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SAP Business One for the Chemical Industry: 5 Talking Points

Challenges in the Chemical Industry

The chemical industry faces several challenges today. 

The first is adhering to stringent safety standards and government regulations, which requires continuous, cyclical R&D. This leads to high utilization of time and resources, all of which leads to high costs of power and fuel. This translates to heavy operational costs, high plant maintenance, and logistical costs. 

Additionally, with complex workflows and systems, knowledge sharing and access to pertinent information are limited. Multiple departments use different applications and databases, making collaboration difficult. Therefore, chemical companies need to ensure different departments are integrated across the company. 

With strict compliance regulations, fierce competition, and soaring customer expectations SMEs need to act smart. The best way to go about this is to diminish inventory management costs and optimize lead times. 

SAP Business One offers industry-specific, integrated IT solutions for chemical companies with support at every step of the value chain. This allows end-to-end processes to be transparent, compliant, and cost-effective. 

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SAP Business One oversees the breadth of business operations ranging from the acquisition of raw materials to the optimal distribution of products. With real-time insights, SAP Business One allows for informed decision-making to flourish in a changing landscape.

SAP HANA is an in-memory database optimized for both transactional and analytical workloads. As the transactional volume increases with growth, the database needs to be fast with business expansion. As an SME, it is critical to maintaining an agile system, especially when working with large amounts of data.

Benefits of SAP Business One  in Chemical Industry

1. Supply chain management

Managing suppliers and acquisition of supplies is by itself a full-time gig, particularly for SMEs. This leaves very little time to track input costs and stock levels. In today’s landscape, it is essential to manage multiple currencies, exchange rates, and taxation laws to understand the actual cost of an item and streamline the procurement process.

By streamlining the end-to-end process, including the management of production dates and priorities, SAP Business One helps to monitor stock and manufacturing orders, offering alternate resource suggestions across the operation as and when required.

With SAP HANA, backward, forward, batch, and quality traceability enables effective tracking of all products.

2. Production management 

It is crucial that production aligns with demand to minimize inventory levels. This makes batch management and quality imperative while ensuring customer expectations are met. SAP Business One enables real-time tracking along the entire production process. 

A detailed Bill of Materials (BOM) improves the speed, accuracy, and cost-effectiveness of the operation. Therefore, SAP Business One provides ready access to percentage weight-based BOMs in multiple units alongside the yield planning and analysis estimations.

With its end-to-end visibility, SAP Business One records data modifications, production, and quality control data. This includes testing, acceptance, and release steps. Additionally, SAP Business one ensures all quality, safety, and compliance requirements are met based on the needs of the industry. 

SAP Business One and SAP HANA simplify tracking byproducts and coproducts, yield, waste-age, shelf life, expiry date, FIFO, and LIFO.

3. Business insight 

Chemical industries are required to create products from raw materials making effective cost management critical. SAP Business One simplifies the management of the production processes and costs through real-time data. This helps in adhering to increasingly stringent compliance and industry regulations.

Real-time data into all aspects of the business operation provides unparalleled actionable insight into the business. This provides a structure to understand margins, sales performance, and the ROI on the plant and other fixed costs. 

Real-time knowledge allows decision-makers to streamline the process, prepare for eventualities, and mitigate problems through anticipatory measures. Actionable insights go a long way in enhancing performance and driving profit.

SAP HANA features allow for recording data modifications, production, and quality control data that include test, acceptance, and release.

4. Quality Control

Systematized testing and reporting helps in pinpointing the weak links of the quality control processes. This includes complex testing details, generating reports and analyses, and managing the results. SAP Business One’s alert function notifies users if tests are required at any stage and identifies non-conforming materials reports and certificates of analysis. 

Moreover, batch control is fundamental to maintaining quality and compliance in the chemical industry. Batch management comprises all processes ranging from procurement of raw materials to final delivery of goods to the customer. SAP Business One allows you to track the origin of the materials in your plant, their movement through your operational system, and sales. This provides for complete control over the quality, customer service, and recalls. With customizable batch and serial number generation, shelf-life management, and batch genealogy trees the journey of the stock from production to sales is accomplished with complete visibility into complex product relationships. 

SAP HANA supports Good Manufacturing Practice (GMP) requirements by meeting all quality, safety, and compliance requirements based on industry guidelines.

5. Production Capacity

SAP Business One helps enhance the authenticity of data, optimize resource usage, and examine product information for decision-making.  This is achieved by categorizing products and inventory groupings, defining physical and chemical characteristics, and managing package volumes. This allows maximized usage and minimal waste leading to yield based on demand.

SAP Business One helps in tracking the finished goods and their by-products, yield, waste-age, shelf life, expiry date, FIFO, and FEFO, taking complete control of the inventory and stock. This allows plant capacity to be regulated for unexpected changes in demand to save time, cost, and resources. 

Additionally, production capacity depends on the equipment. SAP Business One and SAP HANA allow you to track all production equipment status and provide intimation regarding maintenance and repairs. This leads to cost-efficient and optimized production processes


While the chemical industry has been growing rapidly, maintaining relevance in a digital landscape requires digitization and automation. An ERP, like SAP Business One, is helpful in this regard as it helps SMEs become future-ready by building business resilience irrespective of which sector of the chemicals industry it functions within. Moreover, it integrates various business processes to ensure streamlined and agile operations and centralizes disparate data to provide thorough visibility and flexibility. 

SAP HANA’s in-memory technology allows the system to process data, run reports, and analyze records significantly faster. This makes running real-time reports and complete day-to-day tasks highly efficient through features unique to SAP Business One HANA.

About Akshay Software Technologies Limited

Founded in 1987 and based in Mumbai, India, Akshay Software Technologies Limited is one of the leading SAP Business One Silver Partners that provides SAP Business One ERP Consulting, Implementation, Support, and License resale. With the experience and the expertise to successfully power the digital transformations of SMEs across various industries, Akshay Software is committed to helping businesses leverage the opportunities of the future.

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