Infosys-Oracle Blog

Before, we go ahead, let’s see what process manufacturing is:

Process Manufacturing is where the creation of a product is based on a continuous series of processes being applied to raw materials. As per Wikipedia "The simplest and easiest way to grasp the definition of process manufacturing is that, once the output is produced, it can't be distilled back to its basic components. Think about it. Once you make a can of soda, you cannot return it back to its basic components such as carbonated water, citric acid, and other ingredients. You cannot put the juice back into the orange. A car or computer, on the other hand, can be disassembled and the parts, to a large extent, can be returned to stock."

Some of the examples of Process industry include petroleum, chemicals, pharma, food & beverages, textiles, metal, wood, minerals, paper, printing & publishing.

How it differs from Discrete Manufacturing? First & Foremost, the terminology used is different.. Talk about BOM, Components, Job Orders, Assembly, Fabrications to process manufacturer, and he will give you strange look. It is like talking Chinese to an American   Talk about Formulations, Recipe, Mixing, Blending, Transforming, and you have created a great first impression

Another difference is inherent variability in Raw Material. Most of the Raw Material is sourced from Organic sources & hence the variability. In fact, the overall objective of process manufacturing is to keep the variability within acceptable range in final product. What is acceptable range? This question leads to another downstream question, how do we measure the variability? There are lots of technical parameters used to measure the variability, few of them are Generic like Density, Temperature & few are Industry Specific Parameter, for ex: %SNF for Milk. You can see the importance of Quality in process manufacturing.

Raw Material in process industry varies with time also. In most of the cases, Expiry Date come attached with Lots. In few Perishable products, like milk, Curd etc, Shelf life is short and hence Supply chain planning for such products is critical to achieve maximum benefit & minimum waste.

BOM & Formula are not just the difference of terminology. While in BOM, there is only one output, in Formula, there can be more then one products. To add to complexity, these products may not be produced in final stage, but can be in intermediate stages too. Another point to note about formula is that, it not only contains Ingredients, but also their technical parameter. Most of the Process industries rely on Computer added formulations to derive the approximate quantity & quality of product produced. 

Another complication is Compliance & Traceability. Take example of Pharmaceutical industry, where 21 CFR Part 11 is applicable or F&B Industry where regulations like Bio terrorism Act, HACCP are applicable. Chemical Industry which handles hazardous material has to adhere to numerous Safety Regulations. Remember the Bhopal Union Carbide Case, and importance of such compliance will immediately clear. Lot traceability is another area to look into to ensure minimum damage if a Bad Lot is somehow used in few batches. A bad lot can risk not only the Image of company, but may result in Criminal proceedings.

So, what should we take out from above analysis? Process Industry's challenges are far greater then Discrete Manufacturer. It not only has to face generic challenges like Globalization,  Competition, Reduced Time to Market but also process specific challenges like Stricter Compliance, Variability, Process complexity.  How Process industries are using ERP to address some of these challenges will be subject matter of my future blogs.