, use cases or proofs-of-concept (POCs), so they can prove that they meet your requirements. Score their demos accurately.
- Rank: Based on the requirement scores, demo scores and total cost of ownership (TCO), rank your top two or three solutions to prepare for the negotiation phase.
- Negotiate: Advance with your top-rank platform first and review their contract. If you find the agreement sketchy, take it to a lawyer or law firm for a second opinion. If you’re satisfied, sign the contract and set up an implementation plan. If not, move on to the next solution on your list and repeat this step.
- Sign: After careful considerations and negotiations, sign the contract and determine a practical implementation schedule.
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Final Thoughts
There’s no one-size-fits-all ERP software with every thinkable gadget and gizmo when comparing discrete vs. process manufacturing. A process ERP that ciphers percentages, quarantine batches, drums up specific decimals and regulates your calculations may be what you need.
Or a discrete ERP that maintains all of your machinery, clarifies product tracking, simplifies your bookkeeping processes and drafts product plans could tickle your fancy. Whatever you decide, just know that your ERP system should meet the specific criteria of your manufacturer to enhance productivity, not worsen it.
How has software enhanced your process or discrete manufacturing practices? Let us know in the comments.