ERP Software for the Chemical Industry

Traceability, Quality, and Recipe Management with Business Central

Chemical ERP software is a system that brings together all processes of chemical production and distribution businesses, from raw material procurement to shipment, in a single database, including lot-based traceability, hazardous material storage conditions, batch-based quality analysis, recipe management, and cost management. Microsoft defines the tracking of product movements in the chemical and medical supply sectors as a legal requirement and positions Business Central as the core to carry this traceability.

What makes ERP difficult in the chemical industry?

• Batch-based quality: Each production batch must match the Certificate of Analysis (CoA); batch quality may be acceptable or unacceptable depending on the customer.
• Hazardous materials storage: Flammable, corrosive, or temperature-sensitive products should be kept in separate areas.
• High import volume: Since a large portion of raw materials are imported, freight, customs duties, and exchange rate costs directly determine profitability.
• Outsourcing: Steps such as grinding, mixing, and filling can be outsourced.
• Sustainability reporting: Recording emission data is becoming increasingly mandatory for manufacturers exporting to the EU.

What solutions does Business Central offer to the chemical industry?

1. Lot-based traceability and backtracking.

As stated in Microsoft's design documentation, tracing a product's process flow is a legal requirement in the chemical supply business, and Business Central provides an application-wide infrastructure for this traceability. Lot numbers, expiry dates, and package numbers are carried across purchase, production, transfer, and sales documents. With Item Tracing , a batch is traced from its source to its use and from its use back to its source.

2. Quality control and improper batch management.

With Microsoft's Quality Management add-in:

• Automatic auditing is activated during goods receipt, production output, or warehouse movement.
• Periodic checks can be scheduled using the job queue.
• Inspection templates are used that include measurement areas and pass/fail thresholds.
• When the result is "FAIL," the workflow is activated, blocking the lot , moving the product to quarantine storage , applying a negative correction for destruction, or creating a return to the supplier.
• A tracking record is kept for the blocked lot by creating a Lot Number Information Card .

Microsoft's sample configurations include a "block first, unblock if passed" scenario that prevents unchecked material from accidentally entering production.

3. Hazardous material and special storage conditions

In advanced warehouse configuration , warehouse class codes are assigned to products, shelves, and zones. Microsoft documentation gives the example of products in the receiving area being stored as "frozen," "hazardous," or another class. Bin types restrict the use of a bin to specific operations; for example, only QC-type bins can be used for movement. When directed placement and picking are enabled, the system also considers bin capacity and weight constraints.

4. Prescription, phantom prescription, and waste.

The production bill of materials (BOM) components, route operations, and work/machine centers define capacity. When intermediate mixes are established as phantom recipes , they are automatically broken down into their sub-components when a production order is opened. Consumption, out