It’s been a mixed year for chemical manufacturers.  While end-use markets have recovered to their pre-recession levels, growth beyond that level has been slow.  For many North American firms, exports have been especially weak as markets in Europe have all but disappeared.  There are bright spots, such as the surge in demand for ethylene-based products, driven by burgeoning natural gas capacity.  Still, it’s been a year of eking out profitability wherever it can be found.  One of the strategies many chemical manufacturers are using to improve margins is a renewed focus on business basics, the industry best practices that separate market leaders from the rest of the pack.

Common strategies in emphasizing best practices include process intensification (the merging of two or more production processes), a search for greater supply chain efficiency and a renewed drive to pare overhead even more.  While every business process can yield some additional waste and performance improvement, producers often overlook the benefits to be gained from more effective vendor management and purchasing.

Procurement leaders differ on some of the details of what constitutes purchasing excellence, but several themes recur in almost every vendor management or purchasing excellence initiative.  We’ll discuss some of these initiatives shortly.  The common foundations of purchasing excellence initiatives are better communication, more accurate data at all levels and a focus on enforceable, repeatable processes.  Finding a way to achieve these objectives can be a challenge.  Microsoft Dynamics AX ERP for chemical manufacturers provides these foundations, as well as other tools required to implement best-in-class processes that can give you the competitive advantage you need to sustain and grow margins in an already competitive business.

First we’ll discuss some of the tactics you can use to improve purchasing performance and contribute to stronger margins.  Then we’ll look at how Microsoft Dynamics AX ERP can help you, as a chemical manufacturer, to effectively implement some or all of these approaches in your company.  Read the rest of this entry »

Designed for Microsoft Dynamics AX users, each month Fullscope publishes a short technical tip to for greater insight into this powerful ERP system.

Technical Tip#2: Record Level Security

Microsoft Dynamics AX lets users easily manage screen/table and report filters through record level security. Use this feature to filter screen and report data that you specifically design by user group.

To begin, open the Record Level Security screen (in the Administration module), and choose the appropriate user group. Click on the “new” button and the Record Level Security wizard will walk you through the remaining setup. This feature allows you to apply specific queries to data tables resulting in data security and an enhanced end user experience where the user doesn’t have to filter through irrelevant data. The table queries also apply to report data, which allows you to filter down to critical data.

Companies in pharmaceutical and life sciences manufacturing share a technology requirement for a strong enterprise resource planning (ERP) system to enforce the common principles of validation projects. The goal of these validation projects is to demonstrate consistent, secure and traceable transactions for any product throughout all stages of its lifecycle. By examining three key pillars of applications validation, the importance of the underlying ERP system becomes evident.

Consistent Processes: Life sciences and pharmaceutical companies depend on ERP systems to help maintain consistent and repeatable quality. First and foremost, the recipes (the formula or bill or material [BOMs] and the routings) must be approved and locked into place so that when production is launched, only the authorized recipe is issued. These recipes are tied to specific documents called “operations procedures” which outline the specific materials, quantities and processes necessary to make a consistent quality product. The recipes require valid quality control testing with operational tie-ins to ensure an intermediate meets the specifications before it moves to the next operation. Any raw material, intermediate or finished product that is tested and falls outside of the pre-defined specification must immediately generate a non-conformance alert that is sent to internal stakeholders. An authorized formula, tied to its approved operations document, tied to an internal quality management application, is the first step to maintaining consistent processes.

Secure Processes: The CFR Part 11 compliance code addresses security.  ERP applications help support security requirements by applying electronic signatures to insure authorization for certain business process steps. For example, many life sciences companies lock down their formulas or BOMs in order to comply; and in most cases, authorized individuals can look and review formulas, but not change them. Electronic signatures can add another level of password requirement, so if someone tries to change or update a formula, a pop-up window requests an additional password. Electronic signatures frequently are used with formulas, BOMs, routings, quality specifications, and operations procedure documents.

Traceability:  The final pillar of control is the ability to track all components of the product from its raw material purchase through work in process to the final customer ship-to location. Many pharmaceutical manufacturers have co- and by-product issues, and some split and merge lots during the production process. It is essential for an ERP application in companies with highly regulated environments to manage both discrete (medical device manufacturing), as well as process (pharmaceutical and life sciences manufacturing) production requirements.