How to Select the Right ERP for Chemical Industry

How to Select the Right ERP for Chemical Industry



In this blog, we will be discussing the how to select the right ERP for the chemical industry. But, we believe that when any company, despite industry specifications, is looking at software, they should be looking at the “five factors of success.” These factors combined with a few industry specific tips are the building blocks of our proven formula for success.

Let’s first talk about the five factors of success:

  • Feature Function – this is the foundation of success.
  • Cost – software vendors fall into tiers, which also typically reflect the cost of the vendor. Smaller vendors are more affordable and are usually purchased by mid-market companies, whereas larger vendors are usually purchased by larger companies.
  • Risk – this factor encompasses the company, technology platform, and support
    • Company – the larger the vendor, the more likely they are to be in business in the long run. The worst thing that can happen is when a vendor is purchased by another larger vendor and the ERP system you own no longer receives its original share of development dollars.
    • Technology Platform – when vendors are larger in size, they usually have a larger budget to spend on technology and software upgrades. For example, almost all vendors use MS SQL or Oracle as their databases as they’re some of the bigger programs out there. One distinguishing feature of this software is differences in user interfaces and their ability to be viewed from a browser via the web.
    • Support – typically, We combine two factors: the implementation and the ongoing support. The only way to know for sure who you are buying from is to check references (not of feature function, but of the vendor or partner and their ability to implement). You can buy the best software at the best price from a large company with great technology and still fail in the implementation because the partner you were working with was not able to get your team to implement the software.

Back to feature function – the following are key differentiating features in the chemical industry. All vendors have basic PO’s, CO’s and MO’s. But not all vendors have these features:

  • General
    • Digital document management capabilities within all levels of the ERP System
  • Accounting
    • Ability to track cost changes in the future
    • P&L by product line
  • Customer Service
    • Substitution and Complementary Products
    • Customer Specifications
    • Customer Specifications based ATP
  • Supply Chain
    • Multiple “formulas” possible per item with on-the-floor “drag and drop” routing change capabilities
    • Co-Products and By-Products
    • Scaling production levels based on yields
    • Variable product characteristics (PH, Potency, Grade, Moisture content, etc.) used in a recipe
    • Batch Manufacturing (Mixing, Blending, etc).
    • Variable decimal length by item (some items may require 5+ decimals, others only one)
    • Hazardous Materials Shipping forms by country
    • Ability to use customer supplied materials
  • Formula Management
    • Formulation management with hazardous analysis and ability to create SDS (MSDS) sheets
    • Multiple simultaneous units of measure conversion capabilities (ex. Case-to-Case, Case-to-Gallons, Case-to-Pounds, etc.)
    • Ability to create a formula and solve for a base raw material used in multiple raw materials (Dynamic Formulation)
    • Multiple shelf life (“Use By” Date) levels – (Product, Customer, with Override capabilities)
    • Ability to create samples for customers, track and ship, and as part of a quote

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