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by Forrest Burnson,
Market Research Associate
Last Updated: September 30, 2016


A process manufacturing system must balance four constraints. First, the batch size is constrained by the amount of product on order and stock quantities to be kept on hand. This is particularly key when using materials or creating a product with a limited shelf life. The second constraint is ingredients, as the most limited ingredient determines how much product can be made. Then, there’s packaging inventory, and one of the challenges of process manufacturing is that you need to store the final product in something. The fourth constraint is capacity—or the ability to make a product within the production facility itself.

The critical function for a process manufacturing system is inventory control. One important feature for the inventory system is the ability to manage different units of measure, for example, determining how many liters of an item are available when it is received in 55 gallon drums. Related to inventory is recipe management, how to alter the formula to make a certain amount or to use available inventory. A process manufacturing system can be part of an enterprise resource planning (ERP) system, or be part of a best-of-breed set of solutions. Integration with a manufacturing execution system (MES) is also possible.

Accounts payable, accounts receivable, payroll and general ledger are standard. Most installations use on-premises equipment. Cloud-based options are available; software as a service (SaaS) viability is primarily dictated by the value of installed technology base but projected maintenance costs of both hardware and software are an important factor.

Common Features of Process Manufacturers Software

In evaluating software, process manufacturers should consider the following functions to meet their unique requirements:

Delivery-driven production Delivery-driven production matches the batch size to the amount on order plus the quantity to be kept on hand. The system should also verify that all other constraints are met.
Ingredient-driven production Ingredient-driven production matches the batch size to the available quantities of the ingredients on hand. The system should also verify that all other constraints are met.
Packaging-driven production Packaging-driven production matches the batch size to the finished amount that can be packaged with materials on hand. The system should also verify that all other constraints are met.
Capacity-driven production Capacity-driven production matches the batch size to the maximum capacity that the floor can produce. The system should also verify that all other constraints are met.
Critical path production If the process has stages with delays in between, such as a fermenting stage, then the system can match orders of ingredients to the time when they are required. This can save money in initial production costs by delaying purchases until required but runs the risk of loosing a batch if a required ingredient is not available in time.
Expiration tracking Both ingredients and products can have limited shelf lives. The system needs to track expired and close-to-end-of-life inventory.
Recipe management The system should include recipe management, including ingredient substitution. In some cases, ingredients are encoded to keep recipes secret.
Lot management Each lot must be identified and tracked. The ingredients of each batch must be tied to their individual batch number as well.
Yield variances The system should track actual yield versus expected yield for each batch. The system should report excessive variance based on user-defined thresholds and indicate if variances are so large that regulating agencies should be notified.
Current Good Manufacturing Practice (cGMP) compliance cGMP compliance is required for many regulatory agencies at the state and federal levels as well as for insurance purposes. The system should produce required compliance reports.
Units of measure management The system should convert units of measurement as required for inventory management, order processing, receiving and batch production.
Available to promise, capable to promise Available to promise (ATP) and capable to promise (CTP) are measures of manufacturing capacity. The system should calculate the ATP and CTP for any stock item, accounting for ingredients on hand and any work in process.
EPA and OSHA compliance Manufacturers that make, use or have byproducts that are highly hazardous chemicals (HHCs) must comply with the EPA’s Risk Management Program (RMP) and OSHA’s Process Safety Management (PSM) regulations. The system should produce required compliance reports.

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