Why chemical businesses should choose an industry-specific ERP

Categories: Chemicals, ERP
September 18, 2018
Chemical worker wearing protective clothing.

Chemical manufacturers can use industry-specific ERP tools to drive productivity and profit.

What does your chemical company need to drive innovation, spur collaboration, and maximize production?

For many in the chemical industry, enterprise resource planning (ERP) tools provide transformational opportunities to bring systems and people together in new ways. However, if you’re a chemical company, using a generic ERP system could cause more headaches.

Instead, companies should focus on ERP solutions that are designed for your industry, with features that address specific needs and complexities of working in the chemical industry today.

Here is a closer look why chemical businesses should choose an industry-specific ERP.

ERP 101

An enterprise resource planning system provides your company with a dynamic technology solution that allows for integration across the enterprise and the supply chain. With ERP tools, companies can better collaborate both internally and with partners to maximize efficiency and discover new solutions.

While the components vary from system to system, most ERP solutions integrate some combination of accounting, finance, human resources, sales and marketing, production, R & D, customer relationship management and procurement systems. ERPs allow for better automation of processes, transparency of information, and real-time decision-making.

ERP solutions have been available for several decades, but are more critical today, given the rise of global competition, the use of disruptive technologies to change business models and practices, and customer expectations for rapid turnaround and introduction of newly sought products.

Industry solutions needed

You need an industry solution that addresses key issues inherent to the field. Going with a generic solution risks not having critical features that are intrinsic to chemical manufacturing. This means your company will end up with expensive customizations or work-arounds to ensure that you are compliant and competitive. Often these work-arounds are suboptimal, depriving your company of the functionality it needs.  Those costs are unnecessary when you select a solution that is designed and implemented specifically for chemical companies.

Industry-specific ERP solutions have grown in popularity in recent years. ERP makers now create solutions designed with the industry needs addressed up front, eliminating or greatly reducing the need for customization work.

In many cases, manufacturers work with solution providers that know the terminology, needs, business procedures, and compliance issues specific to an industry such as chemical manufacturing. These solution providers understand the ERP marketplace and allow for better selection, installation and training processes. Your company saves time and money it would have spent exploring solutions, evaluating vendors and understanding productions and functionality.

Among the key needs are:

Regulatory Compliance.

Most chemical companies are heavily regulated. You want a solution that has tools that allow for better compliance, both throughout the manufacturing process and in the reporting and audit management processes.

You need a solution that responds to domestic and international regulatory demands, including those from multiple agencies. For each regulatory mandate, you need a system that automates tasks and the collection of data to ensure you remain in compliance. Whether its compliance with the Globally Harmonized System of Classification and Labelling of Chemicals or agency-specific requirements, having the right tools in place can alleviate reporting complexity and reduce the risk of fines.


Customers depend on accuracy in the products you make. Maintaining consistency and accuracy in formulas, batches and properties is essential to ensure you’re making and delivering the right products. Accuracy and precision in manufacturing also results in fewer errors in processing, less waste, and less downgrading of products.

Supply Chain Management

In the chemical industry, you need accurate and on-time availability of materials. Knowing what is happening within the supply chain, including communicating with partners, vendors, suppliers and transporters. With a high-level view of your supply chain, you’ll be able to make better decisions faster.

Cost Savings

With heated competition in the industry, companies need to find ways to reduce production costs, logistics and transportation costs. Using the integrated functionality within an ERP, driving off of a single source of data, allows companies to create greater efficiencies and reduce costs.

Chemical worker with protective clothing.

Chemical production needs tools to monitor supplies, formulas, and quality to remain compliant.

Needed functions

As you begin to consider an industry-specific ERP solution, you should look for a vendor that offers the products with features that address regulatory, production and supply chain matters. Here are some of the key functionalities that your enterprise resource planning software should offer:

  • Formulation Management. Formulation begins with R&D, allowing for formula management and tracking. Formulation practices provide for accurate batch development with accurate measurements by volume, weight and percentage. Accurate formulation calculations are critical to improved batch quality and consistency.
  • Chemical Property Management. Be sure that your system tracks each chemical’s composition, characteristics, shelf life, potency and reactions with attribute management tools.
  • Supply Optimization. Your ERP solution should allow you respond to rapidly changing demands and respond better to variances in purchasing, production or shipping.
  • Recipe Management. Like other process manufacturers, you want a system in place that allows for accurate recipe tracking, management and reporting. For the unique needs of a chemical manufacturer, choose an ERP that has the functionality to manage your product formulations and allows for rapid tracking, editing and analysis.
  • Quality Control. For regulators and customers alike, you need processes throughout the manufacturing process that ensure quality standards are met. With the right system tools, you can ensure that raw materials and finished products meet both internal standards and regulatory requirements. Tracking data allows you to monitor trends, identify vendors or suppliers, and address issues quickly. Automation tools allow for samples to be pulled, analyzed and documented. Quality control tools also allow for better customer relations, brand reputation and workplace safety.
  • Cost Analysis. The chemical industry is a highly dynamic field, with market fluctuations causing changes in prices and availability regularly. To manage your expenses and pricing, you need an ERP that can monitor and anticipate market conditions, allowing you to act quickly to acquire needed materials and set optimal prices for your products.
  • Measurement Conversions. Effortlessly convert and track measurements across systems automatically.
  • Supply Management.  As markets and prices fluctuate, you can find yourself with too much inventory or short on needed materials. An ERP allows you to better manage inventory, resulting in less waste and overstock of the ingredients necessary for optimized and efficient production scheduling. An ERP can make sure you have the right ingredients in the right quantities when you need them in your facility.
  • Shelf-Life Management. With hundreds or thousands of raw materials in your possession, you need tools that track your inventory and optimize usage. Expiration date controls ensure that your supplies are optimized and waste is reduced.
  • Forecasting. Whether you have multiple warehouses and production locations or single sites, you need tools that allow you to monitor existing inventory and forecast future needs. Many ERP solutions come with easy-to-read graphical representations of inventory levels that allow for better planning of replenishments.
  • Accessibility. You want a solution that allows your employees to access data, controls and other functionalities from any device, anywhere. Your ERP should allow easy access regardless of operating system or mobile tool. ERP tools should allow you to access intuitive web-based interfaces to access data, run reports and make adjustments.
  • Lot Traceability. In the face of public and regulatory scrutiny, companies need a solution that rapidly allows for the management of recalls. Lot management also allows for better labeling and expiration management. In the case of a recall, your ERP tools should allow for the rapid identification of sources, batches and scope, allowing for better and faster responses.
  • Co-Products and By-Products. It’s inevitable that there will be co-products and by-products to your chemical manufacturing processes. Your ERP should be able to track these products and allow for the proper labeling and pricing.
  • Comparative Manufacturing. As a process manufacturer, you need to understand variations in the process. Automated tools can track and record actual versus anticipated yields, planned inputs versus planned outputs, providing you with the clarity you need to make adjustments in continuous flow manufacturing.
  • System Monitoring. Eliminate time-consuming and costly manual processes to monitor systems with automated tools that allow you to measure and track performance. On-demand reporting can provide senior leaders and other decision-makers with tools they need to better analyze performance, understand and address inefficiencies, and optimize systems.
  • Compliance. Your ERP should have cross-functional features that allow for compliance with multiple regulatory guidelines. You need a tool that allows for automated reporting and audit trail management.
  • Safety. Ensure that employees are safe and informed of the materials with which they are working by tracking Safety Data Sheets within your ERP and making them accessible to all users.

A partner with chemical industry expertise

To provide leaders with the information they need, NexTec partners with the top providers of chemical ERP solutions. Our experienced consultants work closely with our clients to understand their needs, budgets, and processes.

With extensive knowledge of the vendors, products and features, NexTec helps chemical companies identify the ideal ERP solution that meets needs now and in the future. We help ensure that selection and implementation are seamless and efficient, allowing your teams to leverage the capabilities quickly.

Contact us to learn how NexTec can help your chemical manufacturing company find the right industry-specific solution.