Challenges in ERP for Manufacturing Batching Plants: A Case Study in Cement and Concrete Production

Challenges in ERP for Manufacturing Batching Plants_ A Case Study in Cement and Concrete Production

1. Introduction to Enterprise Resource Planning (ERP) in Manufacturing

ERP systems typically assist commercial entities in several areas such as production, sales, procurement, inventory management, quality management, maintenance, and financial transactions conducted inside the organisation. Furthermore, ERP methods are utilised to execute tasks such as international sales, roll-out delivery, technical conception, and several others. The unique geometry and performance characteristics of a product are highly important factors to consider when selecting the optimal production technique. However, when we closely examine individual products that are produced, consumed, and customised, we find that they play a crucial role in the market and have a high value in terms of production. In this context, the act of “managing” these products is more about customisation and meeting market demands rather than simply responding to manufacturing needs.

An enterprise resource planning (ERP) system is specifically intended to efficiently and comprehensively manage the information and resources of a whole organisation. In the manufacturing industry, ERP refers to the integration of planning, controlling, and informational management processes into a unified system. An ERP system primarily serves to facilitate a company’s ability to initiate, monitor, and document the whole production and sales process, from order placement to product commercialization. It streamlines production scheduling and enables the collecting of symbolic data.

Currently, there is a growing need for sophisticated automation systems to support environmentally friendly manufacturing operations. Historically, financially well-endowed manufacturing businesses have been the primary users of automated manufacturing systems. Presently, the intense competition in the industrial sector has compelled enterprises to reduce the amount of time it takes to complete orders, lower the amount of inventory they hold, and adjust the quantities of customer orders, all while maintaining cost-effectiveness, high quality, and timely delivery. Therefore, technologies that were formerly exclusive to huge multinational corporations are now considered essential instruments in automation.

1.1 Definition and Purpose of ERP Systems

An ERP system is a cutting-edge business tool designed to provide complete transparency and effortless access to data for users to query, review, or retrieve information throughout the daily operations of a company.  Given that the ERP system aims to integrate all company operations into a single database, the business advantages are likely to be the most significant at the operational level. These benefits include the reduction of inventory and labour expenses, improved accessibility and speed of information, increased automation of tasks, and the adoption of comprehensive business practices. The implementation of these systems in manufacturing is vital due to the interdependence between enterprise and business activities.

ERPs, refer to software applications designed to gather, store, analyse, and provide access to information within an organisation. These systems efficiently connect the internal functions, such as finance, human resources, manufacturing, and circulation, with the exterior functions. The crucial element of these platforms is the database, which stores and shares information throughout all the modules, facilitating the seamless exchange of data. These systems are a proficient strategy for coordinating operations by utilising shared historical data and common procedures. This factor provides speed, efficiency, and accuracy to the procedures. The importance of the ERP software on the enterprise has significantly increased due to the improved management and reporting capabilities.

2. ERP Implementation Challenges in Manufacturing Batching Plants

In recent years, it has become evident that industrial organisations, particularly batching plants, mostly use an Enterprise Resource Planning (ERP) system as the initial measure to enhance their business processes and consolidate their scattered databases into a unified system.

For the past three decades, it has been recommended and extensively studied to have a well-established ERP system across numerous business sectors. Nevertheless, the implementation of an ERP system varies across firms due to unique characteristics that necessitate a tailored approach in terms of work, cost, length, risks, and implementation strategy.

Fundamental and significant industry events, business transactions, financial modules, purchasing and logistics modules, sales and distributions, manufacturing modules, human resources modules, and infrastructure components are the primary planning areas that require integration. As a result, integrating ERP into batching facilities necessitates more investment and meticulous planning. Efficient ERP implementation in this process can enable the organisation to gain a competitive edge and improve its production efficiency.

2.1. Technical Challenges

Companies and their production operations exhibit a distinct and exclusive behaviour pattern. This behaviour pattern is typically replicable when similar operational conditions and control decisions are implemented for the plant to function with normal applications.

To ensure the proper functioning of the Manufacturing Execution Software, it is imperative that the product is a highly durable and secure solution, while also being cost-effective and quick to deploy. They are crucial when the issue involves installing entire systems in new facilities or servers to rival solutions and applications on pre-existing platforms. These measures are typically more prevalent in companies that manufacture long-lasting goods rather than goods with a short shelf life, such as those in the food industry. Nowadays, technologies such as Just-in-Time, warehousing logistics evolution, and agile dispatch and distribution of production overloads are utilised to meet the specific requirements in building and acquire environmentally friendly products for everyday use.

These functions can be enhanced by the implementation of advanced technology and the utilisation of flawless models for process control. The primary technological obstacles encountered in manufacturing organisations, particularly those operating in continuous processes such as cement and concrete batching plants, are as follows: The administration of this particular corporation consistently encounters operational challenges that have the potential to generate disorder within the organisation. Some causes are universal, such as demand management, while others are specific to this field, such as issues related to the seasonality of the business, taking into account weather conditions.

Additional factors contributing to the issue include challenges in determining the optimal combination of products, fluctuating operational circumstances, frequent alterations in raw materials, intricate client connections, the breadth of production activities, and the intricacy of manufacturing execution processes. This complexity can be described by various factors such as failure events, repair events, sensor readings, quantity set points, alert definitions, processing mode, and maintenance mode, among others.

3. Case Study: ERP Challenges in Cement and Concrete Production

The production of cement and concrete necessitates the use and synchronization of several sophisticated technologies and intricate production methods, all while operating within demanding environmental, economic, and human constraints. The cement production industry exemplifies the capital-intensive sector, characterised by lengthy production and business cycles that require meticulous precision in all operations. It is subject to stringent occupational health and safety regulations and has a strong commitment to environmental and community responsibility. The manufacturing and production sectors have created and used complex, interconnected enterprise information system (EIS) platforms that combine previously separate corporate management activities. Enterprises claim that EIS modelling approaches significantly reduce the complexity and lead-time associated with designing, producing, and delivering various product portfolios. Enterprise Resource Planning (ERP) is the most extensive category of enterprise applications.

3.1 Background of the Cement and Concrete Industry

Global economic growth generally positively influences the construction sector, leading to an increase in final production. Manufacturers must therefore take action to prevent a crisis in meeting demand. Currently, developing nations must undertake extensive preparations to address the demands of global economic expansion, urbanization rates, megacities proliferation, and infrastructure requirements. China is strategically investing in infrastructure to expedite economic growth, leveraging its production and development powerhouse status. Countries need rapid urbanisation and infrastructural development to achieve globalisation, enhance competitiveness, and ensure their survival. Producers must enhance their production and marketing strategies to achieve satisfactory sales rates due to rising demand. Meanwhile, end-users must ensure that the quality, quantity, timing, and costs meet their requirements. Enterprise Resource Planning (ERP) is the primary management tool in the construction sector.

The cement and concrete sector play a vital role in the industrial supply chain. Manufacturers then separate cement clinker into two distinct sectors. Cement is a vital component for binding concrete, and discovering more effective methods of transporting concrete can save expenses and enhance earnings for building firms. Consumers in construction value the use of concrete in infrastructure construction due to its cost-effectiveness and the ability to transport it for extended periods daily. Enterprises have invested in expedited curing processes for concrete due to its slow initial strength growth. This has resulted in a 5% surge in demand and has given less strong enterprises a competitive edge in the market. Contractors are critical in coordinating projects in this industry, particularly the establishment of expansive construction sites that rely on cement and concrete. As a result, construction equipment rental centres are also experiencing a surge in demand.

4. Best Practices and Solutions for Overcoming ERP Challenges

Our research examined the business processes of various manufacturing plants, including those in the mechanical and food industries. Common business processes for such manufacturing companies include production planning, warehousing and stock control, sales, customer order management, raw material purchasing and importation control, maintenance, quality control, and financial management. These business processes present shared or analogous challenges in a concrete and cement enterprise. Pre-made or tailored Enterprise Resource Planning (ERP) systems appear to effectively address the operational challenges faced by manufacturing organisations. Nevertheless, factories within the same industry pose distinct issues that differ from those faced by other manufacturing plants.

Concrete and cement facilities typically possess intricate business procedures because of the multitude of products and related business regulations. Common business processes for such organisations include production planning, warehousing and stock control, sales, customer order management, raw material purchase and importation control, maintenance, quality control, and financial management. Developing an information system to properly support these business operations is challenging due to their complex and linked nature.

Customized ERP systems seem to be a favourable choice. However, achieving successful ERP projects necessitates a high level of maturity in system development and deployment methodologies, as well as substantial commitment from senior management.

4.1 Training and Change Management

The research conducted also showed that it is crucial to anticipate practical requirements linked to corporate organisations right from the beginning of ERP installation in the firm. Complex management tools, like other management strategies, are only useful when used by experts, just as older management tools are without advanced technology. The organisation must have the capacity to effectively organise itself, meet user requirements, and satisfy all applicable demands through technical modifications or alternative methods. Thoroughly planned assistance will have a substantial effect on the ultimate result. The data we collected is consistent with the literature, which emphasises the importance of training that focuses on the user’s needs. Neglecting to integrate this technique into a training programme can lead to disarray and dysfunction inside the organisation.

The method of administering training has a significant impact on the ERP system’s efficacy. It is desirable to form a team that can identify the shortcomings of existing approaches, leading to a thorough comprehension and enhanced effectiveness of training in challenging areas. Furthermore, research revealed the need for the company to create an internal document that delineates potential system failures and assesses their impact on daily operations, including the timing of their identification.

As stated earlier, ERP systems bring about significant transformations within the firm. Employees frequently experience anxiety and frustration related to information privacy, alterations in necessary tools for task performance, shifts in job responsibilities, modifications in established procedures and methods, uncertainty regarding future outcomes, and anxiety about potential job termination, particularly among individuals with limited computer training. Occasionally, they articulate the necessity for an external mediator and a direct resolution of certain circumstances that arise during the implementation phase. The departments most impacted by this insufficient training are the operators, purchasing, warehouse, and production managers, as well as level 1 and 2 employees within the organisation.

5. Conclusion

Combining production with inventory management is essential in current manufacturing, especially for batching plants in cement and concrete industries. When production aligns with inventory, efficiency rises, waste decreases, and market demand is met more effectively. Using advanced ERP systems helps manufacturers become more competitive, optimize their operations, and consistently provide quality products quickly and economically.

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