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Discrete vs Process Manufacturing: A Comparative Overview

Naama Aharoni  |  September 18, 2023

How to distinguish between those 2 types of manufacturing?

Manufacturing is the lifeblood of many economies, pumping essential goods and services into the global market. Yet, not all manufacturing is created equal. A fundamental distinction lies between process and discrete manufacturing, two methods vastly different in their operations, outputs, and Enterprise Resource Planning (ERP) system requirements.

The goal of this article is to help you distinguish between these two types of manufacturing, and to better understand the influence of the fourth industrial revolution (Industry 4.0) on each of them, particularly through ERP systems that integrate optimally into this new technological era.


The manufacturing industry is a diverse and complex sector that uses various methods to produce finished goods from raw materials. Despite its complexities, one can broadly categorize the industry into two primary types: process manufacturing and discrete manufacturing.


Discrete manufacturing involves assembling distinct items and is often associated with products like cars, furniture, and toys. These goods are easy to separate and can often be disassembled back into their original components.

The assembly line is a classic example of discrete manufacturing, where each item goes through a series of assembly stations, with different components added at each stage. These items can be disassembled and their components used again. Discrete manufacturing involves assembling these components according to a Bill of Materials (BOM).


It involves the creation of goods by combining raw materials, often through a chemical reaction or mixing of ingredients based on a specific formula or recipe. Once these ingredients are mixed together, it is usually impossible to return them to their original state.

The products created with this type are typically in bulk quantities: they can be consistently produced in large quantities and are chemically homogenous. While the exact physical characteristics of each unit might vary (a batch of cookies might have some cookies larger than others), the overall makeup of the product is uniform. Examples of this process manufacturing include food processing, oil refining, and pharmaceutical manufacturing.


ERP software is an integrated software application that streamlines and automates production processes, providing a real-time, unified view of the data. They allow businesses to make data-driven decisions and improve operational efficiency. While ERP systems are used across various industries, they are particularly significant in the manufacturing sector due to the complexity of manufacturing operations.


Given the assembly nature of discrete manufacturing, ERP systems play a critical role in ensuring that the right components are available at the right time to meet production schedules. ERP systems manage:

  • Bill of Materials (BOM).
  • Inventory tracking of individual units.
  • Supply chain and maintenance of quality control records.

With typically larger product portfolios, ERP systems help discrete manufacturers manage the complexity of their operations.


Process manufacturing requires ERP systems with more specialized features. These include:

  • Batch tracking.
  • Formula management.
  • Yield prediction.
  • Quality control for batches.
  • Compliance documentation. 
  • Complex units of measure.
  • Traceability.

Although ERP software is a significant investment, its benefits can be substantial. These include improved operational efficiency, better decision-making, increased productivity, reduced costs, improved customer service, and ultimately, a competitive advantage.


Material Requirements Planning (MRP) is a vital aspect of inventory management and production planning, aiming to balance the availability of materials with production needs. Integrating an MRP module into an ERP system is an essential step in ensuring consistent, efficient management of manufacturing operations within discrete or process manufacturing companies.


Discrete manufacturing companies often deal with a complex network of components and parts that need to be accurately managed. MRP helps by providing detailed schedules and plans that specify when and how many of each component should be purchased based on the master production schedule. This ensures that all necessary components are available for production when needed while minimizing excess inventory and associated costs.


Though MRP systems originated in the discrete manufacturing world, its principles can be adapted to suit the needs of process manufacturing. This requires some modifications, including more flexible BOM structures to handle recipes rather than parts and capabilities to manage the unique characteristics of process manufacturing as mentioned above.

A variant of MRP, often termed MRP II, is commonly used. This variant expands upon traditional MRP, incorporating additional data such as labor and machine capacity and financial resources, providing a comprehensive production plan.

MRP in process manufacturing is also closely tied to batch and sequence control, managing yields, and ensuring the quality of materials. It must account for factors like co-products and by-products, the shelf life of materials, potency, and the sequencing of production runs to avoid cross-contamination.

However, Advanced Planning and Scheduling (APS) systems might be more appropriate for some complex process industries, as they can handle the constraints and complexities better than traditional MRP.


Quality control is a significant aspect of both methods, particularly for SMBs, where the impact of product failures and recalls can be particularly damaging.


Quality control in discrete manufacturing often involves inspecting individual parts or finished products against predefined specifications. SMBs may not have the same resources as larger firms to invest in expensive automated inspection systems. Thus, a more hands-on approach is often required.

This might involve using traditional tools such as calipers, micrometers, and gauges for measurement, alongside visual inspections. Regularly scheduled maintenance for equipment, employee training, and establishing a culture of quality can also significantly impact final product consistency.


SMBs face a different set of challenges. Since the manufacturing process involves transforming raw materials through chemical reactions or blends, it’s often impossible to reverse engineer the process to find out what went wrong. Therefore, quality control must be proactive, constantly monitoring the process parameters to ensure they remain within acceptable limits.

For SMBs, this might involve investing in sensors and control systems to monitor variables like temperature, pressure, and flow rates, or installing simple in-line quality measurement systems to check product characteristics like viscosity or pH during production.

Despite the size and resource limitations, SMBs can still benefit from implementing principles from lean manufacturing and Six Sigma to eliminate waste, reduce variability, and improve quality.


Within the realm of manufacturing, the supply chain is a complex web of activities and interactions that can greatly impact a company’s profitability and efficiency. For SMBs in both manufacturing sectors, an effective supply chain can be a strategic enabler of growth and competitiveness.


For discrete manufacturers, managing the supply chain often involves coordinating a myriad of individual parts, components, and assemblies. Each element needs to arrive at the right time, in the right quantity, and of the right quality to ensure efficient and uninterrupted production.

A manufacturing ERP system can greatly assist with this by integrating data from various stages of the supply chain into a centralized platform. This allows for real-time visibility and control over inventory levels, supplier performance, production schedules, and customer orders.

For SMBs, this means being able to make informed decisions quickly, respond to changes in demand more effectively, and reduce instances of stockouts or overstocks. It also facilitates more accurate demand forecasting, enabling SMBs to plan production more efficiently and manage their resources more effectively.


Managing the supply chain often involves handling raw materials that can fluctuate in cost, quality, and availability. Furthermore, process manufacturers must deal with factors such as shelf life and storage conditions, making supply chain management even more complex.

An ERP system for process manufacturing companies can help manage these complexities by providing a unified view of the entire supply chain. For example, it can track batch and lot information, ensuring traceability from raw materials to finished products. It can also monitor inventory levels in real time, helping process manufacturers to balance the need to keep sufficient stock for production against the risk of spoilage or obsolescence.

Additionally, process manufacturers can use ERP systems to automate the management of recipes and formulas, adjust manufacturing processes based on the variability of incoming raw materials, and ensure consistent final product quality.


Despite the increasing prominence of automation, human labor remains an integral component of the industry. However, due to their distinct operational structures, the skills and numbers required can differ markedly between discrete vs. process manufacturing.


Discrete manufacturing is generally labor-intensive and requires a broad spectrum of skills. Workers are needed for various tasks such as operating machinery, assembling parts, conducting inspections, and overseeing production. A significant degree of manual dexterity and technical understanding is often needed, particularly in roles involving the assembly of complex products.

Due to the tangible and individual nature of the discrete manufacturing process, tasks such as quality control and repairs can be labor-intensive. It often involves manual inspections or reworks; in the case of defective products, manual disassembly and reassembly may be required.


Process manufacturing is often less labor-intensive due to the continuous and automated nature of the processes. The focus shifts from manual tasks to overseeing and controlling the production process, ensuring the right mixtures, timings, and conditions.

Consequently, in-process manufacturing labor roles often require a higher degree of technical knowledge and specialization. Workers must understand the underlying production processes, control systems, and safety protocols. They might need to interpret data from various sensors and adjust the process parameters to maintain final product quality.


In conclusion, in discrete vs. process manufacturing, each type comes with unique characteristics, challenges, and opportunities.

Despite these differences, both types of manufacturing share common goals of improving efficiency, quality and sustainability to meet changing market demand, but also are also influenced by advances in the fourth industrial revolution, Industry 4.0.

Companies in both fields need to adjust their strategies to adapt to these changes, investing in the technologies and skills needed to remain competitive in a constantly changing world, particularly in the context of the smart factory.

For more insights on how to face the most pressing challenges in process manufacturing , download our ebook.