chemical companies use ERP software to improve profitability

When choosing enterprise resource planning (ERP) solutions, chemical companies are faced with some special challenges related to work style and financial tracking. However, as long as there are suitable partners, chemical companies can use the extraordinary advantages of ERP software platform to improve efficiency and profitability.


Ten years ago, ERP solutions were less flexible and did not provide the industry specificity needed to be fully effective. However, today's solutions have a wide range of features and specific details that chemical companies need to succeed. ERP solution is a platform integrating various manufacturing components, including operation, finance, human resources, supply chain, sales and marketing.


By storing and sharing data in a single system, employees in chemical companies can better understand customer relationships, make more informed decisions in real time, and develop new cooperation opportunities within and between suppliers.


The following is a detailed introduction of the eight operational and accounting challenges facing the chemical industry, and how the correct ERP solutions can effectively deal with these challenges.


1. Compliance


chemical companies are facing a lot of regulatory obstacles and compliance requirements. Depending on the materials produced in-house, the company may be supervised by the environmental protection agency, the occupational safety and health administration, the Ministry of transport and the food and drug administration.


2. Hazard analysis


An ERP needs to be able to calculate many data points generated in the manufacturing process. Information needs to be obtained from suppliers, intermediate products and finished products. Characteristics including boiling point, shelf life, toxicity, flammability or corrosivity, production batch, customer and QA / QC attributes need to be recorded and reported and available on demand.





3. Capacity optimization


An important advantage of migrating to an ERP solution is that you can leverage this capability to maximize operational usage. Today's ERP is able to coordinate scheduling with available job volumes, orders, inventory, expected delivery times, and configuration requirements.


4. Multidimensional inventory visibility


At any given time, it is critical that employees see where the inventory is located and how it is being used in multiple locations. The company needs a system that can monitor and track multi-dimensional inventory across multiple factors, including:


Batch number, including specific attributes, shelf life and quality


Serial number, a subset of batch numbers, allowing individual containers (barrels, boxes, or large handbags) to be identified


Grade, a user-defined measure that allows variable costs or selling prices based on quality


Containers, tracking bulk products in their final containers (barrels, railcars, pallets, barrels, bags)


Disposal, another user-defined measure, allows companies to determine whether products are available for sale or production or not


Batch attribute, the quality identifier of the batch


quality guarantee period


5. Formula or formula management


Chemical industry companies rely heavily on recipes to track usage and maintain accurate and consistent end products. Tracking multiple measurement methods, integrating formulas with available inventory, ordering new supplies, and sizing the workshop are all key complexities.


6. Quality control


Because the quality, grade and supplier of raw materials change so much, quality control is very important for chemical companies who want to ensure the effectiveness and safety of their products and maintain their brand reputation.


7. Rework


One of the most frustrating parts of chemical manufacturing is the need to remix or rework. When a batch of products do not meet the quality control standards, there are usually four options: Scrap, rework, repair or remix. ERP should help these four possibilities from the perspective of accounting and operation.


8. Customer service


One of the most advantageous features of ERP today is that they can provide an overall perspective on customers. By integrating responses to marketing messages, sales pipeline data, sales history, and previous interactions, multiple employees can share, track, monitor, and provide insights into emerging issues.

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