Chemical

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 not just for maintaining accurate product counts, ensuring on-time delivery or monitoring rising transportation costs, but also for keeping an eye on the Department of Transportation’s (DOT) requirements for transporting chemicals. The chemical industry being more highly-regulated, companies need to meet regulatory needs and address real-time issues. It will help in mitigating supply chain challenges in the chemical industry.

A Violation of Federal Hazardous Materials Regulations can cost your company a hefty sum between $79,976.00 and $500,000.

The consequences of failing quality controls and of initiating product recalls are too high to afford. With a rise in competition, increasing challenges related to transportation, and growing customer expectations amidst the Covid-19 pandemic, chemical manufacturers can’t afford to make any mistakes.

Managing freight can be an enormous task when you have to handle hundreds of shipments per day. When it comes to the chemical industry, the complexity multiplies as you need to ensure accurate product labeling for such a huge lot. Without clear visibility over the shipments expected daily, it’s impossible to plan the classification and storage of materials, and how much workforce is needed. Chemical companies need to ensure end-to-end supply chain visibility in order to run operations smoothly.

Consequences of Poor Freight Management

Poor freight management can result in a variety of problems for businesses and raise supply chain challenges in the chemical industry, including

  • Damaged, lost, or late deliveries
  • Customer complaints due to delays in processing
  • Delays in downstream work orders
  • Exceeded cost of freight due to carrier policies
  • Wasted raw materials and space due to unaccounted inventory
  • Decreased productivity due to poor scheduling

Unreported delays lead to an increase in inventory carrying costs, often as high as 30-40% of total inventory costs.

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.

The Key Solution

Starting with raw materials, moving through production and on to end-user delivery, each stage of a chemical product’s passage requires planning, tracking, and implementation. Companies need a centralized and secured solution that offers flexibility and the ability to integrate, automate, and be optimized across different locations. Solutions that provide enterprise labeling benefit companies by boosting efficiency, accuracy, and reliability and offer significant cost savings amid these highly regulated environments.

Managing Hazardous Freight – Responsibility of the Manufacturer and Carrier

A manufacturer shipping product has the primary responsibility for identifying hazardous materials, which can be an essential task. When shipping chemicals, the company needs to ensure that all details are captured accurately to avoid compliance failures. Below is an example of things that need to be completed when preparing chemicals to be shipped.

Hazardous Materials Manufacturer’s Shipping checklist

  • The material meets the definition of ‘Hazardous Material’
  • The employee training for the job
  • Documentation includes the proper shipping name
  • Documentation includes correct Classification/ Division
  • Documentation includes correct Identification Number
  • Documentation includes correct Hazard Warning Labels and Markings
  • Correct Packaging is used
  • Blocking and Bracing requirements are outlined
  • Shipping Manifest is complete and accurate
  • The emergency Response information is included
  • Emergency Response contact information is up to date
  • Certifications are complete and up to date
  • Security plans and processes are up to date
  • Incident reporting procedures are up to date
  • Product Compatibility is accounted for when shipping multiple chemicals together

On the flip side, the carrier is responsible for validating the products being shipped by the manufacturer. They need to check that the materials provided by the shipper are accurately described and adequately packaged. They also need to ensure the vehicle to be used suitable for the materials being shipped based on determined guidelines. As well, the vehicles themselves must be in sound mechanical condition. Below are some additional considerations and responsibilities that fall upon Carriers when it comes to transporting hazardous materials.

Hazardous Materials Carrier Responsibilities

  • Documents and manifests are accurate and complete
  • Proper labels and Placards are in place on both the vehicle and the shipment
  • Loading and unloading of the materials are done safely per set guidelines
  • Employee Training is complete
  • Security plans and processes are up to date
  • Incident reporting procedures are up to date
  • Adequate Blocking and Bracing is used according to set guidelines
  • Product Compatibility is accounted for when shipping multiple chemicals together

The Real Cost of Freight

The actual cost of freight can only be realized when the product is checked after it hits the dock. Aside from additional fees from things like layovers, oversized cargo, after-hour deliveries, etc., the final cost of deliveries can be influenced by things like mispacked orders, incomplete manifests, or damages incurred during shipping and unloading.

Thanks to a greater volume, several available resources, and infrastructure size, large businesses aren’t as affected by fluctuations in costs due to shipping-based issues, but Small and Medium Business (SMBs) find themselves in a tight spot where they might have to negotiate as they ship in Less Than Truckload freight (LTL), with lower volumes. Unfortunately, manufacturers shipping products don’t always have clarity on 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: A Recent Study by American Shipper

3 Transportation Challenges hindering the Visibility of Supply Chain

A supply chain can suffer from not knowing what’s going on once a product leaves the building, and the reasons are relatively simple. Poor visibility of shipping data is the culmination of the following:

01.Outdated Systems

Many companies still run their operations on antiquated systems, fundamentally designed for managing local-only supply chains. But successful supply chains operate globally, dynamically connecting production and procurement to sales and customer service with appropriate ‘in transit’ statuses. Maintaining freight visibility, especially for a multi-org/ multi-site/ multi-warehouse environment, is not an easy task, and obsolete systems make it an even more challenging objective.

A modern, cloud-based solution has the potential to provide a complete end-to-end view of a supply chain network. Switching operations to an integrated, multifunctional transportation management system (TMS) platform adds agility to your transportation network, ensuring seamless communication allowing organizations to respond proactively to unexpected issues and customer demands.

02.Disparate Systems

There needs to be effective coordination and collaboration across multiple sites/ 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.

Integrating existing applications with suppliers improves inventory management, communication, and freight visibility into all active and pending shipments. Connecting a TMS with warehouse operations allows shippers to derive detailed insights from inbound and outbound logistics within a single unified platform.

03.Lack of collaboration

Tracking shipments in real-time is the core of transportation management. As loads are distributed across the thousands of different carriers utilized by 3PLs, it can be challenging to get reliable data from the entire carrier network. Trying to track shipping information manually, based on this unreliable data, leads to misestimated quotes and customer complaints. The power of business intelligence and advanced analytics can offer real-time visibility into shipping and location data to bridge this gap and deliver accurate tracking information directly from the supplier’s carrier to the shipper. The customer is anticipating the delivery. This real-time visibility into inbound shipments helps with planning and adjustments to downstream activities as required.

Helpful Checklist Items For Determining the Right Visibility Solution

Unfortunately, not all logistics solutions are capable of delivering real-time visibility of shipments or product orders. You may have to weed through dozens of providers to find a solution that offers end-to-end supply chain visibility that meets your requirements.

A few questions to ask before finalizing a solution that works for you include the following:

  • Do they have AI-enabled software that records the movement of the truck without human intervention?
  • Are they able to generate automated email alerts in real-time?
  • How is this truck connected to the TMS?
  • How are they connecting the driver?
  • How robust is the integration? Are they able to demonstrate its capabilities?
  • Are they using SaaS technology that offers remote accessibility of data anytime?
  • Does the technology let you access the new features without the need for on-premise upgrades?
  • Does the solution provide end-to-end service or just a part of the delivery ecosystem?
  • What is its integration capacity? Can it be connected with other TMS systems, Electronic logging devices (ELDs), or Enterprise Resource Planning systems (ERPs)?

Final Thoughts

The most important takeaway is gaining end-to-end supply chain visibility. Best-in-class organizations have embraced the real-time capabilities of supply chain visibility, compliance to improve their performance. Embracing newer technologies can offer better connections to all parts of the supply chain for manufacturing companies. Providing more up-to-date information and analytics can be used to make decisions that help improve the overall optimization of cost of freight.

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

Enhancing Chemical Supply Chain Management

How To Enhance Your Chemical Supply Chain

How To Enhance Your Chemical Supply Chain 1440 810 Xcelpros Team

At a Glance

  • The supply chain management today is all about enhanced visibility and proper accountability.
  • With challenges like varying laws and regulations for different geographies, fluctuating prices of the raw materials, and lack of visibility across the board, the chemical supply chain management needs advanced solutions.
  • The introduction and integration of advanced technologies can bring positive changes to the chemical supply chain management.

As the decade ends, globalization has reached new heights. There is massive activity and anxiety related to supply chain dampeners due to COVID-19. For the chemical industry, this has opened doors of opportunities. They are taking their products across borders and getting business from all over the world.

According to a market research study conducted by the ARC Advisory Group, the chemical industry accounts for over $150 million of the market’s revenue.

The above stat shows a considerable share, and thus, it would not be wrong to say that in today’s uncertain conditions, the chemical industry is looking forward to a secure future. However, such globalization has also led to various challenges and roadblocks, especially concerning the movement of chemicals from end-to-end. The stringent supply chain that works in silos is no longer sustainable or feasible for processes to run smoothly. To solve these issues, chemical companies can make use of the Microsoft Business Applications 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 in recent times and how technology is playing the key role in enabling a modern, integrated supply chain.

Top Supply Chain Challenges in the Chemical Industry:

Every company has its own set of challenges depending on various factors, such as the size of the company, locations of their manufacturing units, the structure of the individual supply chain, etc. However, there are certain common issues faced by the chemical industry pertaining to the supply chain.

Let us have a look at the key supply chain challenges in the Chemical Industry:

  • Increased globalization means dealing with the distribution of chemicals and related raw material in different countries. Companies struggle to keep up with the laws and regulations of varying geographies. There is also an issue of compliance and worker safety when it comes to hazardous chemicals.
  • The chemical supply chain management falls prey to manual errors and miscommunications, causing potential safety hazards and monetary loss.
  • The bottom line at any chemical manufacturing company is highly dependent on raw material, natural gases, and other such commodities. When the prices of these materials fluctuate, the entire supply chain gets affected.
  • Data management seems to be a big concern for supply chain managers in chemical companies. The data involves information regarding the chemicals, their compositions, raw materials, pricing, safety precautions, distribution lists, varying protocols for worker safety, client agreements, and more. To systemize this data and harness benefit from the insights is a big challenge faced by many chemical companies who have lesser access to advanced tools and applications.

FIGURE 1: Challenges faced by the chemical supply chain

3 Ways Technology is Reshaping the Chemical Supply Chain

01.Technology Enables Creating a Connected System

Now, the world is further connected with smart devices and related applications. These applications, along with a sophisticated Enterprise Resource Planning system, can help in systemizing the chemical supply chain. This would mean system-fed entries for different geographies, their respective laws, regulations, and mandatory compliances. The system would generate a corresponding alert to related personnel of these regulations promptly, mitigating any manual error or oversight.

A connected ecosystem also provides top-to-bottom visibility in the supply chain, which would offer the top-level decision-makers a clearer picture and greater transparency across the board. This also enables better accountability and finding loopholes in the chemical supply chain.

FIGURE 2: Technologies for a Better Chemical Supply Chain Management

02.AI Helps in Preempting Changes and Strategizing a Fail-safe Supply Chain Mechanism

As mentioned earlier, the chemical supply chain management is susceptible to changes in prices of raw material, oil, gas, and other such commodities. To stay ahead of the curve, one needs to analyze and preempt the global and regional changes. An AI-enabled program is capable of churning and analyzing data in real-time to provide estimated statistics regarding these changes. This not only helps the chemical companies to make necessary modifications to their supply chain but also to strategize accordingly.

03.Big Data and Cloud in Managing the Humongous Supply Chain Data

Data collation, cataloging, and analysis prove to be intricate tasks that need tenacity and are prone to manual errors. However, with progressive technological tools like Big Data and Cloud, one can store virtually any amount of data and get it analyzed with the help of software. This categorized and analyzed data can be leveraged to generate insights that will help in fortifying the chemical supply chain for smooth transitions and better efficiency.

There is no denying the fact that the chemical industry needs to adapt to changing times. Supply chain being the backbone of this industry, it is crucial to make smart use of the right technologies to harness maximum benefits.

Key Takeaways

  • Like any industry, the chemical industry is witnessing the need for change in different facets including the supply chain.
  • With the help of cutting-edge technological tools and applications, the chemical supply chain management will be systemized and optimized for overall enhanced 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

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.

Maximum your ROI with our cloud based ERP system tailored for chemical manufacturing companies.

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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

AI ml in chemical industry

Transforming Business with AI and ML in the Chemical Industry

Transforming Business with AI and ML in the Chemical Industry 1920 1080 Xcelpros Team

At a Glance

  • Innovation is the name of the game for chemical companies to optimize operations and enhance profits. To fast-track innovations, use of AI and Machine Learning in the chemical industry is crucial.
  • Many in the chemical industry are touting benefits of leveraging AI and machine learning to analyze data, systemize processes and mitigate errors by minimizing manual interventions.
  • Human-machine combination is proving to be a transformational phenomenon that can change the way the chemical industry is functioning in the USA and all over the world.

Introduction

The world is growing and seeing changes at an unprecedented rate. The year 2020 has shown us that advancement in science, especially the field of chemicals (and related fields such as biotechnology that deal with the vast majority of chemicals), cannot come fast enough! We need faster, error-free methods to test chemical molecules, computer-generated models for process optimizations, and digitally-adept sensors for quality controls. AI and machine learning play an integral role in efficiently taking the chemical industry towards a trend of modernization and innovation.

The path to digital transformation involves infusing AI into crucial processes and milestones. The journey includes digitizing assets, automating processes based on those assets (known as digitalization), and then creating new ways of doing business.

Figure 1 AI is the greatest commercial opportunity in today’s economy

When organizations invest in AI, the goal is to create and enhance digital experiences. AI apps can employ skills to mimic human cognitive functions such as vision, speech, and natural language understanding. By including these human-like capabilities, AI can enable organizations to construct digital experiences that are smart, fast, and helpful to end-users.

A recent study by Accenture shows some promising figures when it comes to use of artificial Intelligence in the chemical industry. According to research, companies that have implemented Industrial AI in the chemical sector are exhibiting significant benefits as follows:

72%report a minimum 2x improvement in some process KPIs

37%report a 5x improvement in KPIs

4 Ways of Applying AI and Machine Learning in the Chemical Industry

While every enterprise has its blueprint to follow when it comes to the application of tools and techniques on AI and Machine Learning, certain broader areas can be common for the chemical industry. Let us have a look at 4 such facets:

01.Data Crunching and Analysis for Molecular Activity Studies

Understanding chemical products and utilizing them for desired effects usually take years of analytical studies, laboratory experiments, clinical trials, farm trials, etc. However, these days, faster results that can mitigate manual errors and minimize efforts are required. Machine learning and AI tools are effectively used to feed and churn a humongous amount of data, and can systematically analyze the said data. This data churning and analysis will help separate chemicals that are effective yet have fewer or no side-effects from the ones that do not have desired effects or are toxic. Apart from the use of AI and machine learning in the pharmaceutical and pesticide industry, possibilities can also be explored in the manufacturing industry, which is heavily dependent on chemicals. Applying AI and machine learning in the chemical industry can also help expedite the efforts in fighting climate change by estimating the damage done by harmful pollutants. This will aid companies in making essential changes in their machinery and processes to minimize the pollutants being released into the water bodies and air.

02.Result-oriented Innovation and Boost in the Chemical Industry R&D Sector

R&D forms the backbone of any industry, and the chemical industry is no exception to this. Today, major players in this sector are looking for focused R&D and innovation that can yield faster and more accurate results following the use of artificial intelligence in the chemical industry. Machine learning tools can help in exercising this type of quick research with the help of computerized permutations and combinations. It can also help in recognizing the right molecules, generate formulas, and aid in knowing the precise quantities of different chemicals required. AI, on the other hand, can help in predicting chemical combinations that can be a breakthrough in terms of innovation. These innovations can boost the ongoing and upcoming efforts in the pharmaceutical, food, biotechnology, oil and gas, petrochemical, manufacturing, and many such industries.

03.Seamless Juxtaposition of Human and Machine Efforts

Since the introduction of computers in the workplace, humans and machines have proven to be the best combination for effective results. However, digital transformation and the introduction of layers and layers of machine-generated intelligence can make this combination even more successful than ever before. Imagine an idea that has come out of the human mind, but it can be analyzed, tested, and streamlined to mitigate risks or errors even before it has physically been put to the test? This can lead to unprecedented time and efforts being saved. Such amalgamation of human and machine efforts can influence the chemical industry to fast-paced innovations, productions, operations optimization, and other concurrent developments.

04.Preventative Measures and Predictive Forecasting

In today’s industrial world, competition is steep and it is essential for enterprises in the chemical industry to be prepared and to be proactive. AI and machine learning tools can help a great deal in this by predicting snafus or future maintenance requirements. Advanced analogs and mathematical models can also be used to estimate oil, gas, and other raw material demands so that the companies can streamline their supply chain in a manner that avoids potential delays and last-minute cost hikes.

While these applications of AI and machine learning cover the broad spectrum when it comes to the chemical industry, there is still a lot of research and development going on in this field. As the world embarks upon a new journey of Industry 4.0, it would be interesting to see more transformations brought in by the use of artificial intelligence in the chemical industry.

Where is the Challenge?

AI-enabled systems are helping companies achieve objectives, goals, and enhance user experience. However, each time a system is not maintained correctly, the process begins to decay by behaving unpredictably. Organizational leadership can thus lose confidence in AI as a process enhancement system. Moreover, organizations should have the required maturity—which encompasses strategy, culture, organizational structure, and core capabilities—to own an AI-based system responsibly. In some cases, this may mean a withdrawal or rejection of AI technologies based on unsuccessful attempts to adopt AI. Organizations or their customers may lose trust in AI as a technology, branding it as unpredictable or too hard to operate. This outcome will push real digital transformation further away and cause the organization to miss out on the powerful impact that AI can have on their business.

Microsoft has worked on defining an operational model that helps organizations assess their attributes that contribute to the adoption of AI technologies. A well designed AI Maturity Model assists organizations in gathering information related to the core characteristics required for teams. Forward-thinking organizations that have embraced AI are witnessing improvement in user behavior. The transformation meets all prime objectives of a Chemical company, mainly driving productivity, sales, Environment Health and Safety, appropriate management of hazardous chemicals in the warehouse.

Figure 2AI Maturity Model

Additionally, Microsoft has compiled prescriptive guidance associated with adopting the right AI technologies for an organization’s current maturity level, while advising on how to increase maturity to embrace more advanced AI capabilities.

Key Takeaways

  • AI and machine learning in the chemical industry can be critical players in clinical trials, farm trials and overall study of chemical molecules.
  • With the cutting-edge application of AI and machine learning tools, the chemical industry can streamline its processes and supply chain for better operations and enhanced profitability.

Explore how you can transform processes, engage customers, and modernize your apps with Microsoft Business Applications.

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

it manager customer journey

IT manager customer journey

IT manager customer journey 1440 810 Xcelpros Team

Steve an IT Manager, in his job function is a subject matter expert for technology-related processes and systems. He needs to develop strategic roadmaps that align with both business and technology requirements. In regulated industries, like Pharmaceutical and Chemical, he is accountable for all IT activities and ensuring cGMP and 21 CFR Part 11 compliance. He is responsible to develop and implement corporate data compliance and governance initiatives across systems while maintaining IT Best Practices and creating secure, scalable, reliable, flexible, and compliant services.

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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

DISCLAIMER:

All statements and/or opinions expressed in this article were based on experience and / or third party materials available to the authors which formed the basis of such statements/opinions. XcelPros does not warrant the accuracy, completeness, or reliability of such underlying information (or the Company’s interpretation thereof) which has formed the basis of the Company’s and/or author’s opinion. We strongly recommend that you consult an expert from XcelPros before you take action as a result of this collateral.

Chemical Industry Software Solutions

Active Ingredient Management & Potency-Based Pricing in Microsoft Dynamics 365 The Caustic Soda Example

Active Ingredient Management & Potency-Based Pricing in Microsoft Dynamics 365 The Caustic Soda Example 1400 820 Xcelpros Team

At a Glance

  • Active Ingredient Management and Potency-Based Pricing are highly relevant to process manufacturing, distribution, and other manufacturing industries.
  • The products in these industries consist of Active Ingredients, Compensating & Filler Ingredients (sometimes referred to as buffers, fillers and excipients).
  • Active Ingredients and Potency have a significant impact on price variations in-turn affecting downstream functions such as customer billing and value.
  • In order to calculate potency, it would be required to maintain min, max and target values of batch attributes such as potency, concentration and purity on items, inventory or batches.
  • The calculation of a potency-based price that is dependent on the percentage of active ingredient purity or potency can be achieved by maintaining an attribute-based price with algebraic equations.
  • The industry requires that the purity and potency of active ingredients be captured at the time of incoming inspection / receipt of the product or at the time of quality testing of goods received.
  • Batch attributes, such as potency and purity, captured at various stages of the operation have an impact on the value of physical and financial inventory.
  • Unit of measure conversion from weight or volume would be a key element in determining the appropriate price for a certain customer-specific batch and potency requirement.
  • Manufacturing an item with a specific active ingredient, requires an ability to maintain a specific weight or volume-based formula and be able to balance a batch using compensating and filler ingredients with a compensating factor.

Active Ingredient Management & Potency-Based Pricing: Which industries is this relevant to?

  • Chemicals (Specialty, Bulk and Distribution)
  • Pharmaceutical (Manufacturers & Distributors)
  • Food & Beverage
  • Cannabis
  • Distribution
  • Textile and
  • Paper

Active Ingredient Tracking

Highly regulated and process industries such as Chemical, Pharmaceutical or Food & Beverage have an inherent operational need to manage and account for active ingredients.

Batch attributes such as potency and purity are maintained in the system along with pricing based on target values. Behind the scenes, an algebraic equation combines the unit price, quantity, batch attribute – target & actual values and determines an automatically adjusted price within the target transaction such as purchase order or sales order invoice. A key element for active ingredient management is to be able to capture potency, purity or other batch attributes during quality testing of a batch. This allows you to view inventory by recorded batch attributes and reserve these batches for the appropriate transactions. As stated above, leveraging the pricing formula allows you to implement price adjustments to the downstream transactions based on actual values.

Microsoft Dynamics 365 for Finance & Operations has extensive out-of-the-box functionality to help manage active ingredients for both make and buy items.

Item Batch Attributes

Batch Attributes are properties of raw materials, intermediates or finished products that capture the key distinguishing factors for an inventory batch. These attributes vary by industry, use and other factors such as environmental.

As discussed above, in Microsoft Dynamics 365, you have the ability to manage item batch attributes such as potency and purity. The first step would be to create an item that is tracked at a batch level and define batch attributes that can handle a range of potency values. Dynamics 365 allows for managing multiple attributes for the same item, including one primary and multiple secondary batch attributes.

A few examples of batch attributes in different industries:

Industry Example of Batch Attributes
Chemical & Pharmaceutical Potency, Purity, Concentration etc.
Food & Beverage Fat Content, Percentage Weight, Moisture, Age
Steel / Metals / Mining % of Magnesium content
% of silver content
% of zinc content
Cannabis % of CBD
% of THC
Purity
Contamination etc.

The screens below provide a quick view of what batch attributes look like in Dynamics 365 for Finance and Operations.

Figure 1 Released products – Caustic Soda

Figure 2 Released Product Details – Product Tab Expanded

Figure 3 Released Products – Manage Inventory Tab Expanded

The screens below show product-specific batch attributes that can be set for either purity or potency with an acceptable range and a target value.

Figure 4 Released Products Attributes – Purity

Figure 5 Released Products Attributes – Potency

Purchasing and Receiving Items with Active Ingredients: Attribute-Based Pricing

There are times you may purchase one or more items from an approved supplier with a specific active ingredient and it may be required to track active ingredients’ potency at a specific value.

To learn more about the receiving process in Microsoft Dynamics 365, refer to “An Overview of Chemical Distribution in Microsoft Dynamics 365”

When an item has batch attributes, you receive the item batch and enter the batch attribute value along with the vendor batch details. The attribute-based pricing that is derived during invoicing alters the unit price and net amounts based on the potency value of the batch.

Purchase prices for active ingredient purity or potency can be maintained in the attribute-based pricing details section shown in the screen below.

Figure 6 Attribute-based pricing details

Figure 7 Attribute-based pricing for Caustic Soda based on Pricing Formulas

Figure 8 Purchase Orders – Purchase Order Lines

The screens below show the different batches in inventory with specific batch attributes.

Figure 9 Batch Tracking (These are the batches in inventory with specific batch attributes. You can add / remove columns you want to see in any view)

Figure 10 Released Products – Inventory Batch Attributes

Manufacturing with Active Ingredients

Caustic Soda is just one example to demonstrate active ingredient management in process industries. The same concepts can be applied to different types of chemicals or products that contain a variety of batch attribute requirements.

A formula is defined by taking active ingredients, compensating & filler ingredients and applying a conversion factor to calculate the totals on batch production. Microsoft Dynamics 365 is able to meet this requirement with the included batch balancing functionality.

Manufacturing to meet a certain potency by using active ingredients can be tricky if you do not have a way to calculate amounts based on the potency of the active ingredient batch picked during production. When a formula is setup to meet a specific potency requirement, the weight / volume of the active ingredient, compensating ingredient and filler ingredients need to be defined.

Figure 11 Released Products – Inventory Batch Attributes

Figure 12 Released Products – Formulas Details

Formulas can be setup by maintaining the quantities of Active, Compensating and Filler ingredients along with a compensating factor designed to automatically adjust batches.

With a compensating factor, the system will recalculate and adjust batches as needed to produce desired potency values. The compensating factor always refers back to the base value, in order to correctly calculate batch quantities.

Figure 13 Formula Lines – Compensating Principle

Figure 14 Compensation Principle Example

Batch orders created for the item in Fig. 14 (shown above) will have standard values proposed at the time of estimation. When the batch order is started and the appropriate active ingredient batch is picked with a specific potency, the batch balancing function in Microsoft Dynamics 365 provides the ability to balance the ingredients based on the compensating principle setup in the Formula.

Figure 15 Production Orders – Batch Order

Figure 16 Production Orders – Batch Balancing – By confirming the formula, the balanced quantity is automatically selected to continue through the process

Active Ingredient Attribute-Based Pricing for Customer Billing

Similar to purchasing, potency-based pricing can also be active during the sales process and within customer billing.

Using the same Caustic Soda example as above, if you sell a Caustic Soda tote, the calculation will auto-adjust billing based on the potency or purity selected. I will illustrate the Caustic Soda billing based on the purity of the batch consumed through the example below.

The Caustic Soda tote is created as a product in Microsoft Dynamics 365 with a specific purity of Na2O as the base attribute. This includes an acceptable range of Na2O purity and any other customer-specific requirement for the batch. The illustration of this example starts with assigning a batch attribute and a target value of the attribute. For Caustic Soda, we use batch attribute ‘purity’ of Na2O. Microsoft Dynamics provides the ability to capture multiple attributes for an item, in this case the purity of Na2O which is the active ingredient and the purity of Caustic Soda itself becomes relevant for pricing purposes.

Figure 17 Batch Balancing

Figure 18 Released Product Details – Label Print Options

Microsoft Dynamics provides the ability to maintain product-specific as well as customer-specific batch attributes. For example, if your customer has additional potency requirements on the batch, over and above purity, the system provides the ability to maintain acceptable potency values for the batches that would be sold.

Figure 19 Released Product Details – Manage Inventory Tab Expanded

Product information management in the system has the ability to maintain attribute-based pricing from trade agreements, which is a journal to maintain sales and purchase prices.

Figure 20 Compensation Principle Example

In the example shown in the screen below (Fig. 21), the sales price is maintained in pounds for an effectivity date that is tied to an attribute-based price calculation. This can include an algebraic equation that adjusts the price based on the purity or potency of the batch being sold.

Figure 21 Attribute-based Pricing – Trade Agreement for Sales Price

The figure below shows the calculation that includes the purity of Na2O and Caustic Soda if the price is dependant on both attributes.

Figure 22 Attribute-based Pricing Details – Trade Agreements

In this example, we demonstrate the use of a simple calculation based on actual purity and target values. The system would read the below calculation and, based on the actual value of the batch, automatically adjust the price on the customer’s bill.

Figure 23 Attribute-based Pricing

Figure 24 Attribute-based Pricing

The invoiced sales order below shows the adjusted price for the batch based on the purity of Caustic Soda.

Figure 25 Sales Order with an Invoiced Line

Key Takeaways

  • Active Ingredient Management functionality in Microsoft Dynamics 365 distinguishes the “Active” content of the material from the other compensating or filler ingredients.
  • This function ensures that a company gets paid for the active ingredient content it delivers to its customers and pays its vendors only for the active or potent content of the product.
  • Microsoft Dynamics has the ability to proportionately adjust price on downstream transactions based on the quality test results captured on the Batch Attribute which determines the percentage of the Active Ingredient in the product.
  • The system has the ability to track and maintain inventory based on the percentage of the Active Ingredient.
  • Microsoft Dynamics 365 for Finance & Operations delivers powerful and comprehensive out-of-the-box functionality to support Active Ingredient and Potency Management that is critical to the process and other highly regulated industries.

About XcelPros

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