Randy Smith can still identify the moment the problem became obvious.
Years ago, before Vicinity Software existed, he was out in the market as a consultant, selling into manufacturing with what he now describes as the same tools and the same engines everyone else had.
Then he ran into a vertical competitor named BatchMaster.
“I got my clock cleaned in a demo and an opportunity by a vertical solution,” Smith said. He went home, called BatchMaster and asked how to sign up.
Specialist ISVs in batch manufacturing remain necessary because formulas, compliance and traceability sit inside the operating model itself.
For Microsoft Partners chasing manufacturing growth in Business Central, the temptation is to treat food, beverage and chemical companies as another version of the same ERP sale. A manufacturer is a manufacturer. Add some configuration, a few customizations, maybe a specialist later if needed.
However, that is precisely the mistake Smith says the market keeps making.
Smith estimates that about 30% of manufacturers are batch or process manufacturers.
Even one major slice of that market is large. According to the USDA, U.S. food and beverage manufacturing accounted for almost 17 per cent of manufacturing sales and employed nearly 2 million workers in 2021, with close to 43,000 establishments in 2022.
But the size of the market is only part of the point.
Why Batch Manufacturing is Different
The deeper issue is that process manufacturers do not just need production control. They need software that understands formulas, revision discipline, quality, traceability and labelling as core business functions rather than edge cases. Calculating the nutritional values of formula ingredients is time-consuming, for example. In heavily regulated sectors, “ancillary data,” as Smith calls it, is not ancillary at all.
The FDA says food sold in the U.S. must be properly labelled, that most foods must bear nutrition labelling, and that food-label regulations are “frequently changed.” The agency also requires a clear declaration of major allergens.
Canada imposes its own allergen and ingredient-list requirements for prepackaged foods. The EU does the same for allergen labelling and other food information rules. A Partner can treat those obligations as a customization project.
Or it can admit that they are part of the category.
How Specialist ISVs Reduce Risk for Partners
Specialist ISVs are valuable because they reduce the amount of category risk a Partner is pretending not to carry.
Smith describes the best Partner relationships as the ones where the Partner remains “the overall architect of all things business, all things Dynamics for that client,” while Vicinity handles “that manufacturing compliance, R&D quality, that piece of it that makes that company pretty unique.”
That division of labour preserves what each side actually knows. The Partner can stay on finance, distribution, warehousing and logistics. The specialist can own the conversion of raw material to finished goods, along with the quality and compliance burden wrapped around it.
“We will actually combine multiple items together to fill a batch. We will split batches that go down different production lines, adding different colours or ingredients or things like that or toppings.” In other cases, a single raw material becomes multiple finished goods.
To his credit, Smith does not overclaim. He says Vicinity is not for every manufacturer. “A simple mix and dump operation” with a few ingredients making the same product every time may not need a specialist layer.
What’s more, the competitive set says the same thing. Smith does not frame the fight as Vicinity versus another Business Central feature set. He names legacy custom systems, manual processes and process-manufacturing vendors outside the Dynamics channel. In other words, the real competition is not always another ERP configuration. It is the persistence of category-specific software, or the lack of software altogether.
For all the channel maturity, for all the talk about platforms and ecosystems, Smith says the lower end of the market still often comes down to one stubborn fact:
“Excel still is our biggest competitor on the lower-end market, for sure.”
