| Process Manufacturing is much different from | | | | company may be doing certain tasks in a unique way |
| discrete manufacturing. In case of discrete | | | | and steps could be taken to replace or improve |
| manufacturing, the company makes products on a | | | | them. Without a detailed analysis of requirements and |
| shop floor, with the end products being easily | | | | business processes, it would be difficult to evaluate |
| identifiable. In simple terms, the discrete product can | | | | an ERP solution or to predict its potential to be a |
| be broken down to retrieve its basic components. | | | | perfect fit for the company. |
| Most common examples of discrete manufacturing | | | | For example, a large cosmetics manufacturing |
| would be automotive manufacturers, consumer | | | | company implemented an ERP system, however |
| electronics, the aerospace industry, and household | | | | after a few years, it did not realize complete value |
| appliances. Process manufacturing on the other hand | | | | as some of their existing processes still had to be |
| deals with formulas and recipes and the end product | | | | done manually. Real time inventory tracking was not |
| cannot be broken down to get its original | | | | a robust feature of their ERP system. In fact the |
| components. Common examples would be paints, | | | | employees had to manually count the stock to |
| chemicals, pharmaceuticals, and the food and | | | | ensure availability to fill open orders. |
| beverage industry. | | | | Purchasing planning and scheduling took a beating and |
| Most of the companies in these industries have | | | | the company began making mistakes on purchasing |
| sophisticated software applications to govern their | | | | inventory, at times investing more than required, |
| business processes. Highly popular ERP systems like | | | | hence increasing the cost of inventories. Such |
| SAP and Oracle are commonly used in these firms. | | | | requirements are specific in process manufacturing |
| There are many local vendors as well providing | | | | industries which the company failed to oversee. It |
| custom made applications. | | | | also did not have robust capabilities in defining item |
| However, a lot of companies jump into purchasing an | | | | and lot characteristics which was becoming a concern. |
| ERP system, without doing a thorough analysis of | | | | Eventually they had to re-invest in another ERP |
| their business processes and what solution would fit | | | | system. To avoid such pitfalls companies must be |
| them best. For example, even in case of | | | | better prepared and should do extensive planning on |
| manufacturing there are many styles from job-shop | | | | key issues before evaluating a vendor for ERP |
| to highly complex automated systems like robotics. | | | | selection. The anticipated ROI, ERP system |
| The solution that is chosen must support the | | | | functionality, pricing, vendor capabilities, technical |
| business processes, the style of manufacturing and | | | | issues like platforms and customization, need to be |
| the business model of the company. For instance the | | | | analyzed well before evaluation. |
| interfaces required for a highly configured machine | | | | There are some good products in the market which |
| cannot be the same as that of a high speed | | | | are tailor-made or industry specific. For example |
| automation machine making a hundred pieces an hour. | | | | BatchMaster specializes in process manufacturing. |
| This is probably the reason why most companies fail | | | | Industry specific applications would be a good option |
| or are unhappy with their ERP investments. | | | | to consider as the customization required would be |
| This makes it absolutely crucial for companies to | | | | less and the ERP system would have evolved over a |
| identify their critical success factors (CSFs) or the | | | | period of time with installations in different companies |
| processes that are critical to their businesses and | | | | within the same industry. |
| need to be automated. Moreover, it is always | | | | Finally if a company is proactive and has a clear ERP |
| important to document the requirements so an easy | | | | vision, with the expectations in place, it would only be |
| comparison can be made at a later stage. | | | | that much easier for the company to choose a right |
| Many companies do not do a comprehensive study | | | | system to suit its business, and to be a right fit in |
| of their existing business processes. For instance a | | | | the long run. |