Manufacturing Is Different#
Manufacturing ERP selection is more complex than general ERP selection. Manufacturing operations have specific requirements—production planning, shop floor control, quality management, traceability—that general ERP systems may not address adequately.
Discrete vs Process Manufacturing#
Discrete Manufacturing#
Discrete manufacturing produces distinct items—products that can be counted and identified individually.
Examples: Electronics, machinery, vehicles, furniture.
ERP requirements: - Bill of materials (BOM) management for multi-level assemblies - Routings and work instructions - Serial number and lot tracking - Engineering change management - Production scheduling
Process Manufacturing#
Process manufacturing produces products through formulas or recipes.
Examples: Food and beverage, chemicals, pharmaceuticals, cosmetics.
ERP requirements: - Formula/recipe management with percentage-based ingredients - Yield management for production losses - Shelf life and expiration date management - Co-product and by-product handling - Regulatory compliance (HACCP, GMP)
Core Manufacturing Capabilities#
Material Requirements Planning (MRP)#
MRP calculates what materials are needed, in what quantities, and when.
Effective MRP requires: - Accurate BOMs - Inventory accuracy (>95%) - Realistic lead times - Reliable demand forecasts
MRP outputs: - Planned orders for production - Purchase requisitions - Exception messages for attention
Advanced Planning and Scheduling (APS)#
APS extends MRP with finite capacity planning.
APS capabilities: - Capacity-constrained scheduling - What-if scenario analysis - Real-time schedule updates - Optimisation algorithms
Shop Floor Control#
Shop floor control manages the execution of production orders.
Capabilities: - Work order management - Labor tracking - Machine integration - Real-time visibility - Performance metrics (OEE)
Quality Management#
Quality management includes inspection plans, non-conformance tracking, and CAPA management.
Capabilities: - Inspection planning - In-process quality checks - Non-conformance documentation - Corrective/preventive action (CAPA) - Certificate of analysis generation
Traceability Requirements#
Forward Traceability#
Track materials through to finished goods and customers.
Use cases: Recall management, customer inquiries.
Backward Traceability#
Track finished goods back to source materials.
Use cases: Root cause analysis, regulatory compliance.
Full Genealogy#
Complete bidirectional traceability.
Requirements: - Serial/lot tracking at all levels - Transaction history - Integration with production records
Industry-Specific Considerations#
Food and Beverage#
HACCP compliance: Hazard Analysis Critical Control Point documentation.
Allergen management: Identification and control of allergenic ingredients.
Recall capability: Ability to identify and withdraw affected products quickly.
Traceability: Farm-to-fork traceability requirements.
Pharmaceuticals#
GMP compliance: Good Manufacturing Practice requirements.
Validation: Computer system validation (CSV).
Batch record management: Electronic batch records.
Regulatory reporting: Regulatory submission support.
Automotive#
IATF 16949: Automotive quality management standard.
JIT/JIS: Just-in-time and just-in-sequence delivery.
EDI integration: Customer EDI requirements.
PPAP: Production part approval process.
NZ/AU Manufacturing Considerations#
Market Characteristics#
Export orientation: Many NZ/AU manufacturers export significantly.
Supply chain distance: Long lead times from major suppliers.
Market size: Smaller domestic market.
Regulatory Environment#
Food Standards Code: Australia New Zealand Food Standards Code.
Medsafe (NZ): Medicines and medical devices regulation.
TGA (AU): Therapeutic Goods Administration.
Implementation Considerations#
Process Review#
ERP implementation is an opportunity to improve processes:
Standardise: Reduce process variation.
Simplify: Eliminate unnecessary complexity.
Automate: Reduce manual intervention.
Data Preparation#
Manufacturing ERP requires clean data:
BOM accuracy: Verify bills of materials.
Inventory accuracy: Count and reconcile inventory.
Routing accuracy: Validate production routings.
Lead times: Confirm supplier lead times.
Integration#
Manufacturing ERP typically integrates with:
CAD/PLM: Engineering systems.
MES: Manufacturing execution systems.
WMS: Warehouse management systems.
SCM: Supply chain management.
Conclusion: Manufacturing ERP Is Specialised#
Manufacturing ERP selection requires deep understanding of manufacturing processes and specific requirements. Generic ERP systems may not provide the functionality that manufacturing operations need.