• iCM | iQM

Manufacturing Operation

Process and systems to support the bio-economy banner
  • Xcelpros Team
  • No Comments

Process and systems to support the Bioeconomy
Process and systems to support the Bioeconomy 700 500 Xcelpros Team

The public benefit gained through biological research can be seen through the eyes of a patient who receives a critical medication that did not exist a decade ago, a farmer whose higher-yield crops are turned into fuels, food, and intermediate chemicals, and a small-business owner whose innovative biobased products are breaking new ground in manufacturing. Increased societal needs for food and energy, combined with new knowledge/discoveries in biology and new methods for harnessing biological processes, have dramatically increased the economic potential of the bioeconomy.The National Bioeconomy Blueprint

Introduction

Though written in 2012, The National Bioeconomy Blueprint contains some information valuable to any company wanting to explore the bioeconomy. Critical elements are investments in research and technology.

“… If we want the next big breakthrough, the next big industry to be an American breakthrough, an American industry, then we can’t sacrifice these investments in research and technology,” then-President Barack Obama says in the report. The White House authored the report.

Government agencies at the time were supporting the bioeconomy by:

  • Identifying research and development (R&D) methods
  • Developing foundational transformative technologies
  • Integrating approaches from engineering, physical sciences and computers
  • Improving predictions of vaccine and drug toxicity and efficacy
  • Identifying and characterizing any microbial organism, including purely synthetic versions
  • Creating “science enclaves” that allow analysis of large, complex datasets while maintaining proprietary information.

The report also wanted American industry to increase investment in and production of biofuels, replacing fossil fuels with biomass systems.

Other tasks cited in the report included converting carbon dioxide into liquid fuels, improving biofuel and energy crops, developing new agricultural research programs that drive job creation and transforming manufacturing through bioinnovation.

Some of these tasks have already shown results.

Recent Biotechnical Innovations

A 2020 post on the Klabtree Blog lists 10 biotech innovations.

One of them is CRISPR-based platforms. An acronym for clustered regularly interspaced short palindromic repeats, CRISPR technology was used to create the Pfizer-BioNtech and Moderna Covid-19 vaccines. Other medicines are also using the same technology.

The CRISPR tool, “is based on a system that bacteria use to fight viruses. Bacteria develop clustered repeated sequences in their DNA, known as CRISPRs, that can remember dangerous viruses and then deploy RNA-guided scissors to destroy them,” an article in Time magazine states.

Unlike a DNA-based product that targets a cell’s nucleus, messenger RNA (mRNA)-based vaccines just need to get into the more accessible outer regions of cells where proteins are built.

Using CRISPR technology to accomplish this task, both companies were able to produce Covid-19 vaccines that meet FDA emergency standards. The Pfizer-BioNTech vaccine, now known as Comirnaty, uses its regular, non-emergency procedures. The “regular” and “emergency” variations share the same formula, the FDA states.

Another technological innovation cited by KolabTree that is still being developed involves using DNA as a computer hard drive. The concept would turn cells into data storage chambers with the not-yet-realized ability to store information similar to current data storage.

A third innovation is using base pairings of DNA and RNA nucleotides in what is known as “DNA origami” after the Japanese paper folding art form. Nanovery is using this technology to create diagnostic nanorobots. The robots are inserted into a blood sample. When cancerous DNA is found, the robots light up.

Bioeconomy Business Strategies

Having the technology to turn biological products such as corn husks into fuel does not generate money. Having people who can see profits in the bioeconomy does.

“Entrepreneurs can contribute to the (bioeconomy transformation) by commercializing innovative technologies through startups and new business models,” Andreas Kuckertz writes in a white paper published through MDPI.com.

Figue: 1Bioeconomy Business Strategies

Bioeconomy Business Strategies

Using his research, key strategies for the United States mentioned by the author include:

  • Regulatory framework: Creation of tax breaks, reducing regulatory barriers and helping entrepreneurs obtain and defend patents
  • Market Conditions: Use the public procurement process to speed market adoption
  • Access to Finance: Support the bioeconomy by using venture capital for startups
  • Knowledge Creation and Diffusion: Educate entrepreneurs, connect them to mentors and educate government agencies about entrepreneurship
  • Entrepreneurial Capabilities: Enhance university entrepreneurship
  • Culture: Create an overview of available prizes and awards (mentioned in the National Bioeconomy Blueprint)

Kuckertz suggests modifying these strategies to include those that are:

  • Holistic and based on a clear, causal rationale
  • Include policies with measures tied to clear key performance indicators (KPIs) that can measure progress
  • Have, “dedicated innovation programs accounting for the specifics of bioeconomic innovation will be required to recognize the potential of many promising and possibly game-changing entrepreneurial initiatives.”

While Kuckertz’s comments are oriented at new business development, these same strategies can be used by existing companies. One way is by taking advantage of current cutting-edge business technology: Enterprise Resource Planning (ERP) software.

Get a consultation to learn how to optimize your processes and systems to support bioeconomy.

Get Started

Common Themes in Bioeconomy Products

Each of the previous technological innovations has at least three common themes:

  1. 1.Collecting massive quantities of data, also known as “big data.”
  2. 2.Analyzing it and making sense of what is found. Researchers can pour over spreadsheets and try to understand the data or they can use software. Machine learning (ML) and artificial intelligence software helps find the nuggets. These are the test samples that show a formula’s promise while also listing all of the others that don’t.
  3. 3.Safely storing this information away from prying eyes and competitors.

The good news for many companies is the technology to accomplish these three tasks exists today.

The industrial internet of things (IIoT) lets companies gather big data. ERP software is adept at many tasks, one of which is using artificial intelligence (AI) to provide business insights.

Cloud data storage is generally considered to be more secure than that on many small and medium business (SMB) internal networks, using the Microsoft Azure platform to run Windows-based products, adding extra layers of security and reliability.

Microsoft Dynamics 365 AI is designed to help businesses gather insights into customer needs and experiences. It helps companies accelerate a single process and lets groups solve problems and make decisions based on the data.

Microsoft Azure’s cloud computing service provides a stronger, safer and much more resilient computing platform than the average SMB network. It also has the advantage of making data easily accessible from anywhere in the world, all without compromising data security.

The Bottom Line

The bioeconomy is slowly making inroads into various industries. The chemical and pharmaceutical fields are perfectly set-up to take advantage of reusable biological materials such as corn husks for fuel. Other materials can be used to produce less toxic plant-based solvents.

Making money from the bioeconomy requires not only forward-thinking investors who care about the environment, but also advanced technology like Microsoft Dynamics 365 to make sense of it all.

REFERENCE:

Top 10 Biotech Innovations you should know about

How Sustainable Operations Helps Manufacturers Grow
  • Xcelpros Team
  • No Comments

How Sustainable Operations Helps Manufacturers Grow
How Sustainable Operations Helps Manufacturers Grow 700 500 Xcelpros Team

Introduction

Every business leader has heard the term “sustainable manufacturing,” but not all know that practicing methods that help the environment can also grow their business.

“Sustainable manufacturing is the creation of manufactured products through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources,” the United States Environmental Protection Agency states. These same practices enhance employee, community and product safety in part by producing less waste that pollutes the air, water and soil.

According to the EPA, companies that use a methodical, planned approach to sustainable manufacturing processes:

  • Increase operational efficiency by reducing costs and waste
  • Respond to or reach new customers and increase competitive advantage
  • Protect and strengthen brand and reputation and build public trust
  • Build long-term business viability and success
  • Respond to regulatory constraints and opportunities

Fostering Growth

These environmentally friendly sustainable manufacturing practices help companies grow by reducing production costs long term. For example, instead of paying thousands of dollars each month to an electric company to light and cool a 300,000 square-foot manufacturing plant, consider covering a flat roof with efficient solar panels.

The average payback time for a home solar electric installation (industrial estimates were not available) is roughly 6-10 years, though it varies depending on the climate and other factors. Solar panels also tend to last 25-40 years meaning roughly three-quarters of their useful lives is spent generating free electricity. The most recent designs are much more efficient, producing more power in a smaller size, than those made 10 years ago. The result is greater efficiency, allowing manufacturing facilities to cover less of their roofs while producing as much or more power than the older models.

Production plants can also reduce their massive electrical bills with skylights. The waterproof domed coverings help illuminate work areas, reducing the need of electric lighting. Extended exterior shelves can reduce sunlight, cutting cooling costs.

Figure: 1 Sustainable Manufacturing – a Big Picture

Sustainable Manufacturing - a Big Picture

Turning Trash Into Treasure

Other sustainable methods look at ways to reduce waste, especially by converting some “trash” into new products or using it for new methods.

One website alone lists 35 artful ways homeowners can recycle wooden pallets. These new uses include making tables, bed frames, stairs, mounting frames for heavy electronic display monitors and a host of other uses. Many of these same methods work for industrial companies in terms of outfitting conference rooms and other non-work areas.

From an industrial perspective, worn pallets can be repaired, cleaned and reused. They can also be sold, recouping some of the cost. Other uses for worn pallets include chipping them, turning them into wood pellets. The pellets can then be burned, generating heat and electricity.

Get a consultation to discover more about building sustainable operations for your manufacturing company.

Get Started

Cascading Chemicals

Recycling is a large part of the sustainable “green” economy. Industrial chemicals can be recycled. They can also be reused through a process known as “industrial symbiosis,” greenbiz.com states. One example cited uses ferric chloride, which is a byproduct of steel pickling in hydrochloric acid, to treat water.

“Frequently, recycled chemicals are not only cheaper than newly produced ones, but they also reduce resource consumption, waste generation and greenhouse gas emissions. The carbon emissions through solvent recycling are 46 percent – 92 percent lower than those of new solvent production,” the website states.

When the article was written in 2019, industrial giants Siemens and Evonik were conducting research to convert the most common greenhouse gas—carbon dioxide (CO2)—into common industrial chemicals such as ethylene.

Other methods used to reduce chemical and industrial waste cited by greenbiz include swapping what might be one manufacturer’s trash with a different nearby business. That business can use these materials in its products.

Another environmentally friendly industrial method is “leasing” chemicals. In this model, a manufacturer sells the functions performed by the chemical using functional units, not the chemicals themselves.

Large manufacturers with their own wastewater treatment plants can redesign those facilities in ways that help the company turn a profit and grow. Companies interested in practicing sustainable manufacturing practices can modify existing equipment to produce energy, clean water and chemicals because, “the future of sewage is power and profits.”

The greenbiz.com article ends with a quote made in 1848 by the former president of the London Royal College of Chemistry, R.W. Hoffmann: “In an ideal chemical factory there is, strictly speaking, no waste but only products. The better a real factory makes use of its waste, the closer it gets to its ideal, the bigger is the profit.”

Technology Can Spot Opportunities

One way a company can practice sustainable operations management is by using its data wisely. Especially in forward-thinking firms that use internet of things (IoT)-enabled devices, they have access to mountains of information.

Combining a well-thought plan with the right software lets these firms look at everything coming into their warehouse—including packaging—as potential profit sources. Enterprise resource planning (ERP) products such as Microsoft Dynamics 365 and its Supply Chain Management Module let companies of any size keep accurate track of their inventories. Add in the Integrated Chemical Management component and chemical manufacturers have an accurate label management solution that also produces safety data sheets.

By understanding the chemicals involved and working with sustainability experts, plant managers can evaluate their current conditions.

Executives interested in sustainable production and consumption—and being more competitive—will want to ask questions similar to these: What current waste products and materials can we use for secondary purposes or repackage and sell to someone in a different industry? Can we reuse packing materials we receive to pad and protect outgoing shipments? Are we using our raw materials effectively or are there ways we can become more efficient? How much power do our plants use? Are there affordable ways of reducing that consumption while also generating some of our own power all while meeting our long-term business goals?

Asking questions like these, and then using powerful software to find the answers, help innovative firms generate more money. That in turn can use sustainable practices to fuel growth.

The Bottom Line

Sustainable manufacturing involves looking at everything a company has, from a different angle. More office employees are working from home, freeing up space. Can we use that space for a different purpose instead of looking at empty desks? Can we move items around and expand our production facilities or our warehouse without having to build or buy new facilities?

Operations managers wanting to fuel growth by reducing power consumption can use ERP software to find ways to save money and new ways to make money. All it takes is a little outside the box long-range thinking.

Pharmaceutical Quality Control : Improving Methods & Systems
  • Xcelpros Team
  • No Comments

Pharmaceutical Quality Control – Improving Methods & Systems
Pharmaceutical Quality Control – Improving Methods & Systems 700 500 Xcelpros Team

By the Numbers

Ensuring pharmaceutical products meet regulatory quality standards is critical for business success, especially now. Companies that consider quality an afterthought do so at their peril. Companies meeting those standards are finding more of them approved at a faster rate than ever before.

  • 209 new drugs were approved by the FDA from 2000 – 2008
  • 302 new drugs were approved by the FDA from 2009 – 2017
  • 59 new drugs were approved in 2018, an all-time record
  • 53 new drugs were approved in 2020, #2 all-time
  • FDA review times decreased from more than three years in 1983 to less than one year in 2017
  • Between 2011 – 2015, the FDA approved 170 new drugs compared to 144 for the European Medicine Agency, while also doing it 60 days faster
  • The FDA approved 168% more drugs in 2018 than in 2016 because companies met quality standards

Figure: 1FDA Approvals for Pharmaceutical Products

FDA Approvals for pharmaceutical products

Introduction

Quality plays a pivotal role in the success of any business. Shipping delays now are often caused by products not meeting mandated quality standards. This adds stress to production environments and can potentially impact a company’s public perception. For example, 2018 saw 73 drugs subjected to FDA recalls, market withdrawals and safety alerts.

Companies saying yes to sub-standard products to the market are finding the results can be catastrophic. Some of the damage can be irreparable.

Those embracing modern-day Quality Management by supporting technology initiatives are finding success. These firms ensure that the right systems are in place to allow a product to pass all quality checks.

Continuing to embrace changing technology can help manufacturers in highly regulated industries leveraging it to stay ahead of their competition.

Figure: 2Classification of Quality Management

Classification of Quality Management

The Evolution of Quality Management

Today, quality management has evolved from being an afterthought to a rigorous self-discipline that most modern manufacturing companies embrace. Quality control in the 1960s has evolved to become today’s “total quality control.”

The US FDA is tightening its norms to ensure higher quality standards before approving medicines for sale. Pharmaceutical manufacturers are responding to such challenges by increasing their quality standards as shown in the graphic below.

Figure: 3 The Evolving Definition of Quality Management

The Evolving Definition of Quality Management

Process Improvements in Quality Control

Improvements always start by understanding departmental issues. Some typical activities in a pharmaceutical company’s Quality Control department are highlighted by:

  • Managing quality control tests
  • Managing quality control specialists and their workload
  • Allocating and calibrating test instruments
  • Establishing appropriate test methods
  • Documenting test specifications
  • Performing tests in priority order
  • Accurately recording test results

Following up on this involves analyzing trends and quality data plus running stability studies on batches. This is just a quick and simplified view; in reality, all of the activities listed above have many details involved. Ensuring that all processes and procedures are handled with precision ultimately reflects on how well a company maintains its quality standards.qc pharma

Get a consultation to learn more about Improving Pharmaceutical Quality Control and Systems.

Schedule Call

Processes in the Quality Department

A typical day in the life of a Quality Control department could start with lab analysis and paper requests to perform quality tests on a sample batch. There could be multiple batches for different products produced in-house or received from third party manufacturers.

The quality lab prepares test instruments for each test. It accurately records the test results along with any digital signs-off recorded for each work order. Taking a quick view of what is involved in “getting it right,” an understanding of all essential requirements for an optimal quality process could change.

“Use cases with digitization and automation have demonstrated a more than 65% reduction in deviations and over 90% faster closure times.” The Future of Quality Control, Pharma Manufacturing

Achieving optimal quality requires precisely following standard—and possibly regulated—operating procedures. Deviations are not allowed unless the “method to deviate” is clearly spelled out.

Getting staff to meet the optimal quality goal is challenging without a stringent system in place. For example, using a paper-based system requires adding laborious tasks with corrections and piled up paperwork. Every time an audit occurs using this system requires digging through stacks of paper to find the right answers.

Figure: 4: A Central Filing System to Manage Documents and Information

>A Central Filing System to Manage Documents and Information

Quality Control Systems

Pharmaceutical companies that are implementing an electronic system need to decide how tightly to build their system. Some users may be uncomfortable with various systemic restrictions or uneasy when user errors are found.

People could start feeling anxious about making mistakes since every change has a digital stamp tying the person modifying the data. Fixing errors can become cumbersome especially when using a controlled and validated system that is 21 CFR part 11 compliant.

Effective QC systems replace discomfort by getting users to develop good habits. This starts by providing them with clear, accurate and thorough information about how the overall system works. A well-planned training plan can help users move from discomfort to being champions promoting the process in the organization.

People with a basic understanding of compliance prefer an electronic system for its strength and ability to capture real-time data. Instead of continuously fixing errors, workers proactively do it right from the start.

When the goal is to boost efficiency throughout an entire organization consider evaluating a reliable process that can be quickly adapted by the QC department.

Elimination of up to 80% of manual documentation work will improve productivity. The Future of Quality Control, Pharma Manufacturing

What Plant Managers Look for in Quality Management Challenges

Plant Managers have specific views of the business since they oversee the overall plant operations. Key concerns plant managers or general manager address include:

  • Quality Management
  • Compliance with evolving regulatory standards
    • Taking control of documents such as Certificates of Analysis (COAs)
  • Safety
    • Corrective and Preventative Actions management (CAPA)
    • Location directives
    • Raising flags when two reactive chemicals are placed in proximity
    • User adaptability and training to conform to the new Quality standards

These concerns are typically addressed by:

  • Efficient Document Management. It allows you to centralize documents into a secure repository that is seamlessly accessible. This ensures quicker decision making and effective change management. It also helps in ensuring document visibility, enhances product traceability by tracking amendments and documents safety with revision control features.
  • Addressing non-conformance. Meeting this requirement can be done through a unified platform to log non-conformance, noting the quality of incoming raw materials plus reviewing complaints, delays and other issues. This helps in addressing compliance at an early stage, paving the way for corrections and registering them in the system.
  • Corrective & Preventive Actions. Having software that documents these while adding built-in advanced analytical features built in helps companies learn from past actions. Registering a non-conformance incident into the system initiates a workflow for corrective measures. This system learns from past incidents and recommends preventive actions to prevent or reduce similar incidents from occurring again.
  • Implementing the right kind of tools and technology such as can help with process automation and reduce data entry errors while also tracking process efficiency.

Identifying the right system to help make the most impact is the first essential step to moving in the right direction. After crossing that hurdle, it’s important to build a “to be” mindset instead of worrying why the system doesn’t perform as it did in the past.

Evaluate how stringent you want your process to be based on your company’s needs and then accommodate a well-defined method that is native to the application.

Key Takeaways

Quality management is no longer an afterthought. It has evolved to become a discipline in most prosperous manufacturing organizations. Once considered a business function that hindered speed to market and product launch, quality management now embraces modern technologies – fueling innovation, adding efficiency, eliminating the scope of incidents within a plant, and offering better predictions for the future.

  • Pharmaceutical companies that evolve to modern, automated quality control systems are able to empower their workforce to rapidly adopt process improvements and optimize all the functions in the department.
  • Adopting better tools in one department typically sets the standard for the entire ecosystem. It includes functions such as regulatory compliance, procurement, demand management, research & development plus inventory and warehouse management.
Helping your company fit into the-bio-economy banner
  • Xcelpros Team
  • No Comments

Helping Your Company Fit into the Bioeconomy
Helping Your Company Fit into the Bioeconomy 700 500 Xcelpros Team

Introduction

The term “bioeconomy” has begun gaining steam but many executives don’t know what it means or how it might affect their business.

Brain-biotech.com defines bioeconomy as producing renewable biological resources and then converting them plus waste streams into valued-added products. These include food, animal feed, bio-based products and energy, including fuels.

A related but different concept is the circular economy, “where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized,” the article states.

Both concepts share the goals of increasing resource efficiency and lowering demand for new petroleum resources while creating more jobs. Tying into both of these is “cascading,” which promotes recycling and remanufacturing. An example of cascading is using fresh wood to build furniture. When the main product’s life ends, part or all of the wood is used for something else such as a different piece of furniture or a planter.

“The circular economy includes all kinds of material streams with different utilization routes. Organic recycling, which equals biodegradation, and even the capture and utilization of carbon dioxide from industrial processes or the atmosphere are included,” the report states.

One way the bioeconomy affects industry is by producing renewable carbon compared to fossil carbon such as oil and other fossil fuels. The bioeconomy and circular economy have a common goal: creating a more sustainable world with a low carbon footprint. Both avoid using fossil carbon. Using sustainable resources helps achieve climate targets, brain-biotech states.

Among the stated goals of the bioeconomy and the circular economy are:

  • Reducing the use of fossil fuels
  • Wiser management of natural resources
  • Continually reusing minerals, metals, and biomass from agriculture, forests and the seas
  • Creating biodegradable and compostable products
  • Generating ways to capture and reuse carbon dioxide in the Carbon Capture and Utilization (CCU) process
  • Reducing greenhouse gas emissions such as carbon dioxide (CO2)
  • Reducing waste, especially anything going into landfills
  • Promoting research across disciplines and borders
  • Creating more jobs in rural and urban environments

Impacts of the Bioeconomy on the Financial Economy

Features unique to the bioeconomy include creating new products and better utilization of agriculture and forestry, Brain-biotech states. Among its examples are using genome editing to create products with lower toxicity and new functions plus more nature-compatible (i.e., biodegradable) and healthier consumer goods.

So where can we see the bioeconomy? “The U.S. bioeconomy is all around us: new drugs and diagnostics for improved human health, higher-yielding food crops, emerging biofuels to reduce dependence on oil and biobased chemical intermediaries,” the 2012 White House’s National Bioeconomy Blueprint is quoted as saying in youmatter.world.

Youmatter.world connects the bioeconomy and circular economy by referring to the circular economy as “the what” as in what are desired outcomes. The bioeconomy is “the how” as in how biophysical processes can be enhanced to achieve the expected result.

Transforming the U.S. economy from one based on hydrocarbons (i.e., fossil fuels) to a bioeconomy, will have the most dramatic effects. These effects will be felt most strongly in the energy, agricultural, chemical, industrial and consumer products and transportation industries, attorney Neil Belson wrote in 2016.

Among Belson’s conclusions are, “an economy that runs primarily on renewable, domestically produced bio based raw materials is inherently less vulnerable to disruption than one which relies on or is heavily influenced by the availability of foreign fossil fuel energy supplies.”

Among the biofuel resources are corn stalks and wheat straw, animal manure, household and industrial organic wastes containing carbon and dedicated fast-growing energy crops.

Belson also suggests a major target of opportunity is the $164 billion U.S. organic chemical industry.

By the Numbers

After several years of declining revenue caused by low fossil fuel prices, the Organic Chemical Industry is expected to resume growing in 2021, reports from IBISWorld state. Among the highlights are:

  • 13.2%: The 2021 increase in market size estimated by the Organic Chemical Manufacturing Industry (OCMI).
  • $106 billion: The 2021 market size measured by revenue of the OCMI
  • 1,107: Number of organic chemical businesses in the US
  • 75,441: Number of people employed in the organic chemical businesses in the US

Current top products and related manufacturing activities are producing:

  • Ethyl alcohol
  • Cyclic crudes, coal tar, wood chemical and intermediate products
  • Basic organic chemical products
  • Fatty acids
  • Synthetic organic alcohols
  • Synthetic flavor and perfume materials
  • Bulk pesticides

This list does not include forestry-related materials such as major wood products.

According to the Government

The US Department of Agriculture released the 128-page “An Economic Impact Analysis of the U.S. Biobased Products Industry” in 2015.

Using 2013 numbers, the US Biobased Products Industry:

  • Contributed 4 million jobs
  • Added $369 billion to the U.S. economy
  • Created 1.64 more jobs for every 1 biobased products job
  • 20,000 products in the BioPreferred program database not including traditional textile fabrics or forest products. The true number is closer to 40,000, the report states.
  • 300 million gallons of petroleum replaced by biochemicals and natural-based products replacing petroleum products such as Styrofoam.

Get a consultation to learn how to get your company ready for the bioeconomy.

Get Started

Areas of Opportunity

Figure: 1Number of Installed Ethanol Biorefineries in the US

Number of Installed Ethanol biorefineries in the US

Statista states that in 2019, the US had more than 200 ethanol biorefineries. In 2015, the USDA listed 213 such refineries. Audi, BMW, Porsche and Volkswagen make diesel vehicles that can use biodiesel blends, edmunds.com states. As of 2014, most biofuel came from soybean oil. The US Department of Energy states that the B20 biodiesel blend contains 2% – 6% biodiesel mixed with petroleum fuel.

Adding biodiesel improves fuel lubricity making vehicles easier to start and reduces ignition delay. It also reduces premature wear on moving parts even in concentrations as low as 1%, the Alternative Fuels Data Center states.

Chemical and pharmaceutical companies, take note: Modor Intelligence estimates the market for biochemical reagents will grow at a CAGR rate of 9.1% between 2020 – 2025. This market is defined by products such as cell and tissue reagents, electrophoresis and others plus geography. Asia Pacific is the fastest growing market while North America is the largest.

Chromatography reagents have the greatest demand with their use in many pharmaceutical processes such as separating chemicals and biomolecules, diagnostics and protein purification.

Market Research Future’s report on the Global Bio-Based Chemicals Market states the top products between 2019 – 2025 will be bioplastics, bio-lubricants, bio-solvents, bio-based acids, bio-surfactants, bio-alcohols and others.

Let Technology Help

What chemical wastes currently costing the company money to be shipped to a landfill can be reused to boost profits? Companies using technology like Microsoft PowerBi and Microsoft Dynamics 365 to organize their data can organize waste into its core components. Some of it might be easily converted into biofuels. Others might be broken apart with components becoming biodegradable solvents.

Another way tech can help is by looking at existing customers in growing markets and suppliers in areas where key crops are grown. Are they ways to piggyback shipments and reduce transportation costs while also cutting air pollution? Microsoft Dynamics 365 Supply Chain Management can combine and crunch data. While helping a business run much more efficiently, it can also offer insights into new ways to use existing products.

The Bottom Line

The bioeconomy is here to stay, as is global warming. Companies entering bioeconomy markets should look at new ways to use plant-based materials to replace petroleum products, like the chemical and pharmaceutical industries using plant-based solvents to develop new medicines because they are less toxic and better for everyone in the long run.

Alternate fuels, fibers, chemicals made from plants and other biological sources are just a few of the many potential products whose demand will continue to rise.

Using cutting-edge enterprise resource planning software can help a company more accurately evaluate its own products and resources. Who knows, there just might be the materials to build some bioeconomy products already sitting on a warehouse shelf. With the right tech, you will know what you have.

Overview of Chemical Distribution in Microsoft Dynamics 365
  • Xcelpros Team
  • No Comments

An Overview of Chemical Distribution in Microsoft Dynamics 365
An Overview of Chemical Distribution in Microsoft Dynamics 365 700 500 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

Get a demonstration of Microsoft Dynamics 365 for your chemical distribution needs.

Schedule Demo

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 list view 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.

References: Why Specialty Chemical Distributors Need to Raise Their Game

The Road to Success Implementing Microsoft Dynamics 365
  • Xcelpros Team
  • No Comments

Jump-starting resilient and reimagined operations
Jump-starting resilient and reimagined operations 700 500 Xcelpros Team

Jump-starting resilient and reimagined operations

Based on a wonderful piece from our friends at McKinsey, describing the effort needed by businesses moving forward after COVID disruptions. A reminder that businesses able to maintain a certain level of speed during the transition can create a significant long-term advantage.

Get a consultation to learn more about building resilient operations for your company.

Get Started

How an ERP system can help improve Manufacturing performance
  • Xcelpros Team
  • No Comments

How an ERP system can help improve Manufacturing performance?
How an ERP system can help improve Manufacturing performance? 700 500 Xcelpros Team

At a Glance

  • Installing modern enterprise resource planning (ERP) software comes at a high cost for manufacturing companies. They want to use their software investments to maximize manufacturing performance.
  • Manufacturers can best use their ERP model by letting their production line and vendors work in tandem with the software to streamline processes.
  • ERP systems are no longer a part of the business backend. Newer tools and applications like cloud computing, Internet of Things (IoT) and Machine Learning are changing ERP systems. All of these technologies affect overall return on investment (ROI).

Introduction

The general benefits of using a comprehensive tool like ERP are well known by most manufacturing organizations regardless of size. However, there are still ways with which ERP systems can be used to better overall operational efficiency in manufacturing, streamline existing processes and improve the production line. How solutions like ERP become the catalyst in generating ROI are usually the difference-makers for the manufacturing sector.

Mid-size businesses’ adoption of ERP software will grow at a CAGR of 7.9% from 2014 to 2020.– alliedmarketresearch.com

As more companies modernize their ERP, they want to understand how they can adapt and manipulate their current practices to maximize their technology investments. First, understand how ROI is calculated in terms of ERP in the manufacturing industry.

Figure 1:Determining the ROI of Manufacturing ERP

Determining the ROI of Manufacturing ERP

Calculating the ROI for ERP Manufacturing: A Comprehensive Look at the Benefits of Installing an ERP System

Every organization has specific short and long term goals in mind when installing an ERP system. While the ROI might be a relative concept for every manufacturer, certain common areas can help decide the benefits an ERP system brings to your company:

  • Does the ERP system help streamline production processes and improve overall production line efficiency?
  • Does it reduce human intervention, lowering the cost of labor for data management and analytics?
  • Does it help better manage purchases, procurements and inventory?
  • Does it provide real-time visibility across the production line for improved communications and faster response times?
  • What other tangible benefits in terms of cost savings and profit gains can you see after installing the ERP system?

Answering these questions lets you calculate the ROI for your ERP.

Take Our Assessment to Get Started With Digital Transformation.

Get Started Now

The Road to Better Manufacturing ROI: Improving Manufacturing Performance with ERP

01.Efficient Machine-to-Machine and Machine-to-Human Interaction

In today’s cloud-dominated software world, everything is connected through the Internet. Manufacturers can enhance their ecosystems by making real-time connections between the workforce and machines. When everyone from the top floor to the shop floor can view the entire production line, it lets skilled workers use smart manufacturing techniques to save time and effort.

Using ERP software to adopt smart manufacturing techniques helps manufacturers avoid production delays while efficiently tracking material and equipment. Using these methods will generate significantly more revenue.

Figure 2:ERP in the Manufacturing Industry

ERP in the Manufacturing Industry

02.Better Inventory Management

Large-scale manufacturers can afford to hire a larger workforce to manage their inventories. Small and mid-scale businesses lack that luxury so inventory problems can cause financial losses. Efficient larger companies are looking for a centralized network that can keep track of raw materials, incoming and outgoing shipments plus maintenance schedules.

A sturdy, modernized ERP system is designed to handle these tasks where older legacy platforms fail.

ERPs allow companies to get real-time data on their inventory, allowing them to better predict and manage inventory. Every manufacturing company—large or small—understands that accurately managing inventory is a must if it wants to avoid stock-outs and related production delays. A robust ERP system improves ROI by helping manufacturers more accurately manage inventories.

03.Forming a Competent Skill Base

Advanced software and or mechanical tools can only help boost ROI when the workforce is trained in how to use them. An ERP system is no exception. When an ERP is integrated with cutting-edge applications like IoT, machine learning, advanced analytics, and artificial intelligence, training becomes critical. Having a well-trained, expert workforce lets companies take full advantage of their ERP. Taking the time and spending the money to train staff reduces problems and provides long-term profit gains.

Key Takeaways

Making these changes in your manufacturing ecosystem will help you maximize the benefits of your ERP system. They will also solidify your work standards and technical competencies.

  • The cost of installing a modern ERP system for manufacturers is countered by improving the return on investment.
  • Regardless of size, manufacturers should look at ERP software as an integral part of their production line. Training their workforce in how to use its many features will boost overall profits.

Key Solutions to Chemical Company Operational Challenges
  • Xcelpros Team
  • No Comments

Operational Challenges in a Chemical Company: Key Solutions
Operational Challenges in a Chemical Company: Key Solutions 700 500 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.

Avail a Consultation for to learn how to overcome operational challenges in your chemical company

Get Started Now

latest trends in pharmaceutical manufacturing industry banner
  • Xcelpros Team
  • No Comments

Latest Trends in Pharmaceutical Manufacturing Industry 2021
Latest Trends in Pharmaceutical Manufacturing Industry 2021 700 500 Xcelpros Team

By the Numbers

In a July 2021 report, Grand View Research estimated the 2020 global pharmaceutical manufacturing market value at $405.52 billion. Key metrics include:

  • 11.34%: The industry’s expected compound annual growth rate (CAGR) from 2021 – 2028
  • $957.59 billion: The revenue forecast for 2028
  • 77.95%: The retail segment market share in 2020

The IQVIA Institute for Human Data Science used a five-year estimate from 2018-2023 in its 2019 report. This report estimated spending on medicine to top $1.4 trillion by the end of 2021. Looking ahead to anticipated global medicine spending and growth in 2023 shows the top individual regions in terms of spending and 5-year CAGR as being:

  • United States: $625 – $655 billion, + 4% – 7%
  • Pharmerging: $355 – $385 billion, + 5% – 8%
  • Top 5 Europe: $195 – $225 billion, + 1% – 4%
  • Japan: $89 – $93 billion, – 3% – 0%

“Pharmerging” is a term given to emerging nations in areas such as Africa and parts of Asia.

Figure: 1Estimated medicine spending by companies in 2023

Estimated medicine spending by companies in 2023

Figure: 2Estimated growth rate of medicines by 2023

Estimated growth rate of medicines by 2023

5 Topics to Ponder

Despite all the problems and deaths caused by Covid-19, along with its impact on pharmaceutical manufacturing and the U.S. trade war with China, the market for medicines and related products is staying strong.

Looking several years out, one question CEOs and CFOs must ponder is what changes can we make now to prepare for a profitable future?

According to The Medical Futurist, the Top 5 trends for leaders to consider in the coming years include:

  1. 1.Using artificial intelligence to speed research & development. Spending on AI in healthcare alone is expected to hit $31.3 billion by 2025.
  2. 2.Empowering patients to aid in drug design and advisory boards. TMF notes the Food and Drug Administration has its own patient engagement advisory committee. The FDA states the committee considers different topics including the design of clinical investigations, communicating device benefits and risks, digital health technology and more.
  3. 3.Conducting experiments using computer simulations or “in silico,”. This is another digital trend in pharmaceutical manufacturing. This method eliminates animal testing and side effects on humans and animals. So far, this technology is less than halfway to becoming a reality, though.
  4. 4.Boosting the supply chain with technology such as blockchain to enhance security and improve inventory tracking. “Counterfeit drugs might make a cheaper alternative but are the cause of tens of thousands of deaths worldwide while the fake drug trade continues to be a profitable multi-billion dollar business,” according to TMF.
  5. 5.Using technology to appeal to more providers and payers. TMF mentions a wearable monitoring device and an app for feedback from doctors plus the app itself. Another technology is 3D printed pills such as Spritam that gained FDA approval in 2015.

Another topic mentioned in a different report is using real-world-evidence (RWE). A 2018 report by Deloitte defines RWE as, “clinical evidence about a product’s usage, potential benefits and risks derived from real-world data.”

However, Deloitte’s survey also highlighted three potential barriers to RWE adoption by pharmaceutical companies:

  • 75 percent: Major lack of receptivity by external stakeholders
  • 70 percent: Lack of understanding by internal stakeholders
  • 65 percent: Lack of access to necessary external data

AI and ERPs

Enterprise Resource Planning (ERP) software such as Microsoft Dynamics 365 Finance can support different AI modules, as needed. Depending on a business’ requirements, AI can help conduct research more efficiently, automate manual processes and perform other repetitive tasks.

AI benefits researchers through natural language processing and reasoning, learning from data and optimization addressing problems. One example cited by the Royal Society is using “deep” neural networks to identify features required to solve problems. Another uses reinforcement learning to examine many scenarios and assigning credit to different moves—such as chemical combinations—based on performance.

When it comes to research and manufacturing of pharmaceutical products, AI helps researchers use genomic data to predict protein structures, improving diagnosis and developing new treatments. Using machine learning—one part of AI—to predict the three-dimensional structure of proteins from DNA sequences is another example. This is quickly becoming one of the biggest trends in the pharmaceutical industry in 2021.

By creating a highly-detailed computer model that replicates a human organ, pharma companies can see the effectiveness of different drug therapies on specific diseases.

When it comes to pharmaceutical manufacturing technology, which versions work? What are the side effects? What changes can we make to reduce the side effect’s severity? These are some of the questions AI can help answer quickly and efficiently without experimenting on humans or animals.

In terms of business, “artificial intelligence technology allows businesses to automate a variety of processes, frees up employees’ time and helps improve productivity.” The result is greater output in less time at lower cost, according to Intellspot.

AI also helps capture competitive research and analysis. One tool with that capability is Microsoft Power Bi. This software has three types of AI transformations:

  • Text analytics tags images and extracts key phrases
  • Vision analyzes images
  • Azure ML helps generate insights and predictions

ERPs and Regulatory Compliance

A major obstacle unique to technology in pharmaceutical manufacturing is dealing with FDA regulations. Many of these rules require strict recordkeeping. Modern ERPs, which share data between departments, allow companies to keep more accurate documentation and inventory. ERPs allow executives to review data for accuracy, ensuring that information from Inventory Control matches what Finance says it should report.

A key feature of sharing information between different departments such as Inventory Control and Finance, companies can spot areas for improvement. Are FDA documentation requirements being met? A simple query can give a CEO the answer for any department anywhere in the world.

ERPs can also ensure that product communications meet the FDA’s stringent requirements for truth under the Federal Food, Drug and Cosmetic Act (FD&C Act). These laws can result in severe fines for conveying important information the FDA considers misleading.

Labelling is another major part of FDA rules, one where D365’s Inventory Control Module for Dynamics Supply Chain Management stands out. This lets businesses generate barcodes and other labels, tracking products and batches from the moment they arrive through production to their delivery to customers.

Summary

Pharmaceutical manufacturing technology, like the use of AI or ML in research & development, are quickly becoming leading pharmaceutical industry trends since 2020, helping make pharmaceutical companies leaner and more efficient. Modern software like tier 1 ERPs lets them gather, sort and analyze information obtained from the continuous manufacturing of pharmaceuticals much more rapidly than ever before.

Keep up with the Pharmaceutical Manufacturing trends. Get an obligation trial of Microsoft ERP tailored for the Pharma Industry.

Schedule Demo

enhance supply chain planning within pharmaceutical operations banner
  • Xcelpros Team
  • No Comments

Enhance Supply Chain Planning within Pharmaceutical operations
Enhance Supply Chain Planning within Pharmaceutical operations 700 500 Xcelpros Team

Introduction

The COVID-19 pandemic has created significant changes in market dynamics, forever changing the face of the global economy. Along with the pandemic’s impact on our daily lives, there has been a ripple effect in the day-to-day operations of Pharmaceutical manufacturing. As industries around the world continue to adjust to changes, Pharmaceutical manufacturers in specific, are noticing technology, process, and infrastructure gaps that are impeding growth and sustainability. Additionally, businesses that were forced to slowdown production during the initial stages of COVID-19 and are now getting back to full momentum, are finding it difficult to manage end-to-end operations.

Pharmaceutical companies cater to a customer base that is dependent on their products to manage patient health. This requires additional efficiency in everything they do, especially for planning supply-demand. The primary objective is to not halt manufacturing, as the dependencies can impact the entire Pharma value chain. Since pharma companies are quality controlled, there is an additional time factor that comes into the picture while determining the right deadlines to produce finished product and deliver to end customers. The entire process from drug discovery to packaging for delivery is a series of collaborations within the supply chain before the final product reaches the end customer.

Roughly 66% of the surveyed were concerned that COVID-19 could result in a possible supply chain disruption for pharmaceutical products. The statistic illustrates concern levels on possible drug supply chain disruptions due to the COVID-19 pandemic as of April 7, 2020. Matej Mikulic | Statista

The Planner’s Panorama

Due to the rapid changes in the global supply chains, production planners at pharmaceutical manufacturing are now tasked with surveying inventory and operations with a new set of eyes. Organizations need to be more watchful of new safety standards related to inventory storage, retrieval, usage of material, and equipment maintenance. Tools like Visual Gantt Charts are becoming invaluable for planning and managing inventory. The ability to depict a weekly schedule of operations for different production jobs and a clear picture of resource capacity is a core requirement for any good production planner. The production planner’s prime focus is to ensure there are enough raw materials and resources (equipment or human resources) to ensure a near-to-perfect supply-demand ratio. An additional element that supports a planner is to have inventory visibility within their current warehouse and plan transfers of inventory from overflow warehouses.

Operations gantt in batch manufacturing

Simple visual planning methods are no longer adequate to correctly manage all inventory-supply-demand processes and ensure proper movement of transactions across the company’s supply chain.

What planners need is a robust system that can track supply – demand by including a complex set of parameters such as lead times, working calendars, the capacity of equipment and capability of vendors to ship materials on a timely manner. Planners also need the ability to alert different departments of the next steps based on plans made for upcoming weeks or months. Any modern system should be able to offer required insights including the current state of batches manufactured and available equipment for future work orders.

A production planner often prefers handling the supply chain proactively rather than reactively by responding to the demands. The planner needs visibility of when the finished product will be ready, tested, and released for shipment. This type of planning helps overcome downtime and shortages in raw materials, which is a common issue in most companies. Responding quickly to changing inventory is one way for planners to be more proactive.

Process manufacturing operational efficiency

Even today, many small and medium-sized pharmaceutical companies continue to use a combination of excel sheets, inventory reports, and some old school methods when managing their supply chain. As industries continue to face changes related to the COVID-19 pandemic, only companies that have thought ahead and have invested in an automated AI-based planning system that can assess and predict future demand as well projected resource plans will be best equipped to handle their product delivery on time and in full. Companies now need a quicker and more streamlined process to take their products to market.

The Role of a Master Planning and Scheduling System

01. MPS Driven by Demand

The goal of a Master Planning and Scheduling (MPS) system is to provide suggestions to meet material requirements. If set up correctly, MPS systems respond to demand and plan supply accordingly. Demand usually comes from sales orders recorded in the Order Management system. Master planning ties Planned orders for Production or Procurement to corresponding sales orders. The supply requirements are then calculated based on settings for each item that is included in the Finished Goods Bill Of Material(BOM). The coverage settings of an item show precisely how and when to send feedback with a view of current stock levels or foreseen changes in stock levels from existing planned orders in place.

02. Planned Supply

MPS systems use algorithms for tracking the demand from sales orders, customer forecasts, safety stock levels, and calculating net-requirements for purchase and manufacturing. MPS also pulls together independent or groups of demands that trace back to the production of intermediate and raw materials to be consumed in different Manufacturing and Packout processes.

Determining the quantities required would depend on the inventory quantity setup of any single item. The requirement could be specific for a static batch size or dynamic quantities based on the demand needs. MPS systems provide planners the capability to either consolidate supplies across multiple demand orders, offering a comprehensive supply and demand management experience, or consider only the net change from the start of a full production run.

03. Lead Times

The ability to define lead times is critical to a master scheduling system. For instance, if a user enters a purchase lead time the system should account for the time it takes to receive raw materials after placing a purchase order.

I. Purchase Lead Times

Purchase lead times for a supplier can be set up based on different factors including

  • Pricing agreements
  • Time in days that a supplier can accommodate
  • Transportation time, and
  • Any other unforeseen coverage settings

Within Dynamics 365 Finance and Supply Chain, a purchase lead time found for a specific supplier and item combinations takes precedence over general settings of an item. This applies when (1) no vendor is assigned to the item, and (2) the Find trade agreements checkbox is selected via Master planning parameters form > Planned orders tab.

II. Production Lead Times

Production lead times are the details that can be configured in coverage settings; however, these values are disregarded when items are produced via routes. Routes, defined in the modern Production control modules, consider available resources (people or equipment) and their working schedule. In this situation, production lead times needed to create finished goods do not have to be specified by a user, as they are calculated automatically.

Planning for the Unknown

There are still unknowns within pharmaceutical production and operations. Without the right system, planners will struggle to retrieve the data needed to better streamline the manufacturing process. To help with this, Production Planners can benefit from valuable information like –

  • Batch production history and patterns of user behavior that show actual production lead times
  • Quality standards of work-in-process production run based on raw materials that are procured from specific suppliers
  • Quantity yields of past batches, actual scrap percentages based on changes in production routes and resources
  • Accurate actual batch costings in comparison with estimates

These additional details provide supplementary insights to help improve production, downtime planning, maintenance, and most importantly, promise dates to customers. Production planners need to be equipped with a system that presents elaborate sets of insights and actionable suggestions on how to plan/schedule production operations. A well reliable tool empowers a company to drive efficiency and growth.

An AI-ML & Analytics Centric Approach

Eventually, and soon, a standard planning system will no longer be capable for the Pharmaceutical supply chain to operate efficiently. Systems that reduce human effort, learn from history, and improve daily operations will become necessary to overcome inefficiencies. At the same time reporting possible issues and roadblocks that impact orders as well as deliveries, improves the overall plan vs actual picture. Production planners are proving to be more efficient when they have real-time and historical analytics available during the planning process to make better decisions while managing inventory and orders. A guided method of operating and reporting through actionable data can make your company a powerhouse within the industry. An intelligent and optimized planning system can help eliminate guesswork for the production planners in build a competitive edge in the market.

Final Thoughts

The supply chain within a pharmaceutical company is only as efficient as the ability of a planner to proactively coordinate supply, demand, and inventory. A robust planning system with an emphasis on analytics and guided user behavior can play a key role in building efficiency and moving shipments out the door, along with meeting the required quality standards.

Xcelpros has designed Microsoft’s offerings to enhance planning for Pharmaceutical, Chemical, or Biotech industries. For more information on Production planning and Scheduling tools within Microsoft – Schedule Demo

Thinking
Unlimited!

There is no box! We believe in the limitless possibilities of human potential powered by technology.

Subscribe Now

Chicago

4580 Weaver Parkway, Suite 202 Warrenville, IL 60555

Phone: 630-869-0901

Bangalore

Plot No.11B, Survey No.40/9, Devasandra Industrial Area 2nd Stage, K.R. Puram Hobli, Bangalore - 560048

Search Services, Industries, Insights, and Products