One of the ways that manufacturers can be classified is as discrete or process; this describes the type of manufacturing processes involved (there is a third type, mixed mode, which combines both). Your typical small- or medium-sized manufacturer has better things to do than care about whether they are process or discrete. However these distinctions are really quite useful when choosing an ERP system. Knowing the differences will help you understand the types of challenges your ERP system will need to address.
Discrete manufacturers make items from a bunch of other items. You can take a discrete manufacturer’s product apart into a bunch of other discrete parts.
The ERP system for discrete manufacturers needs to keep track of parts, whether they are things like nuts and bolts, or completed engine assemblies.
Typical challenges for discrete manufacturers include the following:
- Balancing inventory investment with customer service levels
- Controlling product design changes (for batch manufacturers)
- Ensuring the quality of parts and raw materials
- Identifying and responding to seasonal demand patterns
- Managing component requirements
- Reducing lead times
- Reducing forecast errors
- Synchronizing supply with customer demand
Process manufacturers make products using formulas and recipes rather than individual items. You can’t take a process manufacturer’s product apart after manufacturing.
Food, chemicals and plastic extrusion products are all examples of products from process manufacturers.
The ERP system for process manufacturers needs to keep track of ingredients. This means you need to track weights, volumes and, in many cases, expiry dates.
Typical challenges for process manufacturers include the following:
- Accommodating variable end-products which result from regarding and unpredictable chemical processes
- Controlling product formula changes
- Monitoring the quality of raw materials before and during production
- Managing complex production recipes
- Managing different units of measure for raw materials and recipes
- Tracing products and raw materials
Use this information to help you determine what ERP software solution will best enhance productivity and improve the bottom line for both process and discrete manufacturing environments.