Process industries are vital to producing food, pharmaceuticals, paper, packaging, oil and petrol and many other goods. The industries use either batch processing or continuous processing to make goods.

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The process industries typically take raw materials then processes them to turn them into higher value products.

An oil refinery is an example of continuous processing. It takes in shipments of crude oil that has limited practical uses and converts it to jet fuel, petrol for cars and so on. It does this by a continuous process in which raw materials are mixed and blended, then boiled, then cooled, then given various additives and so on. At the end of the process, the product is stored on a tank farm at the plant before being moved by tanker if it is vehicle fuel, or probably pipeline if it is jet fuel, to the locality where the end user will access it.

How profit is accounted for

Accounting for value can be a problem in the continuous processing industries. If you start with a product such as crude oil and turn it into a more expensive product such as jet fuel, how do you decide how much profit you are making at any point in the process? In the refinery example, a Refinery Input Output Statement will reconcile the input raw materials with the output finished products. SAP or other enterprise systems are used because they allow for a cash representation of the movement of materials through the process.

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It’s important to cost the process at each stage because process efficiency directly impacts profitability. Process Industry Informer magazine has some interesting real-life examples of this rule –

How processes are designed

Engineers design processes by starting with the raw materials that will be used, and the operations that will be performed on them. A process flow can then be drawn up. This will show the movement of the raw materials through the system, along with any points at which they are mixed, distilled, separated and so on. The rate of flow through the system is described, along with all the equipment types, such as inline static mixers, that are used to control and manage the process.

The process industries are fascinating because they transform unpromising raw materials into the products we all consume and use.