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ERP and MES: The Relationship Explained
27Aug

ERP and MES: The Relationship Explained

Manufacturers are becoming more competitive day-by-day. From adopting lean manufacturing strategies to investing in power-driven machinery, manufacturers endeavor to deliver the best quality products in a short period.

Manufacturing Execution Systems (MES) is an extensive software that controls complex manufacturing operations and data on the shop-floor. MES software aims to improve the quality of the production process to help manufacturers respond well to shifts in demand and customer preference.

What does MES software do?

MES

Manufacturing Execution System allows businesses to track, monitor and collect accurate data about the production cycle. MES can be integrated with business process systems and ERP software to provide organizations with deep views of its production capabilities.

A well-rounded powerful MES software facilitates:

  • Product tracking: A range of features in ERP ensures proper tracking of products on the shop floor.
  • Data collection: Making informed business decisions becomes easier using the reports, dashboards, KPIs and other analytical tools offered by MES. Get real-time data about shop floor, labor, scrap and other resources to schedule production runs and manage machine maintenance/upkeep.
  • Management of resources and quality control: With MES, you can supervise your employees remotely by tracking their quality of work. This enables production variation and enhancements.

ERP

Enterprise Resource Planning (ERP) solutions provide a backbone to the organization by streamlining the flow of communication across every department. From accounting and finance to warehouse management, inventory, sales, purchasing and reporting, ERP can manage every department, offering real-time data access and visibility to users.

What does ERP software do?

ERP systems allow the organization to standardize and automate key business practices, gain visibility into mission-critical practices and operations and manage company resources on a single platform.

Core competencies of ERP vs MES

ERP improves: customer service and data management, enables better decision making by integrating functions, supports advanced real-time planning, monitoring and execution, increase cost control, etc.

MES improves: product traceability, and dynamic production scheduling, connects manufacturing operations on the shop floor to the back office, enable quality management at all levels, forecasts and optimizes shop floor operations and resource utilization.

MES is a vital element of Manufacturing ERP

Why do I need MES, if I already use ERP?

Large manufacturing organizations rely on ERP to manage multiple parts and aspects of their business. However, ERP leaves many gaps in managing shop floor execution and resources (machines and humans).

Integrating ERP and MES enables your business to utilize the core competencies of evolving technology.

Tasks such as scheduling of machines and ensuring traceability via batch management, are all handled by MES software. MES allows manufacturers to connect manufacturing operations to the entire company.

ERP is about “Why”, MES is about “How to”?

MES feeds ERP with timely information, such as parts and serial number usage, information about production levels, scrap material and more. Integrating MES and ERP encourages accurate demand forecasting helping organizations reduce inventory by avoiding overproduction.

5 ways ERP and MES integration can make manufacturing agile:

Accuracy in demand forecasting

Insufficient inventory is detrimental to business bottom line. Similarly, excess inventory also ties up business cash flow that can be used in more productive areas such as purchasing new machinery and technology.

The way you deal with inventory makes a huge difference in work-in-progress. Ensuring collaboration between ERP and manufacturing data can help businesses manage inventories by reducing overproduction.

Just-in-time (JIT) delivery

JIT encourages speedier order fulfillment by initiating the production process when a customer places an order. When ERP and MES are integrated, it allows supervisors to track inbound and outbound inventory and can react to changes as quickly as possible.

Eliminate rush orders

Rush orders are a big risk that supply chain managers sometimes take. In rush order transactions, creation of customer orders and deliveries happen on the same day. MES and ERP integration ensures incorporating quicker production times on the shop floor in order to accommodate rush orders and deliveries.

Better quality products

MES automates data collection, detects tracking and resolution, centralizes the system by managing sequencing, product tracking and genealogy, and quality management – just to name a few.

Integrating ERP with MES combines all the above and help ensures detection of a defective product if applicable. In any chance, if a defective product is found, it’s returned to the supplier, reducing the risk of product recalls and improves overall quality.

Increased productivity

Management of smart machines on the shop floor ensures efficient and leaner manufacturing by planning an adequate quantity of goods for production. This brings back-office and front-office executives onto the same page, leaving little room for error or misinterpretation. This can increase productivity and ensure optimal uptime, promoting the future and present growth of the business.

The future of ERP and MES

Considering the pace at which technology is evolving, the manufacturing industry will grow enormously and rapidly. Moving forward, MES and ERP will be more modular, cloud-based and connected to all sorts of devices through the Internet of Things (IoT).

Industry 4.0 promotes wireless sensor and actuator networks for in-progress production adjustments. RFID tags are widely used on the shop floor to track work-in-progress goods and manage the utilization and availability of assets.

The Relationship between ERP and MES

Organizations should understand their business requirements and thereafter select a full-fledged software that can automate the key business processes. ERP software is used by every organization, whether large or small-scale. It manages the entire organization, but production is not a part of ERP modules. On the other hand, MES primarily focuses on the production/shop floor functions. So, it is better to have MES embedded in it so that shop floor activities can be managed seamlessly. If you are someone who’s looking for an intelligent ERP with MES embedded in it, please visit: www.optiproerp.com.