Recipe and Formula Management
Recipe and formula management represents products as proportions of ingredients or substances, instead of a fixed bill of materials.
Recipe and Formula Management: Not to be confused with
Recipe management is NOT the same as a bill of materials. A bill of materials lists fixed quantities of individual parts, a recipe works with proportions and yield variance, for example when a raw material has a varying purity or water evaporates during processing.
Process manufacturing differs from discrete manufacturing with bills of materials in that raw materials are mixed or processed in proportions rather than unit counts to create a new product (Source 1). A recipe or formula needs to account for yield variance, co-products and varying raw material quality, none of which a classic bill of materials is built to handle.
This matters most in the Chemicals & Process Industry and Food & Beverage, where recipe costing feeds directly into material requirements planning.
Related terms
Sources for Recipe and Formula Management
- Wikipedia, "Process manufacturing" ↗