Integration: ERP Systems and MES Working Together for Greater Output

In manufacturing, the focus today leans toward more productivity, lower costs and better quality. For Operations Managers, this push means relying more on the intelligent use of technology to make sure your operation functions as efficiently as possible. One way you can help ensure the maximum use of resources is to unify the functions of your Manufacturing Execution System (MES) and Enterprise Resource Planning (ERP) system.

These two distinct yet related systems have evolved separately in most organizations over the decades. As the overall view of business operations has gradually changed from one of individual departments to a unified whole; however, the need to merge these systems has grown.

The complexities of the global supply chain, more imposed regulations and the need to maximize every available asset to remain competitive demands companies capitalize on technology’s ability to capture and share all forms of data. Instead of isolating departmental functions, a transcendental view of the entire organization must dominate long-term planning and daily decision making.

MES is focused on the shop floor, keeping production in line and controlling the building of parts. ERP systems are primarily responsible for managing inventory, sales orders and shipments. Having these systems communicate with each other is essential. If you have both, it’s kind of crazy not to link them together. The benefits are about visibility.

While the functions of MES and ERP have always intermingled and overlapped, modern best practices suggest a conscious fusing of the two into a seamless data resource. While the two systems continue to maintain their own identities and functions, improving the way they communicate with each other provides benefits for the entire organization.

Getting the most out of both of your systems means that you will have to unite them. Once you have meshed them together, your organization will realize entirely new paybacks that each system could not provide on its own.

1. Advantages for the Shop Floor
2. Benefits for the Customer-Facing Side
3. MES to ERP: Inventory Reports
4. ERP to MES: Job Initiation Commands
5. Creating a Closed Loop System
6. A Holistic Business Model

Advantages for the Shop Floor

The production line is a critical link in the success of your company. When it operates to full capacity without many errors and setbacks, things are good. In this situation, it is easy to take an optimistic view of the business and all of its parts. On the other hand, when the line is fraught with problems – quality issues, missed deadlines, excessive waste – things can get bleak in a flash.

A lack of shared data forces people to make decisions in the dark. Guessing is no way to run an efficient manufacturing operation. When departments become "silos" they tend to get defensive. A strange phenomenon occurs that results in personnel hoarding information that could be shared. The remedy? Transparent organizations made possible by data flowing automatically from one department to another.

One way to prevent a misfiring production engine is to provide it with the data it needs to operate correctly. Early notification allows production managers to plan the use of their resources. When information is flowing freely from the front office to the plant, decisions are shared and rational. There is less reactive "firefighting" and more strategic planning. Personnel can start focusing on improving quality and increasing output instead of barely making a quota because they have to spend most of their time in recovery mode.

When an uptick in demand occurs, the front office usually knows about it in advance. In many operations, it takes time for that crucial information to trickle down to the people who have the greatest need to know it – the Production Managers and people on the floor!

Imagine a scenario where the entire organization gets notified simultaneously. Instead of finding out at the last minute and going into emergency mode, the plant can prepare in advance for the increased production. They can keep errors, and stress, to a minimum and still do a great job meeting the challenge.

It may be hard for you to believe, but transforming the way information is shared across your organization can have a dramatic effect. By allowing everyone within the organization access to the information that drives management level decision making, the organization as a whole begins to take ownership of the entire business process. Isolation becomes a thing of the past, and the company can become healthier and start to function in an entirely new realm.

Benefits for the Customer-Facing Side

From the other end, when your organization achieves MES and ERP integration, personnel on the business side of things can see in real time where their material is in the line. Schedules for meeting shipping dates are no longer guessing games. They can relay information to customers about timelines with certainty.

You will be able to spot problems early and deal with them head on instead of being blindsided at the last minute. Increasing quantities can occur before the customer has to complain about shortages. You can spot problems with a particular supplier in time to find a replacement before the complications begin to mount. Your people identify any quality problems early enough to correct them on the line or deal with only a small subset in the field.

Operating in this manner inspires confidence. Your customers believe what you say because they know they can trust you. Your office workers understand what is going on and feel empowered to improve the organization. Planners can look beyond the theoretical and get a feel for the reality of daily operations. Making decisions is not a hit or miss venture, but instead, a systematic process based on verifiable facts.

The Integrated Flow

Hopefully, by now you understand how beneficial it is to have your MES and ERP talking to each other. You see how the knitting of these two systems together will work to improve your entire operation. You are probably wondering specifically what information these two systems need to share. The shared data boils down to two variables flowing in two directions.

MES to ERP: Inventory Reports

ERP manages inventory levels. Consequently, what it needs to know from the MES is when and in what quantity parts are required for a given job. As the MES calculates the sequence and scope of each segment of the production process, it transmits to the ERP what components each stage of the build requires.

Depending on the job at hand, this could mean ordering finished parts to go into an assembly or ordering the individual pieces that make up the parts themselves. Since MES knows precisely when the process requires each component, it can streamline and prioritize the ordering on the ERP end.

The sharing of production turnaround times helps to inform timely ordering and guarantees that the material needed to build is on hand at the right time. This communication prevents delays due to mistimed orders or not communicating when suppliers have to backorder parts.

ERP to MES: Job Initiation Commands

MES is the action-oriented piece in the production puzzle. It needs a command to "go," and it gets busy. The ERP system initiates the job by telling the MES to build a given number of a particular part by a specific date. The ERP system, not a human worker, communicates to the MES that it is time to begin taking action to fill the order.

You can think of MES as a level in-between the business side of the operation and the physical production line. Personnel take the order and enter the information about quantities and deadlines into the ERP. The MES organizes the information it receives from the ERP in a way that the production line process can understand and work with most efficiently.

It is similar to how they shoot a film in Hollywood. The screenplay is like the ERP side. It is structured based on the outcome, the story the audience (the customer) will see. However, it isn't practical to shoot the movie in the exact sequence of the script. The crew might be flying back and forth across the globe trying to film the scenes in order.

Instead, they develop a shooting schedule to figure out the best sequence in which to shoot the scenes. The shooting schedule is similar to what the MES does. It decides how work will be accomplished on the production line in the most efficient way possible based on the information given to it by the ERP.

This process is transparent to the customer (or member of the movie audience). They see that they have the right quantity of high-quality parts on the date they ordered them. The communication between the ERP system and the MES takes care of all the gritty details.

Creating a Closed Loop System

As mentioned, MES and ERP systems developed on their own. You probably purchased them from different vendors. Since combining them was not the original goal, getting them to talk to each other was usually not an option. As business models changed, the desire and advantage of bringing these two systems together began to outweigh the difficulties.

The first real attempts involved having human operators enter data manually from each system into the other. This process is a slow and error-prone method to achieve integration. It also loses the advantage of real-time data sharing that is the core power of combining MES and ERP.

Keep in mind that ERP is not a real-time system. It relies on transaction data, and consequently, it is more of a rear-facing data resource. The ERP program examines historical data and helps in decision making by creating a snapshot of the business across departments.

MES, on the other hand, drives events based on real-time data that it receives from sensors and other inputs as production is taking place. It puts the historical information it draws from ERP to immediate use in the manufacture of goods. It sends back real-time information to ERP for conversion into transactional details.

For the two systems to talk, both must provide output data in either a standardized format or one that can be easily converted to match each other. If you are to realize the maximum benefits of integration, a closed loop must exist so that the information generated by one system feeds into the other, and each system uses the data provided to create its output.

A Holistic Business Model

A closed-loop system ensures data integrity, which in turn supports accurate forecasting, ordering and estimating costs. The result will be a tighter organization that runs on reliable data. Communication between the business office and the plant floor results in a continually updated view of production outputs, machine availability and overall efficiency.

As automation increases, the data pool continues to expand. Data sharing on every level must increase to function with a supply chain and process trail that steadily becomes more complex. Opportunities to improve quality and meet customer expectations on every level develop continually.

The integration of every aspect of an organization is made even more potent by the increased accessibility of data to all stakeholders by adding a layer of cloud-enabled functionality. Connecting systems to the cloud allow individuals from one part of an organization to see data from another. With no obscured information, all decisions can become fully informed ones.

This revolution is creating a new form of doing business. Sometimes called Industry 4.0, this model foresees a future where a globally integrated supply chain increases efficiency to unprecedented levels. Entirely data-driven manufacturing promises to take the guesswork out of doing business, remove the cloistering of vital information and help the wheels of innovation turn more freely than they ever have.

The first step in this fantastic new epoch is capturing and disseminating your data from the production line to the front office and vice versa. Enabling system integration between your MES and ERP systems is not only a transformative action on its own, but it also sets your organization up to take the next giant leap forward.

MES and ERP system integration is pivotal for the growth of your organization.

Contact Intraratio today to discuss ways we can help you implement cutting-edge technology that will help your organization enjoy the benefits of integration now and well into the future.

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