What Kind of Manufacturer is Your Company: Process or Discrete?

In these times, there is rarely any product that consumers purchase and make daily use of that did not go through the manufacturing process. The manufacturing process usually derives from the extraction of raw materials to be altered then made into finished goods (most commonly on a large scale).  What is the manufacturing process, really?  One thing for sure is that it is an industry that strives to ensure the quality of the revolving market that “makes the world go round” for consumers and their families. 

The proper definition of Manufacturing is the use of machines, tools, and labor to produce goods for use or sale.  It is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.  Whether process (the branch of manufacturing associated with formulas and recipes) or discrete (concerned with bill of materials and routing), ERP (Enterprise Resource Planning) systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company.  However, just like the products they produce, discrete and process manufacturing software address different business issues and solve different problems.   

All manufacturers need sales and invoicing tools, financial modules such as accounts payable, general ledger, and a very strong financial reporting package.   The differences are usually within inventory tracking and costing, units of measure, batch and fill tickets for the process manufacturer, bill of materials for the discrete manufacturer.   These are just a few of the operational differences and I could probably bore any reader with the details…  

Understanding these differences would lead to the conclusion that different manufacturing software for different types of manufacturers should be in place depending on what is produced.  However, often times that is not the case.  Manufacturer business owners often do not realize that they are creating extra work completing ‘work arounds’ and that their inventory is probably not valued correctly if they are running a discrete manufacturing package but are in fact a process manufacturer. 

Over the years I have encountered many process manufacturers that were indeed running their operations on a discrete software package that did not convert pounds to gallons to eaches correctly or even consider the density or other physical properties to make the conversion.    In fact, once upon a time we proved to a company that they had been calculating their inventory costs incorrectly due to conversion factors for years.   Of course they were using a software package that was designed for eaches only.  It is true that in some cases a discrete software solution can accommodate a simple process manufacture.  Overall that is not the case.  Chemical, cosmetics, pharmaceutical, and most food companies need a true process manufacturing solution.     

If you are a process manufacturer or even mixed-mode and your company is on a discrete manufacturing package, when it is time to change or upgrade your system please look at a true process manufacturing software package.  If you aren’t sure what your software package is designed for, then just go to the software’s home page and if it does not have a statement or link to your industry then odds are it is not the right operational package for your business. 

Good examples of process manufacturing packages for small to mid-sized companies are as follows:

• BatchMaster for Dynamics GP
• Vicinity for Dynamics GP
• Horizon’s for Dynamics GP

All three of these packages provide the process manufacturer with the operational solutions needed along with strong financial and distribution solutions for the process manufacturer.  

A couple of great discrete manufacturing software packages are:

• Dynamics GP Advanced Management Suite
• Horizon’s Manufacturing

At Custom Information Services (CIS) we understand that each business has unique requirements and how to use software technology to meet these challenges.  CIS has been working with manufacturers since 1989.  For more information, contact Nancy Phillippi at (817) 640-0016 x 109  or email nphillippi@customis.com

What Kind of Manufacturer is Your Company: Process or Discrete? is a post from: ERP Software Blog

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