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The Datacor Blog

How to Choose the Right Process Manufacturing MRP Software

May 7, 2020 by Admin

Chemical and process manufacturing is a complex industry, and companies in this market have unique needs. MRP software — short for “material requirements planning,” “material resource planning” or “manufacturing resource planning” software — is a valuable tool for managing the complex processes of planning, scheduling and controlling the production, purchasing and distribution of manufactured goods.

However, choosing the right software can be a difficult process — and the wrong system can cost you. Whether it’s countless hours and thousands of dollars spent on support and implementation issues or problems using functionality that wasn’t designed with your specific needs in mind, you need a system that’s well-integrated, easy to use and customized for your industry. 

In this article, we’ll outline the top considerations for process manufacturers when choosing an MRP system to help you find the right fit. We’ll cover: 

 

What is MRP software?

MRP software provides increased control over manufacturing and business processes by determining what needs to be made, what ingredients need to be bought and when these activities need to happen to meet customer demands. It offers tools for planning, calculating and automating key aspects of purchasing and production. 

In the past, MRP software was offered as a stand-alone product. Early versions of this software were known as MRP I and MRP II, and only supported basic inventory management and accounting features. Today, most buyers purchase MRP software as part of a larger enterprise resource planning (ERP) software suite. These systems are much more robust, offering a range of comprehensive, integrated modules for business management, customer relationship management (CRM), plant maintenance and more.

Choosing the right material resource planning software vendor

Today’s material resource planning software brings big benefits for manufacturing companies. When used as part of a comprehensive ERP system, this software streamlines and automates key processes and business functions, facilitating communication between departments and offering a holistic view of the company. However, purchasing and implementing one of these systems also involves a big investment in time and money. It’s important to carefully consider all your options in terms of the vendor and solution before embarking upon this journey. 

When evaluating potential MRP software vendors, these tips can help you choose the right one:

Thoroughly vet their history, background and reputation. Anyone with a computer and programming skills can start a software company; keeping one in business over the long term is much harder. Do a deep dive into the history of each potential vendor, asking questions such as:

  • How many times has the company been bought and sold? 
  • Are there many tenured employees, or is turnover frequent?
  • Has the vendor ever gone bankrupt?
  • Do they develop their own software, or are they a reseller?
  • How do they support their customers and the platform?

You’re looking for a system with a long and stable history in terms of leadership, staff and financial standing. It’s also recommended that you choose a vendor who develops their own software, so you can go directly to the source if you run into any issues. Ensure the one you choose also offers dedicated, in-house support and regular updates.

Talk to their customers. The best way to find out how well the software will work for you is to implement it. However, since this is the vetting stage, the next best thing is to find a company almost identical to yours that is successfully using the software. If they make the same products, sell to the same customers and operate within the same industry as you do, and the software is working for them, it’s likely to work for you, too. 

Find relevant customer references in your industry and talk to them about the software’s implementation, usage and support processes. One great measurement of success is how long the company has been using the software; if it’s only been a few months, unforeseen problems could still arise, but if they’ve been using it successfully for years, then it’s probably reliable. 

If you can find a vendor that has dozens or even hundreds of relevant, long-term customer success stories, that will be the best fit of all. This serves as proof that the vendor has a positive reputation; their product is viable for users with your specific needs; and it’s well-supported and -updated. Datacor is an example of a vendor with a reputable customer base, with over half of the top 100 chemical distributors in North America using its software.

Bring your data to the demo. Of course, the most important factor is whether the software you choose works with your specific business processes. Most MRP software vendors offer guided product demonstrations where you can see the system’s functionality in action. To verify that it meets your requirements, bring sample transactions and other relevant data to the demo and ask the vendor to show you how their functionality works; for example, ask them to demonstrate automatically emailing a safety data sheet (SDS), certificate of analysis (C of A) and invoice along with each customer order.

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Evaluate their technology. Buying manufacturing resource planning software is a long-term prospect, and the system you choose must be able to grow along with your business. That means the underlying technology — the foundation the system is built on — must be stable, standard and well-supported. For example, if the vendor shows you a solution written in DOS, it’s not going to be a good choice for the future.

Implementation and support for MRP software

Beyond the software itself, when choosing a vendor, you’ll need to gauge the professional services they offer. If a vendor makes a great system, but getting and keeping it up and running is difficult, then they won’t be a good fit for the long term. 

ERP systems are notorious for failed implementation projects, with budgets and timelines that swell way beyond the original scope and involve complex, custom integrations. Choosing integrated ERP software can help you avoid these headaches. These are unified systems that connect all the modules you need, from MRP to accounting to inventory management and CRM, in one out-of-the-box solution — meaning no custom integrations are required. 

To control scope, look for a vendor that quotes implementations on a fixed-bid basis, offering a flat amount for all the installation, training and support your company will need to start using the system. This keeps projects from running over budget, team members from counting hours and everyone focused on a positive outcome. You may also want to talk with the leader of the implementation project to see how much experience they have with companies in your niche. 

Next, look at how the software is developed; are all products and services delivered in house from a single vendor, or do they rely on a partner network to deliver key aspects? Choosing a single-vendor solution is always best, because if anything goes wrong, then only one company bears the responsibility; there is no partner to blame, and the vendor can focus on helping you solve your problem. 

It’s also crucial that support, updates and product development are well-managed. Not only does choosing an integrated ERP system ease implementation, it also streamlines support and updates, since a single vendor is managing every module, feature and process. Look at factors such as whether you have a personal support agent or must contact a generic help desk; if support staff is domestic or overseas; and how support is billed. 

Finally, look at how the vendor develops, validates and delivers product updates and upgrades. Ensure that you’ll always have the latest functionality, patches and bug fixes without disrupting your daily operations. 

Specialized MRP software for process manufacturers

Chemical and process manufacturing is different from other types of manufacturing; it’s not like building furniture or assembling cars. Rather than assembling components from a bill of materials, products are created by formulating, blending and reacting chemicals based on specific formulas and recipes. Generic MRP software that targets discrete manufacturers isn’t designed to handle the complex formulations and calculations involved with accurately planning and executing tasks in this highly specialized industry. 

When choosing MRP software, you need a specialist, not a generalist. Look for a vendor that serves the chemical and process manufacturing industry, offers features designed specifically for this market and has a history of successfully serving companies like yours. For example, Datacor has not only been serving process manufacturers for over 35 years, but developed its software specifically with the needs of chemical and process manufacturers in mind. 

Once again, talking to companies like yours about the software they use is a great way to identify an MRP software specialist. Reach out to companies in your supply chain; friendly competitors; or members of chemical or industry associations you belong to and ask what systems they’re using. By talking to others with your specific pain points, needs and best practices, you can find a vendor whose specialization matches your own. 

Most vendor websites also offer case studies and testimonials of companies that fit their ideal customer profile, so you can see if it aligns with your business. 

Key features of material resource planning software

The biggest differentiation between a generic and specialized MRP software solution is in the features and functionality they offer. ERP systems that include material resource planning software are very complex, offering tens of thousands of features contained within departmental modules. Some of these modules, such as accounting, CRM and business intelligence, come standard in almost all ERP systems; you can learn more about those tools in this post on integrated ERP software

Here, we’ll focus on those features that are unique to the process manufacturing industry. By choosing a system that supports the following functionality, chemical and process manufacturers can best streamline and improve their purchasing and production decisions:

  • Automatic unit conversions. Here’s a scenario that’s probably familiar: You buy products from one supplier by the gallon, and from another by the liter; you store the same item in inventory by the pound; you use it in a formula by the gram; and then you sell it by the case. That’s a lot of calculations to make by hand — unless you use specialized MRP software. The right system can automatically convert various units of measure and packaging into standard base units, ensuring accurate recipes, formulas, inventory and purchasing.
  • Industry-specific regulatory compliance reporting. From the Environmental Protection Agency (EPA) to the Drug Enforcement Agency (DEA) and all the state and local guidelines in between, your business has a lot of government regulations to comply with — and failing to keep up with them can put you out of business. By automating key aspects of regulatory compliance, including collecting, organizing and reporting information, you can avoid fines and penalties while also improving efficiency.
  • Customer product profiles. One of the biggest mistakes to avoid in the chemical industry is shipping a customer the wrong product, since mixing the wrong chemicals can have catastrophic effects. Software with customer product profile functionality virtually eliminates these mistakes. It stores information about previous orders, products and terms for each customer; auto-populates quotes, plans and orders; and triggers alerts if a customer orders a product they haven’t before. These profiles also contain each customer’s unique price for each product, so quotes and invoices stay accurate.
  • Price change management and cost tracking. Prices change frequently in process manufacturing. Specialized MRP software allows you to quickly and easily initiate price change notifications and push them out to customers. It also offers tools for easily tracking and managing material costs for complex recipes and formulas.
  • Cradle-to-grave lot traceability. Full lot control and traceability, recall letters and audit controls are critical for chemical and consumable-goods manufacturers. Cradle-to-grave lot traceability allows you to track raw materials down to the lot number so you can respond quickly in case of a recall or safety incident.
  • Return and deposit tracking. Process manufacturers often sell and ship to customers who use returnable containers, such as totes or reusable drums. Specialized MRP software offers tools to track returns and deposits for these items.
  • Formula-based batch manufacturing. Generic ERP software won’t help you plan manufacturing activities that involve recipes and formulas. Look for a system that can automatically track and adjust for loss factors; byproducts or co-products; rework or off-spec material; quality testing; and packaging by various units of measure.
  • Preventative maintenance. Process manufacturers have equipment and machines that require regular, preventative maintenance; specialized MRP software offers tools for easily planning and scheduling both recurring and as-needed repairs.
  • Real-time inventory management. Accurate, up-to-the-minute inventory is essential for planning and scheduling manufacturing and purchasing activities. Systems with wireless barcoding functionality allow you to update quantities across locations and departments automatically and in real time.

Key considerations for cannabis manufacturers

While all chemical and process manufacturers have specific regulations to adhere to, there are special considerations for companies that produce consumable goods. Cannabis manufacturers, as part of an emerging industry, have even more factors to look out for when choosing a process manufacturing software vendor.

Seed-to-sale lot control and traceability features are critical for tracking raw materials — in this case, hemp or cannabis — through the supply chain. Look for a vendor whose software can create a seed-to-sale tracking document to help guide any necessary recalls.

Most cannabis manufacturers use proprietary formulas that combine a certain percentage of hemp, CBD or cannabis concentrate with various fillers, such as oil or melatonin. The right system can automatically calculate and adjust recipes and formulas to ensure the right balance of each filler and raw material, making conversions for units of measure and packaging where necessary.

Cannabis products are also highly regulated, and each state has different requirements to adhere to. Make sure the software you choose complies with state-specific guidelines and reporting requirements for the products you create.

Finally, since cannabis manufacturing is an emerging market, many vendors will not have years of experience serving this niche. However, vendors with deep experience in extraction will offer the necessary depth and breadth of functionality; it’s only the raw material that varies. Datacor, for example, has customers who have been using the software for over two decades to manage and plan manufacturing that involves the extraction of kidney beans, tobacco, berries and other consumable products.

By following the tips in this guide, your business can find the process MRP software solution that works for you. Datacor ERP is a comprehensive manufacturing resource planning system that offers all of the background, expertise, support and functionality we’ve covered here — and it was designed specifically to meet the needs of chemical and process manufacturers like you. Contact an advisor to schedule a free demo and see how Datacor ERP can support, streamline and enhance your manufacturing and purchasing processes. 

Topics: Best Practices, Datacor ERP, MRP, Automation, Manufacturing


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