Process, Discrete and Mixed Mode Manufacturing; 3 business issues – 3 Dynamic Solutions

One part of my job requires that I understand the difference between process and discrete manufacturing and be able to provide the best solution for each industry and processes. Most people have no idea these type of manufacturers are very different. Process manufacturers are building something that can not be taken apart, i.e., a bucket of margarita mix or a jar of peanut butter. Technically you can take the mix out of the container and reuse the container, but you can’t take the peanuts out of the butter or the sugar out of the lime powder. This makes process manufacturers ‘process’ or formula based. Discrete manufacturers are making a widget that may have screws, nuts, handles, etc. that can be taken apart and sold as a part or used on something else if need be. If your company manufactures using both process and discrete manufacturing then you may be familiar with this industry term; mixed mode manufacturing.

These differences only are the beginning of a long list of incompatibilities that process and discrete manufacturers have to deal with daily. Granted some of the issues are the same; all need a general ledger, accounts payable, accounts receivable, bank reconciliation, sales order, purchase order, and other distribution type features. However, in nearly every company I have encountered, these two types of manufacturing companies have very distinct inventory and bill of material needs. Process manufacturers require formulas/recipes, containers and labels for their bill of materials. They need pounds, gallons, ounces, liters, milliliters, grams, etc. Discrete manufacturers need eaches, perhaps lengths of material too such as like wire in a roll and/or by the foot. Most discrete software packages do not understand a conversion of pounds to gallons, or a liter to an ounce and nor are they able to use this same conversion factor on a bill of material.

Needless to say most software packages do not handle process and discrete manufacturing processes both well at all. I get very frustrated with other vendors that try to or do sell a discrete manufacturing software package to a process manufacturer. The customer invariably has had to change their processes to fit the software and usually have a major customization to boot. Even so, the customer is not happy and neither are their customers! The good news is that there really are packages that can handle both process and discrete manufacturing.

All of us have had to also deal with food recalls at some point; check your cookie dough, peanut butter or spinach lot numbers lately? Food and beverage companies have to be able to report lot numbers from their vendor raw materials to what they ship as the lot on a finished good.

Lot tractability and reporting is a key factor in determining if a software package is right for these industries. They also have many other requirements mandated by the FDA, such as the FDA must be given advance notice on shipments of imported food as well as label and health claims. Companies that process meat from the cow or pig to the finished good could have issues with catch weights too. Catch weights refer to the actual weight of variable-weight items that use weight as the sales unit of measure.

Chemical companies have to deal with lot traceability for product pigments and/or hazardous material tracking, viscosity issues, material safety data sheet (MSDS) reporting, to name a few. Cosmetic producers also deal with the FDA and have a combination of issues that Food and Chemical companies contend with daily.

Granted, discrete manufactures often deal with serial numbers, at least in most cases there is only one serial number per part. In the case of the process manufacturer there may be numerous lot numbers in a finished good that must be tracked.

After years of representing a Sage product for process manufacturing, a couple of years ago Custom Information Services recognized the need to find a more long term solution for our customers and prospects. I completed months of research and made the recommendation of Dynamics GP for core accounting, distribution and discrete manufacturing. For mixed mode manufacturers, we have Dynamics GP and Horizon’s Manufacturing . For process manufacturing; Dynamics GP with Vicinity Manufacturing.

I have discussed a few of the issues manufacturers have to deal with, there are many, many more. I find this industry very exciting to work with. It is fun to learn about new companies and processes and then provide solutions to the business issues and pains.

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