ERP for Chemical Producers: Details that drive operational excellence

In a previous post, How Chemical producers turn ERP into a competitive advantage, we discussed the importance of margin control, and the potential for efficiency gains in the quote-to-cash process.  The conclusion was that an effective ERP toolset is a perfect enabler for many of these changes.

ERP in the chemical distribution and production industry has a number of unique aspects:

• Margin control is key: making sure margins are controlled from quote all the way to cash, and being able to reconcile your P&L with the original sales is instrumental.
• Track & trace: for compliance and audit trail purposes, lot track & trace is essential.
• Legislation: chemical production and distribution organizations have a long tradition of regulation. There are some variations depending on the country, but in general companies have to be ADR, Seveso, REACH, and CLP compliant.
• MSDS: the creation and distribution of Material Safety Data Sheets is a must have.
• Formulas: whether it is blending or reaction chemistry, every company works with formulas
• Integration: communicate supply chain activities electronically with external warehouses

In this post we will zoom into the details and best practices of some of these business requirements and how they should be translated into your IT solution.

Margin Control

To estimate margins as early as possible in the process, it is key that expected costs can be allocated to sales. Landing costs, distribution costs, handling costs can all be estimated. They are not part of the cost of goods sold but influence the gross margin significantly. So being able to allocate these costs upfront, gives you a true ...