Challenged with meeting difficult regulations and a saturated, cut-throat market, chemical manufacturers operate in a notoriously difficult sphere. Manufacturers operate to tight deadlines with tight costs and even tighter regulations. As such, it’s very easy for chemical manufacturers to become creatures of habit and confine themselves to manufacturing processes that get the job done but at a cost to overall productivity.
Clearly, this is an issue and one that can develop from having an insufficient IT infrastructure or outdated software in place. The right ERP software system can help manage all of the key concerns for chemical manufacturers, from regulation compliance to greater process transparency. However, some chemical manufacturers continue to operate on out-of-date or insufficient software.
In this blog post, I provide a run-down of the challenges that many chemical manufacturers are currently facing, and discuss how they can overcome them:
Stay reactive to industry-wide price changes
As I’ve already mentioned, chemical manufacturers face significantly high costs for raw materials, in addition to stiff competition. Country-specific price drops can leave manufacturers vulnerable within the market. For example, the costs associated with accessing shale gas dropped significantly in the USA in 2014, putting strain on European chemical manufacturers who faced fiercer competition.
It’s impossible to control these types of industry-specific factors, but what manufacturers can do is maintain a tight grasp on their internal processes and costs. The enhanced visibility offered by an effective ERP solution tracks budgets, revenues and costs. When costs start to rise, you have the information available to counter it and minimise the impact it can have for your business.
The increased visibility will also highlight manufacturing process inefficiencies, where present. This offers yet another option to help combat rising costs and stay competitive.
Negate traceability difficulties
Unlike other sectors where the traceability of core materials isn’t as much of a priority, it’s a different story for chemical manufacturers. Strict regulations mean that each product needs to be fully traceable, should a recall or quality audit be required. Without this ability, sourcing the information required can be difficult, if not impossible.
With an effective support system and procedure in place, mining this data is simplified. As a result, it’s easy to identify the root cause of a product issue, and implement a product hold or recall.
An ERP system contains all of the relevant information in one place, ready for whenever you need it.
Review end-product performance
Lost in an increasingly complex manufacturing process, it’s easy to lose sight of the performance of end-products — what makes money and what doesn’t.
Complete end-to-end costs need to be considered, not just the price of raw materials. For example, the cost of equipment and servicing should be factored in to paint a true picture of the operational costs associated with a given product.
Rather than leaving the reality down to assumption, chemical manufacturers need to capture big data in order to realise the true costs of their operations. This type of data heightens visibility and awareness of anomalies on a day-to-day basis. This makes it simpler for manufacturers to alter their processes to drive operational efficiencies and ultimately gain an advantage within the market.
If you’re struggling with any of the above challenges, there is a possibility that your current software solution is inefficient. Ask yourself the following questions:
- Do I have visibility of all of the core manufacturing processes?
- Can I fully trace the products easily and efficiently?
- Do I fully understand the total costs associated with production?
If you answered no to any of the above questions, it may be time to reconsider your software solution. To find out more about K8 Manufacturing, our proprietary ERP software, contact us today or experience it for yourself by requesting free a demo.