Performance measurement for Process Manufacturing vs Discrete Manufacturing

In manufacturing, there are two distinct production processes: Discrete Manufacturing and Process Manufacturing. In essence, the most prevalent difference is how the product is created; and as a result, we should consider changing the way we measure performance for each. In this short blog, we will outline the differences between both and provide insight into why performance should be measured differently.

Discrete Manufacturing

The same products are made identically, typically on an assembly line. Raw materials for these products are the same for each widget.

Examples include – toys, medical equipment, computers, smartphones and cars.

Process Manufacturing

This type of manufacturing is more complex in that it involves the changing or the transformation of raw materials into the product as a continuous batch, where the distinction between one unit and another is not easily identifiable. In the case of process manufacturing, it is not possible to disassemble the final product into its original raw materials.

Examples include – API production,
oil and gas refining and bakery operations.

The production of API is process manufacturing whereas the packaging of the drug substance tablet is discrete manufacturing. There are some important differences which need to be considered when assessing performance measurement approaches in traditional discrete manufacturing, for example, automobile and electronics and the process manufacturing of API in pharma and biopharma plants.

Plant level performance measures may be the same for both discrete and processing manufacturing but the measurement systems will be very different.

Pharma Biopharma Discrete
Batch cycle time Batch processing CT of 24-180 hrs. Batch processing CT 48-2,000hrs. CT vary greatly, stages of the process can have CT as short as 5 mins – 1 hour
Processing methods A combination of automation and a large number of manual interactions. Highly automated.
Production visibility Poor visibility of product creation as it is contained in vessels, pipes and hoses during processing. Little visibility of chemical reactions. The product is typically visible right throughout the manufacturing process.
Process improvement changes Process improvement changes are slow and often require regulatory approval. The industry is highly regulated by the FDA and their equivalent in other countries. Changes can be implemented with in-house approval.
Changes can be implemented with in-house approval. A high percentage of manufacturing capacity is taken up with cleaning and changeover, especially for multiple purpose plants (i.e. more than 1 product). Cleaning and changeover is typically not a factor and where required is highly efficient.
Yield measurement For batch processing yield can only be assessed on completion of the batch. Yield can be measured on upstream process during processing but not until the end for downstream. Yield is measured and reported in real time during manufacturing.
Company gross margins Historically high gross margins and little competition due to high regulation and patent protection. (This has changed over the last 3-5 years. Gross margins can be relatively small and profits are generated by large volumes.

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