Chemical

Managing Chemical Compliance With an ERP

Managing Chemical Compliance With an ERP

Managing Chemical Compliance With an ERP 2400 900 Xcelpros Team

At a Glance

  • $700,000: A proposed increase to the maximum Occupational Health and Safety (OSHA) penalty for willful or repeat safety code violations.
  • $50,000: OSHA’s proposed hike in minimum penalties for these same willful acts.
  • $25,000: California’s additional safety violation penalties that are added to the federal fees.
  • $15,000: California’s maximum daily penalties for failing to fix these same issues.

Introduction

When used effectively, modern enterprise resource planning software (ERP) can help companies in several ways when it comes to chemical regulations:

  • Financial components of a chemical firm’s regulatory compliance solution.
  • Occupational Health and Safety Administration (OSHA) regulations.
  • Gathering, storing and managing material safety data sheets.
  • Gathering information from far-flung sources to create effective reports able to meet government criteria.

One study cited a multi-national corporation’s subsidiary using an ERP to comply with the Sarbanes-Oxley Act of 2002 (SOX).

“The findings demonstrate how managers can use an ERP to develop effective internal controls for the most common material weaknesses reported under SOX, thus providing insights into the crucial role of IT as a facilitator of control and reporting processes, and, more specifically, into the role, use and purpose of ERPs in relation to regulatory compliance,” according to the University of Greenwich.

Key points related to the chemical industry noted in this study include firms often failing to customize their ERPs for the specific requirements of the business, this applies specifically to chemical companies. Working with an ERP vendor experienced in the chemical industry helps ensure software works exactly as the company needs it rather than just installing an out of the box solution.

Unified systems like ERPs can help identify and evaluate hazardous substances. Manufacturers are then informed of the risk levels regarding the use and distribution of their chemical products. Identifying these hazardous substances early also allows manufacturers to act proactively, resulting in better safety.

Identifying Hazardous Materials With an ERP

Today, U.S. government regulations require the identification and labeling of hazardous materials. Modern ERP solutions can help create and manage safety data sheets (SDSs) along with any Globally Harmonized System (GHS) labels as required by the Occupational Health and Safety Administration (OSHA).

Each safety data sheet has 16 sections, 12 of which OSHA requires. These include:

  1. 1.Identification such as common names for the substance, recommended use of the chemical and restrictions on its use
  2. 2.Hazard(s) Identification such as signal words, pictograms and hazard statements
  3. 3.Composition and Information on Ingredients such as each substance’s Chemical Abstracts Service number
  4. 4.First-Aid Measures such as the most important symptoms
  5. 5.Fire-Fighting Measures such as the type of fire-fighting
  6. 6.Accidental Release Measures including emergency procedure and methods of containment
  7. 7.Handling and Storage including safe handling precautions
  8. 8.Exposure Controls/Personal Protection including OSHA Permissible Exposure Limits (PELs)
  9. 9.Physical and Chemical Properties such as the chemical’s odor, flash point and flammability
  10. 10.Stability and Reactivity including if the chemical is stable under normal temperatures
  11. 11.Toxicological Information including how the toxins are brought into a human body such as through inhalation or eye and skin contact
  12. 12.Other information including when the SDS was prepared or last updated

OSHA also suggests-but does not require-data on ecological impact, including:

  • The disposal of hazardous materials
  • The transporting of hazardous materials
  • Any other regulatory requirements, as needed

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An ERP manages regulatory compliance by comparing your existing SDSs to OSHA’s requirements. Once your safety sheets are updated to meet federal requirements, they are stored in a central repository for reuse. When the same ingredient is used in several products, a single update ensures all SDS are accurate.

That information can then be “chunked” and converted into the GHS labels. One method where ERPs excel is their ability to automatically generate QR codes for labels. Simply scanning the label with a cellphone can provide internet links to complete safety sheets.

When every second counts, such as in exposure to potentially hazardous chemical, workers don’t have hours to pour through filing cabinets looking for the right SDS. They might have a few seconds to scan a label, tap a link and then know what type of first aid to administer.

Other Safety Features in ERPs

Because ERPs access information from multiple sources, one way they help promote safety is by limiting access. When data access cards or passwords are linked to an ERP, they can help prevent unauthorized—and untrained—workers from accessing dangerous or harmful chemicals.

Your ERP can be used to restrict access to based on the individual’s role. This helps protect their help while also ensuring your data remains safe from prying eyes.

Using your ERP to monitor safety also lets you identify areas where more training is required. It can be tied to a learning management system (LMS). This in turn reduces the risk of workers with expired certifications or lack of skills.

Your SDS chemical management can help pinpoint at-risk employee groups, document recurring injuries, map frequent injury locations and then help you create a plan to correct them.

For example, many production employees are required to earn OSHA 10 certification. This ensures they have at least 10 hours of safety instruction.

OSHA 30 certification goes into greater depth when it comes to safety. Among its enhanced requirements are the following:

  • Hazard communication, which is useful in preparing and updating safety sheets
  • Materials handling, such as hazardous chemicals
  • Personal protective equipment (PPE)

Your ERP can identify which employees have active OSHA 30 certification, which have expired certificates and who lacks it. By denying access to unqualified workers, you reduce their risk of injury while also dropping your chances of being tagged for an OSHA violation.

Under a current proposal, OSHA provisions for willful and repeat violations could increase from a minimum of $5,000 to $50,000 per violation. The maximum fines would also go up ten fold to $700,000 per violation, Cal-OSHA states. These fines can change based on your location. If the violation occurs in California, for example, you can expect to pay as much as $25,000 for serious violations. These infractions can accrue daily penalties up to $15,000 for failing to solve the hazard issue.

ERPs and HazCom

OSHA’s Hazard Communication standard known as HazCom includes a checklist of 10 requirements.

These include the need to perform the following:

  • Train employees on the hazardous chemicals in the workplace
  • Instruct workers on how to recognize exposure to hazardous chemicals
  • Provide training on container label elements
  • Offer instruction on Safety Data Sheet (SDS) format and content
  • Explain to employees how to access SDSs
  • Update SDSs when new versions become available
  • Update the written HazCom program as needed
  • Explain to employees how to obtain a copy of the written HazCom program
  • Train employees on any in-house labeling system used
  • Make sure all container labels in the workplace are compliant

An ERP can ensure that data on any single chemical or hazardous material is thoroughly covered in your documentation. For example, each SDS can be linked to related labels and training materials. An update to the SDS ensures everything that flows from it is also current. That means your employees are safer as is anyone else who handles your products.

The Bottom Line

While some executives think of ERP’s, they consider ways to improve efficiency. The reality, however, is that ERPs can also be used to make workplaces safer for everyone. This is primarily achieved with constantly updated processes, and the careful labeling and management of any goods and raw materials.

Creating and updating an SDS in your ERP, for example, allows you to link all critical information about a product including labels, handling guidelines, storage requirements, training materials, and more. Increasing the safety and handling for everything you store and work with not only reduces the costs of injuries and by ensuring OSHA compliance, but you also minimize the potential for fines and infractions, which further helps to increase profits.

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

erp for chemical industry

Digitization of the Chemical Industry-Role of an ERP system

Digitization of the Chemical Industry-Role of an ERP system 1920 1080 Xcelpros Team

At a Glance

  • Chemical companies are more frequently moving towards full adoption of newer, digitized technologies and away from legacy systems and processes that historically operated in silos.
  • A well functioning Enterprise Resource Planning (ERP) system helps chemical companies in all parts of their operations- procurement, manufacturing, supply chain, vendor management, aftermarket, and more.
  • Implementing an ERP system doesn’t need to be a costly or daunting affair, provided companies go for the right system and take the help of experts where need be.
  • The ongoing Covid-19 pandemic has highlighted the need for chemical companies, with the sector providing most of the raw materials used in sanitizers and personal hygiene products.

While digital transformations have been a big help for the advancement of every industry; many sectors are still looking for new ways to utilize these technologies to their fullest. The chemical industry is on the cusp of legacy and advanced software and systems. Many companies have departments working in silos, manual documentations, slow change management mechanisms, data discrepancy issues, and an overall fall behind when it comes to digitization and automation. Chemical companies can address these issues and many others by investing in a high-end ERP system.

According to PwC’s 23rd Global Annual Survey, 42% of chemical company CEOs prioritized and invested in digital operations and related technologies.

This statistic indicates that now’s the time for chemical companies to systematically restructure their IT base and look at ERP as an option and a way forward to sustainable growth. After all, every sector is looking to leverage digitization to their benefit, including the chemical industry.

Here are five benefits of an ERP software system for chemical companies:

1.Digitization of Processes Leading to Accelerated TimelinesAn intricately designed yet easy to implement ERP system such as the Microsoft Dynamics 365 ERP comes equipped with artificial intelligence (AI) and machine learning (ML) based features that can automate many processes such as documentation, reporting, log entries, etc. This will reduce manual intervention (providing personnel with time to invest in more innovative aspects) and mitigate errors. Digitization in the chemical industry also helps expedite processes as the data can be accessed, altered, and verified in real-time. With Microsoft Dynamics ERP, chemical companies can realize the vision of going agile.

2.Fortifying Supply Chain Management (SCM)A comprehensive ERP for the chemical industry can facilitate better management of your supply chain by interlinking the departments and creating a data pool between finance, sales, and delivery. This way, you will digitize and monitor the procurement of raw goods, oversee warehouses, manage inventory more efficiently, channelize communication between different stakeholders, and streamline the workflow.

Figure 1: A Multi Pronged ERP System to Integrate Different Departments in a Chemical Company

A Multi Pronged ERP System to Integrate Different Departments in a Chemical Company

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3.Better Response Time and Quicker Time to MarketAn ERP for the chemical industry provides companies with a competitive advantage by giving better process and resource visibility, interconnecting departments, and avoiding bottlenecks. ERP is also integral in enabling chemical companies to identify their slow to move inventories and find quicker delivery options. This considerably reduced time to market. The overall product development process in chemical manufacturing companies is also expedited, thanks to the automation and optimization features of ERP systems, and this also results in quicker time to market.

4.Dynamic Change ManagementThe chemical manufacturing processes are subject to changes at different levels, from pre-formulation to production and packaging. These changes take time to get recorded and notified in a legacy system-backed environment, leading to delays. With an ERP, chemical companies can be more flexible and dynamic in their change management approach. As data becomes centralized and systems become integrated, more collaboration can occur, expediting the communication network in a change management ecosystem. Even at the supply chain and aftermarket levels, ERP allows better visibility across several stakeholders, enabling manufacturers to respond quickly to any changes.

5.Better Customer Service and Enhanced Customer SatisfactionLike any other industry, the chemical industry also strives to satisfy its customers- be it other industries or retailers or the end-user. With an ERP system for chemical manufacturing, companies gain insights into customer preferences, and they can anticipate market needs. Companies are choosing ERP systems designed to respond quicker and better to customer demands. With the ever-changing customer expectations scenario, chemical companies need to invest in a system that provides them with better customer visibility and agility to respond.

ERP is a solution of possibilities, and the chemical companies can turn these possibilities into opportunities. To survive, sustain, and thrive in this era of digitization, the chemical industry can make use of this software to integrate and collaborate better than ever before. It can also help to work with experience consultants in order to maximize performance and reduce costs. While every company has a different set of problems and requirements, well-designed chemical ERP software can efficiently address a number of issues.

Key Takeaways

  • The chemical companies must conduct a complete analysis of their as-is IT infrastructure and identify the right ERP system for their requirements.
  • ERP is a dynamic, flexible software, and thus chemical companies can evaluate comprehensively better many aspects of their operations with the help of a single system.
  • With learned ERP experts, chemical companies can go places in terms of operating smoothly and delivering consistently.

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Freight Visibility in the Chemical Supply Chain

The Importance of Freight Visibility in the Chemical Supply Chain

The Importance of Freight Visibility in the Chemical Supply Chain 1440 810 Xcelpros Team

Introduction

Having a complete view of inbound shipments is critical for chemical manufacturers. Maintaining accurate product counts, ensuring on-time delivery, monitoring rising transportation costs and complying with the Department of Transportation’s (DOT) regulations are some of the reasons.

Being a highly-regulated industry, chemical manufacturers are under constant compliance pressure at several levels, not just federal. Having a clear view of end to end supply chain visibility helps in mitigating supply chain challenges.

For example, a single federal hazardous materials violation can cost your company anywhere from nearly $80,000 to $500,000.

Failing quality controls and product recalls come with steep costs. Adding competition, transportation and supply chain challenges along with growing customer expectations means chemical manufacturers can’t afford to make any mistakes.

One of the more manageable costs is freight. It can be expensive and daunting to manage when your organization is making hundreds of shipments each day.

Accurate labeling becomes critical in terms of understanding what is in each shipment. Labelling is also vital when planning the materials classification and storage plus determining workforce requirements. Without a simple labelling method all workers can use, ensuring end-to-end supply chain visibility becomes a nightmare.

Consequences of Poor Freight Management

Poor freight management can lead to a number of different problems such as:

  • Damaged, lost, or late deliveries
  • Processing delays causing customer complaints
  • Delays in downstream work orders
  • Greater freight costs caused by carrier policies
  • Wasted raw materials and space due to unaccounted inventory
  • Decreased productivity due to poor scheduling

This list doesn’t account for accidents, either. What if hazardous materials get mixed up with another order? How will you know? Mistakes like this can be disastrous and even fatal.

One report states that unreported delays lead to an increase in inventory carrying costs, as high as 30-40% of total inventory costs.

Every stage of the chemical supply chain, from raw materials to end-user delivery, requires a significant amount of planning, tracking and implementation. Companies today need a centralized and secured solution that offers flexibility with the ability to integrate, automate, and be optimized regardless of location.

Enterprise labeling solutions boost efficiency, accuracy and reliability plus significant cost savings amid these highly regulated environments.

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Managing Hazardous Freight – Responsibility of the Manufacturer and Carrier

Penalties  for Violation of Federal Hazardous Materials

It’s the manufacturer’s responsibility for identifying hazardous materials, not the freight carrier’s. Whenever chemicals are being shipped, it’s up to the manufacturer to ensure its documentation, labeling and packaging all meet government standards.

Among the most common items on a hazardous materials manufacturer’s shipping checklist are ensuring all of the following items are current:

Hazardous Materials Manufacturer’s Shipping checklist

  • Contents meet the federal definition of “Hazardous Material”
  • Employees are properly trained
  • Correct packaging is used
  • Blocking and bracing requirements are outlined
  • Shipping manifest is complete and accurate
  • Emergency response information is included
  • Emergency response contact information
  • Certifications are complete
  • Security plans and processes are in place
  • Incident reporting procedures are being used
  • Product Compatibility is accounted for when shipping multiple chemicals together

Among the correct documentation requirements are:

  • Shipping name
  • Classification/ Division
  • Identification Number
  • Hazard warning labels and markings

Freight carriers have their responsibilities, too. Those include validating the:

  • Accuracy of the manufacturer’s packing lists
  • Products are accurately described and adequately packaged
  • Vehicle is suitable for shipping the chemical products and in good repair

Carriers,as well, have additional responsibilities when transporting hazardous materials. These include:

  • Documents and manifests are accurate and complete
  • Proper labels and placards are in all required positions on the vehicle and the shipment
  • Loading and unloading meets safety guidelines
  • Employee training is complete
  • Security plans and processes are up to date
  • Incident reporting procedures are up to date
  • Adequate blocking and bracing meets government guidelines
  • Product compatibility is considered when shipping multiple chemicals together

The Real Cost of Freight

The actual cost of freight can only be realized after a product reaches its final destination. The final cost of deliveries can be influenced by a number of different fees for layovers, oversized cargo, after-hour deliveries, mispacked orders, incomplete manifests and damage incurred during shipping and unloading.

Large businesses making hundreds of shipments a day are often able to absorb shipping cost fluctuations that might severely hurt small and medium businesses. Unfortunately, manufacturers shipping products don’t always know what will trigger additional fees. These issues with inbound shipments can affect all departments in a supply chain: Sales, Planning, Purchasing, Production, and Accounting, and possibly more.

Understanding your transportation process inside and out is the most effective solution to address supply chain challenges in the chemical industry. Staying on top of every process, every step of the way lets you track and monitor the movement and condition of products from start to finish. Lack of visibility into shipping is the most challenging thing to correct and can significantly impact both manufacturers and shipping companies.

55%

of Third Party Logistics suppliers (3PLs) said they either lost business or didn’t know if they lost business due to lack of visibility of their offerings.

Source: American Shipper

Outdated Systems

Even today, a surprisingly large number of companies continue to run their operations on antiquated inventory tracking systems, fundamentally designed for managing local-only supply chains. Successful supply chains operate globally, dynamically connecting production and procurement to sales and customer service. This way, everyone knows what’s in transit and when it’s due to arrive.

Maintaining freight visibility, especially for a company spread thin, is not an easy task. Obsolete, “legacy” systems make it an even more challenging objective.

A modern, cloud-based solution provides a complete end-to-end view of a supply chain network.

Switching operations to an integrated, multifunctional transportation management system (TMS) platform brings agility to your transportation network. This kind of switch offers better support for seamless communication, allowing companies to respond proactively to unexpected issues and customer demands.

Disparate Systems

There needs to be effective coordination and collaboration across multiple sites and warehouses to effectively manage a supply chain. Running a business on many different applications is one of the biggest roadblocks to total freight visibility. If your organization’s systems can’t connect with your vendors’, there’s a good chance you’re missing something.

Having an inventory control system that communicates with your suppliers’ improves inventory management, communication and freight visibility. Connecting a Transportation Management System (TMS) with warehouse operations allows shippers to find detailed insights from inbound and outbound logistics within a single unified platform.

Lack of collaboration

Tracking shipments in real-time is the core of transportation management. When loads are distributed across different carriers, it can be a real challenge to get reliable data from the entire carrier network. Trying to track shipping information manually though, leads to inaccurate quotes and customer complaints.

Combining business intelligence and advanced analytics offers real-time visibility into shipping and location data. The data delivers accurate tracking information directly from the supplier’s carrier to the shipper. Your customer will always know when their products are due to arrive.

Finding the Right Solution

Most logistics solutions are unable to display “right now” data on incoming shipments and outgoing orders. If you’re in the process of figuring out what solution will be best for your business,there are a few questions you’ll want to be sure you ask:

  • Does their system have AI-enabled software that automatically records vehicle movement, be it truck, ship or plane?
  • Can their system generate automated email alerts in real-time?
  • Does their solution connect the vehicle and the driver, letting you know when unexpected hurdles or opportunities occur?
  • Is their system integrated with other essential business systems your company uses?
  • Are they using software as a service technology providing your company access to your data any time, any where?
  • Are upgrades done automatically through cloud computing, eliminating the need for on-premise upgrades?
  • Is their software a complete package or just a part of the delivery ecosystem?
  • Can their system communicate data easily with other TMS systems, electronic logging devices or enterprise resource planning systems?

Final Thoughts

With the anticipation of continued, long-term shipping challenges, more chemical manufacturers see the need to take a close look at their supply chain management software. Knowing exactly where incoming shipments of raw materials and pre-assemblies are and when they’ll arrive, along with the ability to track products from your facility to your customer’s door, every step of the way, is becoming more and more critical to customer retention.

Best-in-class organizations are embracing newer technology to help them spot and correct problem points before they become a roadblock. The end goal is to reduce expenses by focusing on lowering total shipping costs.

Reach out to us to learn more about Microsoft Business Applications that can help enhance freight visibility.

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

How To Enhance Your Chemical Supply Chain

How To Enhance Your Chemical Supply Chain

How To Enhance Your Chemical Supply Chain 1440 810 Xcelpros Team

At a Glance

  • Today’s chemical industry is all about enhanced visibility and accountability.
  • Dealing with varying laws and regulations for different regions, fluctuating and lack of visibility across the board requires advanced solutions.
  • Integrating advanced technologies can reduce waste, unearth new products, find new markets and enhance a company’s status.

Change in Operations

Chemical companies, especially those in the pharmaceutical industry, are seeing an increase in the need for global reach. The still ongoing Covid-19 pandemic means the demand for medications to prevent and treat this deadly disease continues to increase and evolve as new variants are identified.

Since its first discovery, the effect Covid-19 has had on supply chains has been severe, regardless of product. As with many problems though, this disease has also created numerous opportunities, especially for the chemical industry. Major companies continue to expand operations, delivering their products all over the world including former “third world” countries with a growing thirst for everything from antiviral medications and cleaning products, to beauty supplies.

“The chemical industry touches nearly every good-producing sector, making an estimated $5.7 trillion contribution to world Gross Domestic Product (GDP) through direct, indirect and induced impacts, equivalent to seven percent of the world’s GDP, and supporting 120 million jobs worldwide.” Source: The Global Chemical Industry

This data from the ICCA shows a considerable market share, making it safe to say that the chemical industry is looking at a secure future. Globalization, however, requires dealing with unique challenges and roadblocks, especially when it comes to the movement of chemicals from supplier to producer and then to consumer. Today’s supply chain management won’t work in silos. That idea is no longer sustainable or feasible. Today’s global marketplace requires expanded thinking, and that means going digital.

Planning a chemical supply chain today means using effective, profitable methods where customers, suppliers, parts vendors, shippers, sales and production facilities are connected, regardless of their physical locations. Modern software like Microsoft Dynamics 365’s suite of modular programs can help chemical companies make use of modern digital methods and enhance the operational efficiency of their supply chain.

In this article, we will look at some of the key supply chain challenges in the chemical industry today and how technology is playing a key role in enabling forward-thinking companies prosper.

Top Challenges in Chemical Supply Chain

Every company has its own set of challenges such as the size of the company, locations of their manufacturing units and the structure of its supply chain. Regardless of an individual firm’s situation, there are common supply chain issues faced by all chemical manufacturing companies.

Typical chemical industry supply chain challenges include:

  • Distributing chemicals and related raw material in different countries. Companies struggle to keep up with the laws and regulations of varying regions. What’s safe and acceptable in one country may violate worker safety laws in another. This is especially true when it comes to hazardous chemicals.
  • Existing chemical supply chain management can fall prey to manual errors and miscommunications, causing potential safety hazards and monetary loss.
  • The bottom line often depends on a company’s ability to source raw materials. When prices for essential materials fluctuate, the entire supply chain can be affected.
  • Tracking material pricing and delivery details creates a lot of data. This includes information regarding the chemicals, their compositions, material pricing, safety precautions, distribution lists, and more. Managing this information is a top concern for chemical supply chain managers.

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Figure: 1 Supply Chain Challenges in Chemical Industry

Supply Chain Challenges in Chemical Industry

3 Ways Technology is Reshaping the Chemical Supply Chain

01.Technology Enables Creating a Connected System

Today’s world is much more connected than it used to be. Systems are linked with smart devices, modern sensors and powerful software running it all. With these sophisticated enterprise resource planning systems in place, it becomes much easier to organize your chemical company’s supply chain. Modern systems can generate an alert when a violation occurs. These automatic alerts reduce manual errors or oversights.

A connected ecosystem provides top-to-bottom visibility in the supply chain, giving top-level decision-makers a clear picture and greater transparency across the board. This enables better accountability and the ability to find solutions to common problems and bottlenecks.

Figure: 2 New Technologies in Supply Chain

New Technologies in Supply Chain

02.AI Helps Create a Failsafe Supply Chain

Chemical supply chain management is highly susceptible to changes in prices of raw materials. To stay ahead of the curve, companies need to stay up to date on global, as well as regional changes to predict how these changes will impact their supply chains.

Artificial intelligence(AI) enabled solutions can analyze data in real-time, letting decision makers know what is likely to happen, how it will affect them and most importantly, what they can do to avoid or reduce any impact. This software can help these companies make necessary modifications to their supply chain strategy on the fly.

03.Using Cloud Computing to Manage Supply Chain Data

Data collation, cataloging and analysis are intricate tasks. When performed by people, they can be prone to manual errors. However, with progressive technological tools like Microsoft Dynamics 365 Supply Chain Management, companies can store unlimited data and analyze it much more efficiently. This categorized and analyzed data can be leveraged to generate insights that helps fortify the company’s supply chain for smooth transitions and better efficiency.

Supply chains are the backbone of many industries. The chemical industry needs to adapt to changing times, and make use of the right technologies to harness maximum benefits.

Key Takeaways

Like any industry, the chemical industry is witnessing the need for change in its supply chain model. With the help of cutting-edge technological tools and applications, chemical supply chain management can be overhauled and optimized for enhanced efficiency. Is your supply chain ready for change?

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

How a Cloud-Based ERP Helps Chemical Manufacturers

How a cloud-based ERP helps in Chemical Manufacturing?

How a cloud-based ERP helps in Chemical Manufacturing? 1920 1080 Xcelpros Team

Introduction to Modern Manufacturing

We’re seeing a radical change in production methods overtaking the chemical industry. Technology is gaining more attention in almost every sector, including manufacturing and distribution. The introduction of this new technology is forcing business leaders to upgrade their stack and replace outdated processes to meet the changing demands of the market. Today’s market requires a rapid transformation of the chemical manufacturing value chain to improve customer service, efficiency, productivity, quality, precision and pricing.

Complexity serves no purpose for business, yet it’s been part of the chemical industry for decades. Many companies still suffer from siloed department structures, disparate systems, inefficient data management and a lack of streamlined processes. Each of these complexities creates roadblocks that can affect a business’s bottom line. Most companies don’t realize how their complex independent system affects them until the lack of integration between the floor and functional areas becomes an issue. The lack of system integrations can lead to lost orders, or lower quality products because of suboptimal production runs or poor capacity planning.

Many of these companies are suffering these effects for one reason: lack of an agile enterprise resource planning (ERP) solution. Chemical manufacturing companies must take action by redefining their business models and re-evaluating their IT roadmaps. The most successful chemical companies invest in transformation projects such as integrating a cloud-based ERP solution with operations to streamline processes, drive collaboration and efficiency and offer informed decision-making.

Figure 1Agile ERP Solutions in Various Phases of Chemical Manufacturing

Agile ERP Solutions in Various Phases of Chemical Manufacturing

Unforeseen Circumstances: COVID-19

The COVID-19 pandemic is still having an effect on every industry. Production and shipping departments are still facing challenges nearly two years after Covid-19 first appeared. Hundreds of companies have been forced to scale down their manufacturing operations by as much as 40%-60% in part because shipping containers are not where they’re needed. A lack of adequate containers, coupled with the loss of port workers and truck drivers means fewer raw materials are arriving at production plants. By February 2021, the global production of chemicals fell by 2.4%.

The inability to make products is still severely impacting the revenue of chemical companies. Rising transportation costs along with a lack of raw materials means priority has shifted to essential functions. This financial pressure is forcing companies to downsize their workforce while continuing operations. The result is added pressure on leadership to implement a rapid technology transformation.

An Agile Manufacturing ERP

Unlike other sectors, chemical industry businesses can’t simply stop production and send workers home, though some are pivoting operations to meet the demand of the market.

The chemical industry is facing a unique set of challenges including:

  • Fluctuating raw materials prices and their impact on margins
  • The need for constant product innovation
  • Increasing risks in supply chain and manufacturing
  • Tightening regulations
  • Market uncertainty, budget and controlling costs
  • Difficulty in resource management

To overcome these complexities, companies need to possess a detailed overview of the market. Having accurate information lets them identify shifting customer dynamics and plan their production runs appropriately. Cloud-based ERP systems for manufacturing can help identify market needs, shape the manufacturing processes, and inform a chemical company’s financial business processes.

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6 Ways Implementing an ERP Improves Chemical Manufacturing Operations

01.Improved Visibility

An agile ERP unifies data across departments, increasing the visibility of information. Organizations can share information, eliminating unnecessary infrastructure costs while providing higher data security. In a chemical company, process automation add-ons to a cloud ERP can ease resource overload by optimizing workforce utilization on the shop floor. All departments across the company—including inventory management, purchasing, accounting, human resource management, production and finance—function together with a minimum breakdown and maximum operational clarity. Versatile cloud-based ERP systems for manufacturing help companies access real-time data on a uniform platform, boosting throughput and reducing downtime.

02.Enhanced Flexibility

As market conditions fluctuate, the manufacturing supply chain needs to be highly adaptable. Using the right ERP solutions provides this needed flexibility. For example, a chemical company can share important updates plus revised manufacturing plans and schedules using an ERP’s supply chain planning system to plan stock availability.

An effective agile ERP system for chemical manufacturing should follow a tiered approach that includes:

  • A Secure database
  • A Simple user interface with easy access to key functions
  • Easy integration with external tools

Along with basic business requirements, the chemical industry needs to accommodate health and safety regulations aimed at protecting workers and the environment. Cloud-based ERPs give these companies the flexibility to customize solutions to suit their needs without moving data or altering the entire piece of software.

03.Better Collaboration and Transparency

Having the right computer software designed for your industry leads to better collaboration across a company. Complex business procedures are simplified, making them understandable to more people. These procedures can then be modified to meet changing government regulations. All modern systems have enough access controls to enable a disciplined method of functionality. A process and rule-based system improves transparency, helping organizations operate more efficiently.

04.Better Supply Chain Efficiency

Companies investing in newer, more robust and flexible ERP systems find that managing their supply chain becomes easier. They have access to more accurate, real-time data letting them plan shipments based on accurate demand forecasts. Data insights collected from an ERP system designed for chemical manufacturing can reduce inventory costs, enhance supply chain efficiency and optimize production processes. These improvements help build a robust, efficient supply chain, with the added benefit of reduced raw materials spending, increasing profit and capital growth.

05.Improved Production

Chemical companies often pay a hefty price when the system they use lacks functionality. The typical end-to-end chemical production process contains many steps with data moving between multiple hands and devices. Every time your data moves from one silo to another, it increases the chance of errors. A poorly designed manufacturing execution system can drain resources and add unplanned costs to the company. An agile, cloud-based ERP system for chemical manufacturing eliminates many of these unplanned costs.

06.Enhanced Customer Service

With the right ERP and customer relationship management (CRM) solutions in place, companies can more easily meet customer-centric objectives, including understanding the customers’ needs, improving service levels and enhancing their experiences. An agile ERP that helps companies meet the needs of their customers makes a huge difference in customer retention.

Final Thoughts

Every day, chemical manufacturing companies face challenges. What matters the most is how these challenges are handled. Whether you produce specialty chemicals, bulk chemicals, private-label, co-pack or you’re a contract manufacturer, having the right cloud-based ERP systems for manufacturing helps to build operational efficiency. Having software helps you bring products to market faster and reduce your operational costs while adding flexibility and responsiveness to any future market changes.

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

How to Choose the Right ERP Platform

How to Choose the Right ERP System for your Business Growth

How to Choose the Right ERP System for your Business Growth 2400 900 Xcelpros Team

Introduction

Imagine your company’s software vendor has just announced it’s no longer supporting a program your staff uses, one that over the years has helped you grow your business. Processes continue to get more complicated with data continuing to expand at astronomical rates leaving older systems behind. Your company is left with no choice: It’s time to pick a new enterprise resource planning (ERP) system for your organization.

There are two major questions that need to be answered: Which solution best suits your company right now? Is there a different solution that will help your pharmaceutical or chemical company grow from a small or medium business (SMB) to a level able to challenge the industry giants?

Choosing the Right ERP System

Before your company can evaluate products on the market, you need to understand what will work best for you. ERP News suggests that if you do nothing else, it’s important to understand the needs of your business.

Before starting the ERP selection process, it is a good idea to analyze the business processes correctly and reveal the areas that you find incomplete or that need to be improved. Source: ERP News

Figue: 1 ERP selection process

ERP selection process

There are 10 critical steps to selecting the right ERP software package:

1.Ensuring it fits your company’s business needs. It’s important to understand what the needs of your organization are now, and in the future; short, medium and long term.

2.Planning an effective budget. You want to get the most effective business ERP system for your organization. What’s the total cost of ownership? What kind of return on investment (ROI) can you expect? Which is most likely to help your company profit and grow?

3.Verifying flexibility and scalability. Just because a package is a top-rated ERP solution today doesn’t mean it can keep up as your needs grow or as market conditions change.

4.Ensuring it can adapt to new technologies. Can your solution of choice support internet of things (IoT) data? Is it compatible with cloud computing? Does it allow work from any location? Is it usable with tablets, laptops and even mobile phones?

5.Is it compatible with your existing business software? Can the new system communicate with your legacy software and devices? Will your users be able to easily access old data alongside new orders and processes?

6.What do similar-sized competitors use? Is there a standard ERP used in your industry? What do your clients, suppliers and business partners use? What do they like and what would they change if given the chance to start from scratch?

7.Research your implementation partner. How much experience do they have in your industry? How flexible is the software and how capable is your partner? Can your implementation partner customize the software to meet your specific, demanding needs?

8.Will it grow with your business? Can the enterprise resource planning application expand, not only in terms of users but into other areas you don’t need today, but might in the future?

9.Does this project have support from upper management? If not, going through all of the other steps is an exercise in futility. Effective research will make it impossible for top management to say no.

10.Does it have a familiar look and feel? Don’t underestimate the effect changing ERP systems will have on your worker. If you don’t have user support, making it work will be tough. One way to achieve that goal is by using software similar to other programs they already use.

One last question to continuously ask along the way might be “What do we have that works well right now? What do we need to function better?”

Top ERP Systems in the US

All of the software giants have ERP systems. Depending on who you read, different companies will be on top. The dominant players are well-known software companies: Microsoft, Oracle, SAP, Salesforce and others. In no particular order, the most frequently mentioned top ERP systems are:

  • Epicor ERP
  • IFS
  • Infor
  • Microsoft Dynamics 365
  • Oracle JD Edwards
  • Oracle NetSuite
  • Sage X3
  • Salesforce CRM
  • SAP Business One
  • SAP ERP
  • Syspro
  • Workday Financial Management

Researching offerings from each one of these major companies will take time and manpower. At this point, you’ve moved on to the next stage: evaluation.

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Evaluating ERP Software

According to SelectHub, choosing the right ERP system includes evaluating criteria based on your company’s needs. Typically, evaluation criteria includes:

  • Customer Relationship Management / Account Management
  • Accounts Payable Reporting
  • Bank Reconciliation
  • Benefits Administration
  • Capacity Requirements Planning
  • Material Requirement Planning
  • Bill/Build of Materials
  • Logistics Management
  • Inventory Management
  • Module Integration
  • Installation Type
  • Network Flexibility
  • Employee Training

Companies in the pharmaceutical and chemical industries should add:

  • U.S. Regulatory Compliance
  • International Regulatory Compliance

Not included in this list is one other critical criteria that can help determine if your company would be vulnerable to attacks: data security.

Where to Start

A great place to start your search for a flexible, versatile, secure and ultimately valuable ERP software package solution is by connecting with an experienced consulting service with a thorough understanding of highly-regulated industries. This should include upgrades and migration, which are commonly ignored.

There are many partners that can suggest a modern upgrade path including an in-depth migration assessment that is risk-free and cost-effective. Whoever you team with, you’ll want to make certain they have extensive experience in your industry with respect to project planning, risk management and strategy.

Our Recommendation: Microsoft Dynamics 365

Microsoft Dynamics 365 ERP solutions are easily expandable, extremely secure, and backed by Microsoft’s Azure platform. Microsoft Dynamics 365 (D365) modules include Finance, Supply Chain Management, Business Central and other related—and integrated—products. D365 can be customized and enhanced with other functionality, including products specifically designed for chemical and pharmaceutical companies. Integrated Chemical Management is a perfect example as one of Microsoft’s preferred solutions for these industries.

As a Microsoft product, Dynamics 365 has an advantage over every other competing product: a familiar look and feel. Office 365 and its many predecessors are used by millions of people worldwide. This familiarity helps your staff learn new software without having to learn an entirely new method of working.

Final Thoughts

For every business, selecting the right ERP system starts with an honest evaluation of your company and its needs. Determining where you are and where you want to go are the first steps towards ensuring your investment ultimately turns a profit and helps your organization grow.

It’s a big job, selecting the right partner along with the right software package. Thorough research and proper planning will be key to a smooth transition, but the result will be a much better implementation of a much better product. Are you ready to get started?

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

handling hazardous chemicals

The role of an ERP System in Handling Hazardous Chemicals

The role of an ERP System in Handling Hazardous Chemicals 1920 1080 Xcelpros Team

At a Glance

  • The chemical manufacturing industry is constantly scrutinized for its impact on the environment. Organizations in this industry are required to maintain numerous documents including safety data sheets and hazard labels with pictograms.
  • Hazardous chemicals produced and used by the industry must be properly tracked and managed in compliance with the Environmental Protection Agency (EPA), Occupational Health and Safety Administration (OSHA) and others.
  • The right ERP systems can help companies keep accurate records of these hazardous chemicals, in order to meet changing requirements.

Chemical Manufacturers – Managing Compliance

The chemical manufacturing industry is required by law to responsibly use, transport and dispose of hazardous chemicals.

According to a 2016 Harvard University report, “There are currently more than 85,000 chemicals in the US that make up the products in our daily lives and few, besides medications and pesticides, have been assessed thoroughly for safety.”

While prescription drugs and pesticides are carefully examined for their effects on humans and the environment, few other chemicals were not. That changed in 2016 with the Frank R. Lautenberg Chemical Safety for the 21st Century Act. The Act gives the EPA, “the authority to ban new and existing chemicals that pose a risk to human health and the health of the environment.”

Manufacturers are an integral part of the chemical value chain. The overall supply chain— from raw materials to finished products—now requires hazard visibility that was lacking until recently.

How can manufacturers meet these compliance standards and document what happens to hazardous chemicals?

One way is through the use of an enterprise resource planning (ERP) software system that makes record maintenance, compliance and visibility easy to maintain. A reliable ERP system is no longer an option but a requirement for chemical companies wanting to act proactively and avoid environmental or human mishaps.

Adding Xcelpros’ Integrated Chemical Management solution to the One Microsoft Ecosystem provides a comprehensive way of ensuring compliance. ERP components cover Supply Chain, Finance, Manufacturing, Quality, Document Management and Chemical Data and Documents.

Being proactive

Business processes would be simpler for bulk chemical and toll manufacturers if they could regulate hazardous substances using inventory receipts from a purchase order or production order system. Dangerous chemicals can be monitored more closely, though, when using an integrated chemical management system that tracks each chemical in every stage from raw material to finished product and wastes.

Unified systems like ERPs can help identify hazardous substances and evaluate them. Manufacturers are then informed of the risk levels regarding the use and distribution of their chemical products.

Identifying these hazardous substances early also allows manufacturers to act proactively, resulting in better safety.

Book your free consultation to learn how an ERP system can help handle hazardous chemicals.

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Developing a Prototype/ Standard Operating Procedure for Worker Safety

Even after manufacturers implement hazardous chemical safety procedures, theres still room for error. Mishandling and mismanaging these chemicals can jeopardize workers’ safety. Since working with these chemicals is a part of the job, production and distribution becomes a serious business challenge. Documenting safe handling steps and ensuring dangerous products meet all current regulations helps protect the companies when accidents occur.

Microsoft Dynamics 365 and its suite of business tools integrates into SharePoint and OneDrive. SharePoint is a document collaboration system. OneDrive is more storage oriented. Combined with Dynamics 365, they provide the ability to develop a standard operating procedure or prototype process to handle chemicals. The result is a series of documents that help avoid chemical accidents and enhance worker safety on the shop floor.

Better Equipment Maintenance

Documenting equipment maintenance in a chemical plant is a tedious task. Microsoft Dynamics 365 boosted with Internet of Things (IoT) sensors eliminates much of this drudgery. It lets workers know when to take preventive actions. These maintenance “calls-to-action” are generated automatically by D365 systems. By removing the potential of errors from manual entry, the automatic notifications also boost regulatory compliance. This integrated system also lets chemical manufacturers create a complete equipment maintenance, repair and operations plan.

Figure: 1How an ERP System Helps Manage Hazardous Chemicals

How an ERP System Helps Manage Hazardous Chemicals

Systematic Record Maintenance

Many chemicals used by manufacturing companies require detailed labels. These labels include their chemical composition, risk factors, expiration dates, safety procedures and special handling instructions. Government agencies require a consolidated record listing the chemicals, their quantities, distribution, costs, etc.

Manually tracking the massive volume of data in legacy systems leads to errors. Microsoft Dynamics 365 with Integrated Chemical Management is one way to properly maintain that chemical data. Information is made visible at the individual chemical or consolidated level. Chemical companies are assured of safely using, distributing and disposing of their hazardous chemicals through an automated workflow that makes it easy to add and edit chemical data.

Meeting Compliance Standards

The ERP systems described earlier apply to regulations at many levels, not just those from the federal government. They can include notifications of additional requirements based on the shipping destination. That location can be one community within a nation or a different country.

Chemical companies looking for an ideal ERP solution that helps meet local and international documentation requirements should take a close look at what D365 and ICM have to offer.

According to the 2017 Hazard Communication Survey:

  • 70% of participants pointed to compliance as the single largest priority for their company.
  • 80% of them cited monthly obligations to create, print, or affix workplace labels to containers in their inventory as a challenge.

Microsoft Dynamics 365 and ICM provide an embedded chemical management solution for storing chemical data. That data becomes a globally harmonized System of Classification and Labelling of Chemicals (GHS) compliant labels and Safety data sheets. Using D365 and ICM is an ideal way to reduce GHS-related compliance issues.

Summary

An advanced ERP system like Microsoft’s D365 can easily become the backbone of an organization’s hazardous chemical record keeping. This sophisticated software system helps the company function and grow while also keeping the environment and communities safe. Microsoft’s Chemical Manufacturers Supply Chain solution provides a cutting-edge system to ease record maintenance, streamline the overall chemical supply chain, track inventory and warehouse management processes and create a platform for productivity and growth.

Key Takeaways

  • Integrating chemical data into an ERP system is necessary for chemical manufacturers to comply with rules and regulations from many sources.
  • Microsoft’s integrated ERP software working with ICM provides a smooth flow of records. It tracks hazardous chemicals, prints GHS labels and generates safety data sheets.
  • Chemical manufacturers concerned about worker safety, protecting the environment and avoiding government penalties will only benefit from the right ERP system.

Explore our Products page to learn about the different ERP Solutions available to jumpstart your evaluation process.

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Innovation is Helping Chemical Companies Grow Into Giants

Innovation is Helping Chemical Companies Grow Into Giants

Innovation is Helping Chemical Companies Grow Into Giants 2063 774 Xcelpros Team

Introduction

Innovation in business often means introducing something new. It’s common for companies to introduce new ways of looking at how they operate. They take a new and different view of their supply chain. They gather ideas from employees on ways to boost sales. Benefits of innovation include:

  • Boosting productivity
  • Reducing costs
  • Being more competitive
  • Boosting brand value
  • Establishing new partners and business relationships
  • Improving profitability

There are many ways to help companies grow. Using newer digital technology is one method.

Companies that fail to innovate, preferring to use methods that were successful 10 or 20 years ago, can quickly fall behind those seeking to enhance their business. Companies that fail to innovate can expect to:

  • Lose market share
  • Reduce productivity
  • Become less efficient
  • See key staff members leave
  • Watch as margins and profits shrink

From a marketing perspective, the expression “building a better mousetrap” applies to them. This failure to innovate is not a good idea when your customers want medicines that will help them live longer, healthier, happier lives.

By the Numbers

Capital spending in the chemical industry is expected to increase in 2021 and 2022 after a sharp drop in 2020.

  • -17.6%: 2020 chemical industry capital spending
  • +11.9%: 2021 chemical industry spending is expected to reach $30.6 billion this year
  • +3.7%: 2022’s estimated increased in chemical industry capital spending

Is your company willing to invest in its growth?

Figure: 1Chemical Industry Growth Projection

Chemical Industry Growth Projection

Using Technology for Growth

Combining big data with artificial intelligence, such as that built into Microsoft Dynamics 365, helps turn digital innovation in the chemical industry into growth.

Growth happens faster when a company has data from reliable automatic sensors, not manually prepared spreadsheets. After analyzing the data for specific information, company leaders can create and adapt growth strategies.

A 2018 Connected Small Businesses in the United States report by Deloitte found, “relative to businesses that have low levels of digital engagement, digitally advanced small businesses realized significant benefits.” These benefits include:

  • Generating twice as much revenue per employee
  • Up to four times growth over previous year revenue
  • Being nearly three times as likely to create new jobs over the previous year with an employment growth rate more than six times as high
  • Being three times more like to have exported products in the past year

“Despite these potential gains, 80 percent of US small businesses aren’t taking full advantage of digital tools such as data analytics and more sophisticated online tools,” Deloitte stated.

Innovation is a Process

Another term for innovation is change. Effective change—effective innovation—requires planning. Look at the marketplace: What are the giant companies in your market doing? How did they grow? What innovations did they take?

Look within your company and identify opportunities for innovation. Consider using the Industrial Internet of Things (IIoT) to connect laboratory and production devices.

Analyze the competition and then compare what the top companies are doing to how yours operates. What are some of the market trends—using enterprise resource planning (ERP) software is one—that can help your company get ahead of the competition?

Evaluate the business climate. In the chemical industry, this means studying regulations such as those from the U.S. Food and Drug Administration (FDA).

Look at your customers and end consumers. Talk to them. Ask them what kinds of products they want. What does your research forecast will be in demand in five years? In ten years? Is your company positioned to supply those innovative medicines now? Will it be able to meet expected demands when they occur?

Note: See this infographic for a brief look at Organizational Change Management as it applies to upgrading to a modern ERP.

Digital tools are key elements in the new technologies fueling chemical industry growth.

Get a free consultation to know how innovation can help your chemical company grow.

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Digital Tools for Innovation

Five key tools are sparking digital innovation in the chemical industry:

  1. 1.The Industrial Internet of Things (IIoT)
  2. 2.Big Data Analytics
  3. 3.Mobile Solutions
  4. 4.Cloud Storage
  5. 5.Cybersecurity

Sensors that observe, record and transmit data in real time are available. Using them lets chemical industry leaders understand how their machines and staff are performing. When those sensors are connected to the internal network and then to the Internet, that data becomes available to anyone, anywhere at any time. For example, a production run in China can be monitored by workers in Chicago.

IIoT sensors create a lot of data leading to the term “big data.” Having a lot of numbers showing production runs and quality levels does not help a chemical or pharmaceutical company grow. Analyzing the data to find nuggets of useful information shows where improvements can occur. Having computer software that examines the data and tells executives what it means can help them spot trends that, when corrected, lead to more efficient operations.

Accessing that data and those trends is one thing when it happens in an office. Getting an alert on the production shop floor, though, can save an expensive batch of product. For example, being notified that an ingredient is running low or a machine will overheat can let workers using mobile devices fix these issues. They can resolve these issues before they become expensive problems.

Even though production floor employees are monitoring machines, their IIoT sensors are still producing large quantities of data. The sheer data volume may easily overwhelm a local computer network. Having a cloud computing connection eliminates that storage issue.

Using banks of interconnected servers, cloud service providers store data securely. Cloud service providers can transfer data from one warehouse-sized server farm to another storage location. They have the highly-trained staff and equipment needed to protect your data from hackers.

One security method not used by many small and medium businesses is Microsoft’s Azure industrial platform. It has its own in-depth methods of keeping your secrets safe from the competition.

Using these technological innovations effectively requires a platform and a team who understands what they want: an ERP installed by an experienced company.

Use a Systems Integrator with industry and transformation experience

A Microsoft Direct Cloud Solutions Provider (CSP), Systems Integrator (SI) and Microsoft Certified Partner for Microsoft System Dynamics. Dynamics 365 with ERP implementation skills, and an ERP that integrates, is scalable and provides accurate insights, together can move a company in the right direction.

Using Microsoft Dynamics 365 products such as Finance and Supply Chain or Business Central, The right technology can help turn SMBs into giants. Or an industry solution, in particular, is aimed at the chemical industry such as Integrated Chemical Management. ICM and other scalable Microsoft products let firms take advantage of digital products.

Having the right subject matter experts who are adept at helping companies transition from legacy ERPs and silo-based systems also makes the transformation simpler. At the end of the day a modern digital platform helps move your workforce into a productive and efficient environment.

Summary

Small companies wanting to grow into giants should waste no time taking advantage of modern technology. Recent innovations such as IIoT, AI, cloud computing and updated ERPs let forward-thinking companies move seamlessly into the future. These organizations are able to move ahead while competitors using siloed systems are left in the dust.

Xcelpros specializes in deploying these on-premise, cloud and mobility solutions. For more information contact us!

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Overview of Chemical Distribution in Microsoft Dynamics 365

An Overview of Chemical Distribution in Microsoft Dynamics 365

An Overview of Chemical Distribution in Microsoft Dynamics 365 1400 820 Xcelpros Team

At a Glance

Chemical distribution companies have several requirements when facing challenges in today’s business world. They include:

  • Needing an overview of end-to-end supply chain processes including solutions to increase operational efficiencies
  • Getting an overview of planning and inventory management for bulk chemicals and packaged chemicals
  • Understanding best practice depictions of typical chemical distribution processes

By the Numbers

Chemical distribution companies today are focusing their efforts on optimizing supply chains, warehouse and floor operations. They function as a supply chain partner, anticipating customer needs and helping them stay ahead of their competition.

  • The chemical distribution industry is on a massive growth curve. Grand View Research states the industry’s value was $247.1 billion in 2020.
  • The expected compound annual growth rate from 2020 -2028 is 4.0 percent.
  • There’s a growing need to set your processes straight and streamline your supply chain with sufficient controls in place to keep up with the pace of the market.

4 Key Processes

There are 4 key processes that matter to a chemical distribution company:

  1. 1.Order-to-Cash: The ability to take a customer order efficiently and deliver it by the customer’s deadline.
  2. 2.Procure-to-Pay: The ability to manage purchase orders and receiving departments efficiently, optimizing spending on procurement to avoid high capital inventory spending.
  3. 3.Inventory Management: Inventory Management: Maintaining optimal inventory levels without excessive capital spending.
  4. 4.Break Bulk Operations: Break Bulk Operations: Breaking down bulk shipments such as tankers and large shipments of individual products into smaller pack sizes.

User Story: Warehouse Chaos

Survival in a highly competitive world requires chemical distribution companies to efficiently organize and design their warehouses. Internal routes must be optimized to let manned and robotic pickers grab inventory for break bulking, repacking or outbound shipments. Inventory storage needs to be precisely planned, especially while handling hazardous chemicals.

Too familiar is the chemical customer with multiple warehouses. They store bulk and packaged chemicals stocked in rows, racks and bins spread across multiple aisles. Some of these chemicals require temperature controls. Many have hazardous condition restrictions.

It’s common for companies to focus on meeting the basics and storing things wherever they fit. No warehouses are organized, making it difficult to track where incoming product was stored and gathering items to fill customer orders.

Making matters worse are poor operational practices. For example a high volume order involved taking some contents from a 55 gallon bulk chemical drum. Operators move the drum to Staging, remove what order the order required and then leave the drum at staging. No effort is made to record the location or remaining quantity. At best, inventory numbers are manually written on a tag attached to the drum, not entered into the computer system.

This method creates many inefficiencies later in the production process. They include:

  1. 1. Inefficient use of space. The Staging area was already small. It was made worse by leaving drums and totes for break-bulk orders, causing Staging to grow continually.
  2. 2. Inefficient use of time. The system showed the drums were at their primary inventory location. Operators unable to find items there had to manually check each tag. Some operators eventually knew to look for inventory in the primary or staging locations. Other workers wasted time looking for the items.
  3. 3. No inventory tracking method.
  4. 4. Inaccurate inventory counts. Inventories were constantly adjusted for missing or untraceable inventory. Lack of accurate counts meant ordering more supplies to fulfill customer demands.
  5. 5. Over ordering meant not having enough space to store the extra bulk material.

The chaos caused by not returning bulk items to their designated location can make conducting a physical count a Herculean task. With missing inventory placed at unplanned staging locations, it added to the warehouse imbalances.

An Ideal Journey

Organizing any operation-chemical manufacturing or distribution—starts with analyzing its operations, growth initiatives and business goals for the next five years.

Ways to make warehouses more efficient include:

  • Review existing warehouse storage and design in terms of locations and inventory groupings.
  • Using federal, state and local safety guidelines based on chemical properties, create procedures stating where chemicals must be stored.
  • Number locations by aisle, row, rack and bins.
  • Place the fasting moving items close to the shipping area.
  • When receiving bulk containers, label them with a scannable barcode.
  • Label the put away locations and staging locations so checkers can quickly and easily count quantities in a specific location.
  • Provide workers with mobile devices that let them scan barcodes providing real time work details and order status updates.

Processes and Procedures in the Chemical Industry

Chemical manufacturing and distribution companies have many similarities in terms of receiving, inventory, planning, shipping and warehouse management.

The basic processes within the chemical distribution industry are centered more around warehouse management, inventory, planning, repacking, light manufacturing, shipping and receiving. Chemical manufacturing adds route operations, resources and work in progress (WIP) testing.

Inventory management processes in a chemical distribution company start with Purchasing and Receiving.

Purchased products are bulk or packaged chemicals, packaging items, labels and other supplies. These products normally come from an approved primary vendor or supplier.

Reporting and analytics shows two statistics that determine the effectiveness of the primary supplier:

  1. 1. The buyer’s decision to switch to an alternate vendor for a specific purchase.
  2. 2. The number of times this change occurs.

Vendor ratings showing the percentage of purchases delivered on time and in full is also important to buyers.

Figure: 1High-level Flow of Purchase Order-to-receive Process

High level flow of purchase to receive process

The next major process is inventory and warehouse management.

The most efficient warehouses are organized by aisle, row, rack, bin, lot or batch. They have pallet ID tags and box IDs. Materials managers seeking better organization find that using a license plate number for rows, racks, bins and pallets works best. Using scannable barcodes lets users with mobile devices easily retrieve inventory.

Using this method reduces lost inventory, incorrect counts and locations. It also makes tracking individual products faster and easier such as when repacking items.

Labeling all warehouse locations is also critical when streamlining operations. Two common methods are Serpentine and Standard. Most companies follow a four location naming standard with aisle, rack, row and bin.

Figure: 2Layout of a Typical Warehouse in a Chemical Distribution Company

Layout of a typical warehouse in a chemical distribution company

The third main process used by chemical distribution companies is capacity planning or master planning.

These companies should plan to break bulk and repack, changing labels at each stage. Master plans help track human resources, label printers, packaging machines and other devices.

Typical operations such as repackaging or breaking bulk require those stations and their operators. These functions cannot occur when either is unavailable.

Distribution companies seeing fast moving or express items require planning that is more agile. Agility requires operating on a net change mode instead of completely recreating set-ups every hour. Having that flexibility helps planners make key decisions and set priorities that optimize the work effort.

Figure: 3High-level view of Master Plan in Microsoft Dynamics 365

High level view of master plan in microsoft dynamics 365

The fourth major process is production and packaging.

Production in chemical distribution companies uses light manufacturing operations such as repacking. A bulk container is opened and quantities required to fill an order are removed.

Typical work orders include operations such as filling, packing, labor, quality and Labeling. The yield provides the quantities and costs to produce each container.

Labeling is the fifth major process.

Labeling is an additional operation on the shop-floor. Including an integrated label management solution included in normal workflows ensures merchandise is properly tracked.

Figure: 4High-level Repack Process in Chemical Distribution

High-level Repack Process in Chemical Distribution

The last two steps are order management followed by billing.

Once inventory is available, warehouse pickers should select the fastest route that lets them gather all items to fill that order. Items are then packaged, labeled and wrapped. Typically, they include certificates of analysis, safety data sheets, a packing slip and a bill of lading. Smaller orders often include a commercial shipping service tracking number.

As soon as everything is packed and shipped, the final step is sending the customer an accurate bill.

Figure: 5High-level Customer Sales Order to Shipment in Chemical Distribution

High level customer sales order to shipment in chemical distribution

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What a Distribution Company Looks Like in Microsoft Dynamics 365

Below is a quick view of what a chemical distribution company would look like in Microsoft Dynamics 365 assuming all required raw materials are available.

01.Products

This information is maintained within the Product Information Management (PIM) module. For a chemical distribution company, it is the heart of supply chain and manufacturing.

At a high level, Product falls into these categories:

Item Group Type Defination
Item – RM Raw Material Ingredient Purchased
Item – INT Intermediate Produced as Part of the Formulation
SKU Finished Product Containerized Finished Product through a Formula
Label Package – Raw Material Labelled Raw Material
KIT Finished Product Packaged into 1 case with same SKUS
BOX Package – Raw Material Package Purchased
Container (Tote, Drum, Etc.) Package – Raw Material Package Purchased
Package (Cases, Kits, Etc.) Package – Raw Material Package Purchased
Services Services  
Supplies Expensed Packaging Material, Lab Supplies, Office Supplies, Etc.  

In addition, companies should define products requiring tracking by batch, location and license plate. These items may also require coverage settings, lead times and other attributes such as chemical properties and label elements such as hazard statements, pictograms and hazard symbols.

02.On-Hand Inventory

Having a detailed view of inventory by batch, serial number, site, warehouse, location and license plate number for each product provides an inventory snapshot. The data applies to multiple roles such as planners, buyers, customer service representatives and materials managers.

D365 can also produce an inventory value report. It shows inventory quantity and total value plus the physical and financial cost by unit. Having a view into on-hand inventory value for both inventory and WIP can then be reconciled back to General Ledger.

In Dynamics 365, there are many different ways of slicing and dicing inventory. One screen is an on-hand listview displaying all available inventory based on dimensions. Selecting the dimension displays the site, warehouse, location, batch and serial number.

On-Hand Inventory step 1

On-Hand Inventory step 2

03.Sales Orders

D365 is versatile in terms of orders for chemical products, kits or cases. In Microsoft D365, customers can have products shipped to them or directly to their customer.

This process starts when customer service creates a sales order with the customer’s PO number. They add the products being shipped to the customer. The order can include specific customer instructions and notes. Notes and attachments can be set for printing on specific documents such as the packing slip or bill of lading.

For distribution, Microsoft Dynamics provides a Distributed Order Management (DOM) indicator. It provides a complete picture of inventory across the warehouse and ensures the order processes correctly.

Sales Orders Step 1

Sales Orders Step 2

Sales Orders Step 3

04.Master Planning

Depending on how the packaged items are set up for planning (e.g., min/max, requirement or period) with lead times and calendar setup, companies can run a master plan in a regeneration mode. This mode displays all supply, demand, planned supply and forecasted demand or net changes since the last full master resource planning run.

Typically, companies run master planning for all items or items under a certain coverage group such as fast moving items.

Master Planning

05.Production of Kits and Cases

Microsoft Dynamics 365 has extensive functionality supporting all chemical distribution company production operations. The operations can be streamlined for simplicity or conform to current methods.

For example, setting a production order in D365 can include finished goods produced, work planned, tracking operations, routes, resource cost and job scheduling.

Different views are set based on security roles and privileges. These allow different sets of users to view the production order, picklists, route cards or job cards.

Production of Kits and Cases step 1

Production of Kits and Cases step 2

Production of Kits and Cases step 3

Companies can also use Gantt charts to visually see planning and job scheduling. D365 has a powerful visual planning and scheduling tool that comes handy when scheduling tasks for all sales orders planned during a day, week or a month.

Production of Kits and Cases step 4

Bill Of Materials(BOM) journals are used in the production process to add finished goods into inventory and to reduce the inventory components within the formula or BOM.

These journals help reduce the process time instead of using a full production order.

A BOM journal cannot perform functions like tracking jobs and operations. It also is not part of visual planning.

Production of Kits and Cases step 5

Note: Xcelpros earlier blog post on “Operational Challenges in a Chemical Company: Key Solutions” explains production and operations in more detail.

06.Shipments

International shipments add export documentation not required for domestic deliveries. Both shipment types use a common document set generated by D365.

Using D365’s advanced warehouse management functions, outbound work and a shipment wave is created to pick products and put-aways for packaging.

D365 enhanced with the power of Integrated Chemical Management (iCM) prints a documentation package including:

  • Warehouse Work: Displays sales order number, work number, product batch or lot number, license plate information and put-away location in barcode formats. Work is processed using a barcode device.
  • Packing Slip: Displays the sales order number, customer PO number, delivery method, ship date, product to be delivered, quantity delivered, unit of measure, batch number or lot number delivered, ship to address, ship from address, back-order quantity and other related information.
  • Bill of Lading: Displays ship to address, sales order number, hazard information, pallet information, number of boxes, master bill of lading number and related materials.
  • Certificate of Analysis (C of A): Displays product, company logos for private label customers; test specifications; test results including visual, fraction, integer tests; approver information; expiration dates or best before dates; and test dates.
  • Safety Data Sheets (SDS): Displays product label information, pictograms, hazard statements, warning statements, transportation and U.S. Department of Transportation required information by country and language, CAS number information, etc.
  • Shipping Labels: Displays company logo, ship to address and product information.

Shipments step 1

Shipments step 2

07.Invoicing

After shipments are done, Microsoft Dynamics 365 gives companies the ability to create invoices in a batch mode or mass select shipments for invoicing. The system also lets them print or email a specific customer email address.

Invoicing step 1

Invoicing step 2

Invoicing step 3

Key Takeaways

Chemical distribution company executives should compare what their firm looks like now and how it might look after migrating to Dynamics 365.

D365 allows companies to streamline processes with a robust, simple, easy to understand and powerful system. Its ability to integrate with other Microsoft applications allows your company to fully integrate and enhance efficiencies.

Power tools such as master planning and production Gantt charts provide the ability to plan and schedule your production operations.

Microsoft Dynamics 365 helps boost your business efficiencies through the “one Microsoft ecosystem” by working seamlessly with products such as Office 365.

Microsoft Dynamics 365 can address most chemical distribution company requirements without modification.

The Differentiator - one Microsoft ecosystem

What does your company look like in Microsoft Dynamics 365? Talk to us to take a test drive.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Key Solutions to Chemical Company Operational Challenges

Operational Challenges in a Chemical Company: Key Solutions

Operational Challenges in a Chemical Company: Key Solutions 1200 450 Xcelpros Team

At a Glance

Recovery by end-use markets and export consumers are expected to boost the U.S. Chemical industry in 2021 and 2022. The American Chemistry Council (ACC) predictions include:

  • A global gross domestic product (GDP) increase of 6.1% in 2021 and 4.4% in 2022
  • A rise in the U.S. GDP of 6.4% in 2021 and 4.3% in 2022 after a 3.5% fall in 2020
  • U.S chemical volumes will increase by 1.4% in 2021 and 3.2% in 2022
  • Chemical shipments will increase 8.1% in 2021 and 8.2% in 2022 after a 13.5% decrease in 2020
  • Capital spending will increase 11.9% to $30.6 billion in 2021 and 3.1% in 2022 after falling 17.6% in 2020
  • Basic chemical production will rise 0.5% in 2021 and 3.4% in 2022
  • Specialty chemicals will expand by 3.8% in 2021 and 4.1% in 2022 after falling 10.8% in 2020
  • Chemical exports will rise 5.8% in 2021 and 13.2% in 2022 after falling 7.6% in 2020
  • U.S. Chemical imports will rise 1.7% in 2021 and 13.7% in 2022 after falling 5.1% in 2020

Also affecting U.S. chemical companies are tariffs and regulations.

  • U.S. tariffs on Chinese goods were averaging 19.3% on a trade-weighted basis in early 2021, up dramatically from the 3.8% rate before the U.S. China trade war, CNBC states
  • China currently has a 20.7% tariff on U.S. goods
  • Failure to meet global harmonized system (GHS) labelling requirements can generate fines of $12,600 per violation and up to $127,000 per violation for the most serious issues

Making Sense of the Numbers

Higher production translates to higher capacity requiring production managers to equip themselves with the technology needed to adapt to the changing market.

A sophisticated enterprise resource planning (ERP) business application helps plant production managers keep up with rapidly changing challenges. ERP software also lets them track key metrics such as inventory turnover and manufacturing throughput to optimize cost of production.

Production in modern-day chemical companies involves unforeseen challenges. These range from obtaining raw materials to ensuring proper quality, fluctuating demand, tariffs, dwindling margins, capacity and resource planning. It also requires keeping formulas secure from data thieves.

Regulatory compliance plus international tariffs add additional stress to profit margins and the supply chain.

Tariffs require leveraging resources more efficiently to achieve better margins while promoting trade. One effect is forcing companies to explore near-shore vendors that can supply essential materials at a reasonable price.

One way to become more efficient is by using modern technology. ERP solutions such as Microsoft Dynamics 365 (D365) Business Central have tools that let production managers take more control of their production floor.

For example, production scheduling is complex, requiring an understanding and balancing of specific elements such as:

  • Resources Planning
  • Continuous production
  • Optimal asset planning
  • Fluctuating demand
  • Tighter lead time
  • Procurement delays
  • Outages
  • Quality check
  • Recalls and regulation requirement

Five Key Concerns

Five key concerns for chemical production plant managers are:

  1. 1.Fluctuating product demands
  2. 2.Volatility in raw materials supplies
  3. 3.Complying with government regulations
  4. 4.Ensuring consistent quality
  5. 5.Resource and production throughput

Fluctuating Customer Demands

Capital spending will increase 11.9% to $30.6 billion in 2021 and rise another 3.1% in 2022 after falling 17.6% in 2020, American Chemistry Council states.

Basic chemical production will rise 0.5% in 2021 and 3.4% in 2022. Specialty chemicals will expand by 3.8% in 2021 and 4.1% in 2022 after falling 10.8% in 2020.

“Following the worst downturn since the 1930s, the world economy is on the rebound,” Kevin Swift, chief economist at ACC is quoted as saying. “We expect recovery to proceed apace despite multiple risks and uncertainties. These include supply chain constraints and increased demand as economies reopen; trade tensions; weather events, cybersecurity and similar shocks; inflation; financial volatility and public and private sector debt.”

While these developments position chemical companies in a bright spot compared to 2020, not all is bullish. As demand for chemical products increases, so does competition and the demand for innovative products. Production Managers now handle unprecedented customer demands causing tight deadlines and highly-stressed resources.

Production Managers need an air-tight strategy to meet sporadic demands and ensure business continuity. Products such as D365 Business Central are equipped to handle such strategies, ensure complete visibility, provide control over the entire supply chain and support informed decision-making.

Some of the critical elements in production planning and control include Master Planning, Production Scheduling and Production Control as shown below.

Production management

Today we live in an on-demand economy. Production managers face rapid changes and increased sales order quantities from customers, adding pressure on Production.

Example #1: A Chemical Plant

Using a chemical plant as an example, say Customer A doubles their order quantity from 5,000 to 10,000 pounds.

To meet this demand, the production manager must respond quickly by evaluating available resources and scale batch sizes in the reactor.

Companies using a modern, well-designed order management system can update the sales order quantity and set the order priority to high.

Order priority can be designed to consider critical demand, customer categories and customer relationships. Changing the order priority signals the materials requirement planning (MRP) system. It issues an updated production order to reflect the larger batch size.

After seeing the revised production order, the production supervisor can review the production schedule and adjust resources to meet the customer’s new demand.

Similar situations are common at chemical companies. Plant managers recognize the need for an integrated ERP system that seamlessly manages communication between different business areas.

Using Gantt Charts

The production control module within Microsoft Dynamics 365 Supply Chain Management creates powerful Gantt Charts. These charts visually represent production flows, map resources, check on material availability and inventories plus see which machines are available. This information helps managers control and optimize the production plan and make informed decisions.

Gantt charts within Dynamics 365 Finance provide a uniform view of schedule activities within a defined time interval. Managers can use these charts to:

  1. 1.Schedule jobs from production orders. Managers and schedulers can modify production plans by dragging and dropping or using an online menu.
  2. 2.Schedule jobs from planned production orders. Scheduling starts after the production plan converts to an actual order.
  3. 3.See hourly schedules of all jobs. A calendar that has active working times is a prerequisite for all production activities. Seeing the real-time status of every job lets managers know the status of “jobs that have started” and “jobs that have ended.”
  4. 4.View production orders organized by order and resources. Production managers get a real-time view of a production schedule displaying scheduled production orders, material availability and resource capacity. Managers can change schedules when required.

Order view

View of the resources available or engaged.–

Resource view

Volatility in raw materials supplies

Chemical manufacturers use crude oil and natural gas byproducts as the base for their products, accounting for about 50% of the production cost. Oil and gas are extremely volatile commodities with pricing subject to many macroeconomic factors beyond the chemical companies’ control. Volatility causes include geopolitical unrest, OPEC member nation policies, sanctions, currency fluctuation, etc.

Keeping track of raw material cost and availability—especially with the continuing pandemic—is another important production manager function. In the “old days,” managers used a series of Microsoft Excel spreadsheets to manually keep track of key metrics such as inventory turnover and manufacturing throughput. Modern ERPs track data real-time offering benefits to help minimize the effect of raw material price fluctuations:

  • Transparently tracking actual costs while accounting for cost of goods sold, revenue, margins, cash flow, etc.
  • Adjusting for currency fluctuations when dealing internationally. Managers can obtain materials from the lowest cost supplier.
  • Analyzing order volumes and budgeting for cost. Managers can get better pricing and plan production more efficiently.

Complying with government regulations

Any company working with hazardous chemicals is regulated at the federal and state levels. Many also face scrutiny from local officials.

Common requirements are labels meeting GHS standards. Software able to generate the right labels for each product coupled to label printers on the production floor are essential in meeting regulatory requirements.

In the US, companies dealing with hazardous chemicals including manufacturers, distributors, transporters and end-users must adhere to the Globally Harmonized System (GHS) label compliance requirements. Noncompliance can cost $12,600 per violation, while the more serious ones could range up to $127,000, not counting damage to a company’s reputation.

A labeling solution that includes chemical properties, characteristics, batch and lot number, test specifications and other required information is crucial.

Hazardous chemicals need to be distinctly identified to avoid disasters such as when reactive chemicals come in close contact. Labeling applications, such as Integrated Chemical Management (iCM) in D365, can address these issues in Production and elsewhere.

iCM not only provides labels meeting GHS standards, it also includes Safety Data Sheet authoring and management. It reduces human error when printing labels during a production run by knowing which product labels to print during the process.

Production order

Ensuring Consistent Quality

The effects of quality checks and recalls can have a long-lasting impact on a company’s reputation. Creating the required documentation for processes such as production, use of raw materials, packaging and others helps track each product from its source to its final destination. Accurate documentation improves visibility in the supply chain and enhances traceability in the event of an inquiry, recall or audit.

Chemicals are used as a base in multiple industries such as automotive, paints, food and beverage, appliance, electronics, packaging, textiles, cosmetics, toys, etc. The graph below shows recalls across major industries in 2016.

Production recall by Number of insurance claims 2016

A closer look reveals the reasons for such recalls. Top reasons for medical device recalls in the U.S. as of the second quarter, 2019 according to Statista were:

  • Software issues (49)
  • Mislabeling (32)
  • Quality Issues (31)
  • Sterility (18)

Common reasons for drug recalls according to WebMD are:

  • Health hazards
  • Mislabeling or poor packaging
  • Poor manufacturing quality
  • Packaging and product misalignment

Microsoft Dynamics 365 has the ability to track and trace products at a batch or lot level from the source to the end user. This function helps:

  • Ensure regulatory compliance
  • Track and trace batches and lots to identify damaged or contaminated products
  • Visualize the journey of the product from the manufacturing site to its end-users
  • Trace the root cause of an issue and treat it accordingly

Resource and Production Throughput

Managing the production shop floor requires diligent planning of human capital and other interdependent machine resources such as blenders, reactors, mixers, hot ovens, separators, packaging, tanks, etc.

Production planning and scheduling can get overwhelming depending on the number of resources and shifts. Production managers are constantly under pressure to increase production volume using less resources. Recurrent variation in batches to meet higher volume demand and continuous production often results in inconsistent batch quality.

Real-time data monitoring using measured and inferred values can increase production by as much as 4%. D365 uses measured and inferred values to track batch completion in real-time, reducing batch cycle time. It also is also used to achieve batch consistency. Using data collected over time to predict events that can disrupt the production cycle, production managers can reduce those delays, decreasing operating costs.

Being able to track and analyze real-time data also improves asset and resource effectiveness by up to 4%. Unscheduled downtime due to maintenance or breakdown isn’t new to manufacturing plants. Using predictive analytics, past asset performance can model scenarios that detect equipment health and prevent failures.

Key Takeaways

The US Chemical industry is still a volatile market, one that seems to be rebounding from the vagaries of Covid-19 one minute and then being hammered by political crises the next. Individual companies face growing competition to produce unique products, increase production, gain customer loyalty and comply with stringent regulations.

The life of a Production Manager in a chemical industry is stressful. Embracing modern technology will help them achieve company goals while also staying compliant with changing regulations.

Microsoft D365 offers easy-to-use visualization of data across all organizational departments including production, sales, compliance, marketing and others. It’s ability to seamlessly share data across multiple sites and locations enhances transparency and improves product and material tracking and tracing. The combined functions of each D365 application boost productivity and increase efficiency.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com