Nov
12
Process ERP vs. Discrete ERP Differentiation
Filed Under (Software Selection) by Josh Chalifour (see bio)
 

People often ask us “what’s the difference between process and discrete ERP?” We model both systems in such a way that they share many common components, nevertheless process manufacturing industries have unique requirements that differ from discrete manufacturing industries. Here’s a rough overview of the difference.

A quick definition from APICS (The Association for Operations Management) describes discrete manufacturing as “The production of distinct items such as automobiles, appliances, or computers.” Whereas process manufacturing covers “Production that adds value by mixing, separating, forming, and/or performing chemical reactions. It may be done in either batch or continuous mode.” Now let’s look at a few examples.

Think about what your company manufactures. Does it require mixing chemicals? If so, you may need an ERP system that does things like calculate ingredient quantities. If your industry produces the type of product that once made, doesn’t lend itself to being disassembled into its individual components, it’s likely you need to consider a process ERP system. On the other hand if your company assembles products from many component parts, you’ll require discrete manufacturing functionality. In his article, Process Manufacturing Software: a Primer, Joe Strub explains the difference with examples.

“Once you make a can of soda, you cannot return it back to its basic components such as carbonated water, citric acid, potassium benzoate, aspartame, and other ingredients. You cannot put the juice back into the orange. A car or computer, on the other hand, can be disassembled and the parts, to a large extent, can be returned to stock.”

In addition, P.J. Jakovljevic explains other characteristics in product development within a process manufacturing environment, such as the fact that the manufacturing materials may vary in quality or degrade over time, or that process manufacturing is scalable. He states

“… if the formula calls for 1,000 pounds of cake flour, but one only has 500 pounds, one can still bake cakes, just not as many. Conversely, in discrete manufacturing, one missing part means waiting for it before the finished assembly unit can start rolling off the production line.”

We model functionality for manufacturing in discrete or process industries under the following categories.

Discrete Manufacturing Process Manufacturing
Product Costing Formulas/Recipes
Shop Floor Control Process Model (Formulas and Routings)
Field Service and Repairs Process Batch Control and Reporting
Production Planning Conformance Reporting
Project Management Process Manufacturing Costing
Product Data Management (PDM) Material Management
Product/Item Configurator Product Costing
  Shop Floor Control
  Production Planning

If you’re talking about requirements involving bills of material (BOM), listing the component parts for assembly you’d find those covered through the discrete manufacturing categories, whereas if you’re talking about functionality for formulas, recipes, or ingredients, those would tend toward the process manufacturing categories.

To better understand which type of system would fit your environment, you can consider target industries addressed by different process ERP vendors such as Deacom, CDC Ross, and 3i Infotech. Or review some discrete ERP vendors such as Epicor, SAP, and 3i Infotech. That is by no means an exhaustive list, rather it’s only a few example products, certified in TEC’s knowledge bases.

Notice that 3i is listed in each, in fact other products are also available for both industries. The articles that I mentioned above (and below) mention some of the things to take into consideration from vendors with products that will support either industry. It’s important to consider how these vendors adapt their products to the industry’s needs.

Here are a couple more articles on the subject.

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Comments

Dhaval Patel on 15 November, 2007 at 12:11 am #

Hi Josh Chalifour,
First of all, thanks for this blog.
I am erp developer, and also new for the ERP.
So it great improvement in my ERP knowledge


Josh Chalifour on 15 November, 2007 at 8:23 am #

I’m glad it’s useful. Thanks for the comment.


NB Raju on 15 November, 2007 at 11:59 pm #

The information is handy, This will give a rough idea of manufacturing.
This has to go on improving in the context of, day to day improvements in the ERP Technologies,
For example the latest ERP’S got no mention in this blog,
Such as DYNAMICS, FOCUS 6RT, etc.These are a few to mention.Which have hundreds of satisfied clients around the globe.


badar on 19 November, 2007 at 11:36 pm #

want to know the erp implementation methods


par on 19 November, 2007 at 11:47 pm #

as an IT consultant I am intrested in getting some more information about these methods and
try to compare with my actual experiences.


Nagaraju on 21 November, 2007 at 10:29 am #

Dear Sir,

I have knowledge to create the Formula, Routing and recipe in ERP.
Please give the information how to Process Batch Control, Reporting and conformance reporting.


A Macario on 3 December, 2007 at 12:23 pm #

Hi,

Could you comment and explain about:
1. LEAN (from Toyota;
2. “backuflush feature”: is a good thing?

Tks a lot.

Macário.


Josh Chalifour on 3 December, 2007 at 2:17 pm #

Macário for more information about lean manufacturing I’d recommend that you read P.J. Jakovljevic’s article, Lean Manufacturing: A Primer. He explains the concepts and discusses the background in terms of the famous Toyota example. You should also take a look at the web site of the Lean Enterprise Institute. I read the book “Lean Thinking” by Womack and Jones and would strongly recommend it.


Hassanali Rassouli on 6 April, 2008 at 5:20 am #

Dear Sir

Is there any ERP feature list based on APQC (American Productivity and Quality Center) Process Classification Framework

Thank you


Hasan on 7 April, 2008 at 1:17 pm #

A Company manufacturing and packaging tea (Tea blending and packaging) either applies Process Manufacturing or Discrete Manufacturing.

No chemical involved only Tea leaves are blended.


Daniel Piña on 30 May, 2008 at 9:57 am #

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I hope that podamo realize I have already mentioned that a vast area in Chile.

I hope response on the part of you.

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Branislav Djurkovic on 11 June, 2008 at 5:45 am #

Thanks for the interesting blog. My opinion, with 20 years of ERP development and implementation is that differences between process and discrete manufacturing are not significant, from the ERP point of view. All business processes are equal, with some minor particularities. Any well designed ERP should support both types of manufacturing.

I disagree with the stated example with flour and baking. Here, there is no difference at all, if any part from BOM is missing, there’s no way to produce, neither in process or discrete manufacturing. Same applies for quantities, if there is 500 engines available instead of 1000, 500 hundred cars could be assembled… exactly the same like baking cakes from 500 instead of 1000 pounds of flour.

I look forward to hear other opinions,

Branislav


sivaraamakrishnan on 11 June, 2008 at 10:49 am #

Hi

This is good stuff. But as a experienced consultant i stronlgy disagree with the point, which mentions that the final product of a process manufacturing cannot be disassembled, whereas the final output of discrete manufacturing can be disasembled.
Because Foundry industry is a discrete manufacturing industry, where the output (i.e) casting cannot be disassembled to ingredients( coal, steel scraps) etc….


Dr.Aloke Chakravarty on 6 July, 2009 at 1:11 am #

The explanation given is too simplistic. Every ERP need to have facility to assemble and recovery the method and extend would vary from product to product depending on the industry it serves. For example in process industry the waste is recycled and in discrete also it is done. This article to me appeared to be a work of table work. Probably the writer meant to explain the difference between chemical process factory and assembly line operation. Discrete means that every item of production is assembled. There can be operations where you can have combination of process and assembly when the product is made. For example metal processing leading to the final product requiring of assembly. In a noble metal assembly factory the chemicals used are recycled to recover the precious metal.
But I agree that the process of operation will be different for assembly line and process factory
Aloke Chakravarty, MBA,PhD
Dean TIG Business Schools
Calcutta,I


ERP Software on 7 November, 2009 at 7:15 am #

here we are ERP Software developers and solution provider and i like this blog very much.
and very nice work
great


Brad on 1 March, 2010 at 2:02 pm #

This is a great simple way to explain the different manufacturing models.

We deal with this daily - see our product lines:
www.paradigmanalytics.com


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