ERP Software Selection Considerations for Plastic & Rubber Product Manufacturers
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ERP Software Selection Considerations for Plastic & Rubber Product Manufacturers

Raw Materials

It may surprise some people to learn that both plastic and rubber originated from naturally-occurring materials. In fact, gutta-percha, shellac, and the horns of animals were all used as plastic material before the first synthetic plastics were produced.

Gutta-percha is derived from the sap of certain trees, and shellac is made from the secretions of the tiny lac insect. Animal horns were also used to make plastics after the horn was boiled and soaked in an alkaline solution.

Further about 40% of rubber used today is natural rubber harvested as latex from a variety of trees such as the Pará rubber tree in a process similar to that of tapping trees to make maple syrup. Latex is a milky fluid which is also found in 10 percent of all flowering plants such as the common dandelion and milkweed.

The process of cultivating and harvesting naturally-occurring raw materials for plastic and rubber production is not dissimilar to the process of harvesting fruit and vegetables in agricultural and farming industries.

Companies engaged in these early stages of harvesting natural ingredients for rubber and plastics commonly use ERP software designed for the farming and agricultural industry.

These systems include specialized capabilities to manage their land and crops; irrigation, fertilization, and care for their trees; planting of new trees; and cultivation of the harvest.

Larger producers typically use ERP software from Oracle or SAP while smaller producers will typically use general midmarket ERP solutions such as Sage X3, Sage 100cloud, or Epicor ERP with add-on modules, small modifications, or integration to specialized third party operational systems to handle their unique agricultural requirements.

Synthetic Raw Materials

The source for the majority of plastic and rubber products today is petroleum as it may be refined into various raw materials through a variety of processes to convert raw crude oil into the basic plastic and rubber materials used by manufacturers today.

The first synthetic plastics were made from cellulose plant material. In 1869, John Wesley Hyatt, an American printer and inventor, found that cellulose nitrate could be used as a substitute for ivory. The mixture could be plasticized with the addition of camphor.

Celluloid, as this new material was called, became the only plastic of commercial importance for 30 years. It wasn’t until 1951 when chemists at the Phillips Petroleum Company discovered that plastic could be made from petroleum creating polypropylene and polyethylene which are used in the vast majority of plastic products manufactured today.

Synthetic rubber is made by polymerization of petroleum-based products. Gustave Bouchardat created one form of synthetic rubber in 1879 producing a polymer of isoprene. In 1909, Fritz Hofmann working with the Bayer laboratory succeeded in polymerizing methyl isoprene creating the first synthetic rubber.
Transforming petroleum to plastic or rubber takes several steps through a complex process as the petroleum is transformed at a refinery into multiple products including motor oil, gasoline, and products used in later in plastic and rubber processing.

A by-product of the refining process creates ethane and propane which can be transformed into ethylene and propylene using high-temperature furnaces. From here, either material is combined with one of many popular catalysts such as titanium chloride, a special catalyst prepared with chromium oxide and silica, or other types of catalysts. The results of this process are a fluffy, powdered material resembling laundry detergent used to make plastics.

Catalysts are then combined with additives in a blender and typically fed into an extruder where it is melted into a raw plastic which then proceeds to a machine that cuts it into small pellets. Pellets are shipped to customers where they are used in various manufacturing processes such as extrusion, injection molding, and blow molding.

The most prevalent synthetic rubbers are styrene-butadiene rubbers (SBR) derived from copolymerization (combination of multiple rubber raw materials) typically from styrene and a particular type of butadiene. The process used to manufacture synthetic rubber and the type and quantity of additives used have a tremendous impact on the physical properties of the finished rubber product including its durability and elasticity.

Most companies engaged in the production of plastic resins and rubber use process ERP systems like Sage ERP X3. Process manufacturing systems are vastly different than ERP software designed for discrete industries. For example, chemical properties of the raw materials and the actual process of manufacturing these into the finished product must be carefully controlled or the desired product will not result from the manufacturing process.

The purity and chemical composition of the raw materials is vital to formulation of the product and the environment conditions such as temperature, humidity, and other factors play an equally important role in the process. As such, systems like Sage ERP X3 are desired as they allow process manufacturers to track chemical properties of raw materials in inventory and provide quality control functionality to test materials. Much of the products manufactured from rubber and plastic products are tracked by lot number to identify the specific characteristics of the product traceable down to the characteristics of the raw material lots as well as the manufacturing processes utilized in their production.

Further, process manufacturers may add different quantities of raw materials to change the chemical composition of the finished goods they are making. These quantities are dependent on the properties of other raw materials and additives used in the process. This is very different than simply tracking discrete operations where raw materials are cut, formed, assembled, or otherwise transformed into common discrete products such as furniture or metal shelving.

Manufacturing Processes

Extrusion Molding is the primary process used to form plastics and some rubber products whereby the material is heated and forced through a die to form it into a shape. This is similar to the process you used as a child when you forced Play-Doh through a hole.

The product is then cooled under fans or in water where it hardens. The long rods, tubes, sheets, or other shapes of the product are then cut into the desired lengths and/or widths and either stacked, coiled, or rolled for storage.

In some extrusion processes, plastic fibers are made by forcing the plastic through very small holes producing fine threads from which plastic fabrics can be made through traditional weaving processes.

Injection Molding is another popular process where plastic or rubber compounds are heated and squirted into a mold under great pressure where it hardens fast. When the mold is opened, the part is removed. This process can be manual or often automated and repeated to create large quantities of product. Injection molding is common in producing a wide variety of products including plastic handles, cups, trays, mats, and even chairs and larger products and parts.

Blow Molding is a process used to form plastic containers such as bottles or bags and flexible rubber tubing and hoses. This is very similar to the process of blowing a bubble where the air pressure forces the plastic material outward into a hollow mold forming the finished product.

Some plastic and rubber products are manufactured using a combination of processes. For example, plastic films and sheets such as plastic bags or plastic wrap can be manufactured through a combination of extrusion and blow molding. Sometimes plastic sheeting is rolled through a calendar or rollers similar to the way many metal products are rolled to a desired thickness. This process makes the product smooth and often removes small imperfections.

Some manufacturers fabricate products from plastic and rubber raw materials similar to the way that metal fabricators convert bar stock to finished products or the way that furniture manufacturers shape wood into finished goods. In these cases, the business can likely utilize a discrete manufacturing ERP system since the manufacturing process requires significantly less process manufacturing features.

There are specific ERP systems such as DTR Plastics ERP by Aptean or IQMS ERP for Plastics that are designed for companies that manufacture products from rubber and plastic raw materials. These systems offer highly specialized features such as tracking byproducts and the number of times that scrap material is reused in the production of new product; scheduling production based on the color of the finished good being manufactured to reduce the amount of time spent cleaning dies and molds (schedule lighter products before darker products); or tracking of costs and materials used in the production of co-products where more than one unique part is produced in a specific manufacturing operation (such as producing a left part and right part from a single mold).

While ERP software designed specifically for the plastic and rubber industry may be attractive due to many of their industry-specific features, most of these systems offer very weak financial modules, are difficult to modify or to integrate to other systems, have limited third party solutions to add-on to the core product, and are implemented and supported only by the publisher directly leaving companies with few service options when the publisher has limited implementation and training resources available.

Many companies utilize ERP products such as Syspro, Sage ERP X3, and Epicor ERP which handle the majority of their industry-specific requirements but also offer a stronger financial system, broader tools for modification and integration, and are sold through a reseller channel providing them with more service options. This makes sense when you think about it rationally.

A software publisher selling to a small niche industry will focus on the common needs of their user community. In the case of publishers that specialize in plastics and rubber – the commonality is their customer’s manufacturing processes, not their financial or technical requirements. Software publishers that focus on a broader industry tend to focus on the needs of their diverse customers which have greater needs in financial reporting and accounting as well as technical needs to extend their business systems with third party modules and integrated solutions.

Some companies who work with rubber and plastic materials are mixed-mode – meaning that they have needs that resemble both process and discrete manufacturing industries. For example, a company that makes plastic containers used for food storage will likely have very specific requirements to track product quality as any material that comes into contact with food products is highly regulated and controlled. Further the process of making these products is dependent on temperature and other factors that lend themselves to a process manufacturing solution. However, the manufacturing process itself produces discrete finished goods which often have other, upstream manufacturing operations that are more discrete in nature than process.

Only a handful of ERP systems like Syspro and Sage ERP X3 are available today for midmarket businesses that need to manage both process and discrete manufacturing operations in a single system.

Types of Products

Rubber and plastic manufacturers make a variety of products that we rely on every day. These include the tires we put on our cars to the flip-flops we wear to the beach. The process of manufacturing rubber belts can be vastly different than manufacturing rubber gaskets and the way that companies make plastic bottles is very different than manufacturing plastic film and sheeting.

Industry Compliance

To complicate matters further, the end-use of the product also has its own set of unique requirements. For example, manufacturing plastic barrels for the food and beverage industry come with strict FDA regulations while manufacturing similar barrels for transporting chemicals or other products may not be regulated at all. Further, many rubber and plastic parts are used on automobiles which often require companies to comply with quality assurance standards set forth by industry groups such as the Automotive Industry Action Group (AIAG) and products used on airplanes or in the nuclear industry have altogether different regulations.

ERP Software Industry

The ERP software market is still highly fragmented despite years of consolidation by industry leaders. Larger companies still rely on tier one solutions primarily from Oracle and SAP.

In the midmarket, only a handful of niche ERP products are still available for rubber and plastics manufacturers and most of these have been acquired by VC-funded companies like Aptean to capitalize on the installed base of customers with little or insignificant investment into further research and development for the products.

Conversely, midmarket stalwarts like Sage, Microsoft, and Epicor invest heavily in their core ERP business applications extending their solutions to new technologies such as HTML 5 while introducing new applications for social and mobile businesses. Further, these midmarket solutions attract third party product developers who build extended vertical solutions within the product framework or integrate their solutions to work with the core ERP system. For example, third party add-ons for Sage ERP X3 exist for manufacturing execution systems (MES) shop floor control, transportation management, preventative maintenance, product lifecycle management, production scheduling, and even a complete vertical industry solution specifically designed for the mining, oil, and gas industry.

Conclusion

Not all ERP systems are alike and the needs of rubber and plastic manufacturers varies widely depending on different stages in the supply chain, the nature of the products they make, and specific requirements and regulations for the intended use of the products by industry. Many companies can utilize discrete manufacturing ERP systems like Epicor ERP or Sage 100cloud while others that require mixed-mode or process manufacturing capabilities are best-suited with systems like Sage ERP X3 that are better suited to their unique needs.

When evaluating ERP software for rubber and plastic industries, it is important to consider your unique business requirements and to evaluate ERP systems that meet the majority of your critical needs while paying close attention to secondary needs, strength of the underlying technology and accounting system, and ability to integrate or add-on to the product with best-in-class software for extended functionality.

At the end of the day, your success lies in your ability to select an appropriate product but more importantly, in your choice of a technology provider who understands your needs and can effectively implement the system. Selecting the right product is only a small part of the equation and many companies have failed in their ERP implementations by utilizing a consultant that has little experience in their industry and limited knowledge of the product.

e2b teknologies represents several ERP business applications including Sage 100cloud, and Epicor ERP offering plastics and rubber manufacturers a choice of systems that each have their own strengths and weaknesses depending on the needs of rubber and plastic products manufacturers. All of these ERP systems have a solid accounting and technical foundation supported by a large number of software consultants and third party application developers to extend the core business application.

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