- By Wendy Stanley
- November 10, 2020
Just as the Industrial Revolution replaced handmade production processes, integrated manufacturing and enterprise data systems must replace the manual data processes that hold manufacturers back today.
As modern manufacturing grows in its complexity, manufacturers who lack integrated systems to transfer, track and translate data are at a competitive disadvantage. Productivity, flexibility, and growth depend on these companies’ abilities to maximize end-to-end efficiencies. Just as the Industrial Revolution replaced handmade production processes, integrated manufacturing and enterprise data systems must replace the manual data processes that hold manufacturers back today.
But while most large manufacturers have enterprise resource planning (ERP) systems common to modern enterprises, these business systems may lack manufacturing functionality critical to their industry. They need manufacturing execution systems (MES) to facilitate unique, factory-floor processes and to lay the groundwork for future adaptability and growth.
These two systems—MES and ERP—are the integrated systems manufacturers need the most in order to transfer, track, and translate data effectively. But because standalone MES and ERP are often built by different software vendors, they may “speak different languages” and struggle to integrate effectively.
On the other hand, modular MES systems may fill in the manufacturing-specific gaps where ERP systems might be lacking, without the cost of full, standalone MES systems. As we will find, manufacturers can select from a number of configurable MES solutions to suit their needs and integrate with their existing ERP systems to create a single system of record.
What are the differences between MES and ERP?
Both MES and ERP work individually to create more responsive business environments, helping employees and technologies adjust to tasks quickly while maintaining quality and efficiency. MES helps manufacturers track and optimize production and processes on the shop floor. ERP is critical to maintaining the integrity and maximizing the value of supply chains that feed those processes and the broader business.
Many ERP systems come with some form of MES functionality, and because most enterprise manufacturers have existing ERP systems, they often rely on that existing functionality rather than adopt and integrate MES solutions. However, manufacturers often find existing MES functionality to be lacking critical data collection. As a result, they are unable to accurately track and analyze shop floor data in real-time, and to the granular level they require.
MES software that is not native to an existing ERP system may close some operational gaps and offer advantages that ERP-based functionality cannot. It may provide real-time production KPIs, for example, or WIP tracking and quality controls unavailable in ERP solutions. Similarly, the broader enterprise may lack visibility into manufacturing processes without a sophisticated MES solution as well.
Integrating modular MES with existing ERP solutions
A modular MES solution is an alternative to both standalone MES and MES functionalities that come as part of an existing ERP system. It allows manufacturers to pick and choose the functionality they need, with opportunities to expand on those capabilities later, often at a lower cost than standalone MES integrations.
When integrated with ERP, modular MES feeds real-time data from manufacturing processes back to a single system of record. Insights into the status of materials, resources, and labor feed that single system for a 360° view of business-critical KPIs, without manually importing data from MES to ERP. Because the MES is modular, manufacturers retain some flexibility to adopt new MES functionalities in the future when new business requirements emerge, without investing in and integrating a new, standalone MES solution.
Extending ERP Functionality without a Standalone MES System
There is a growing precedence in manufacturing for integrated systems of this kind—especially in light of recent market volatility and unpredictability. Integrating ERP and modular MES allows for more accurate demand forecasting, reduced inventory levels, and elimination of overproduction, for example. Experts anticipate digitization of this kind is driving 3% in additional revenue and 3.6% in reduced costs for manufacturers each year, IndustryWeek reports. Here’s a closer look at the benefits ERP and MES integrations can provide:
Ongoing access to real-time information improves production, reduces manual efforts, and eliminates errors in supply chain and factory-floor processes.
Automated decision-making for manufacturing-specific operations frees employees from tedious and repetitive tasks, reduces the cost of everyday processes, and protects data integrity.
Greater accuracy in demand forecasting helps manufacturers minimize overproduction and excess inventory; manufacturers can safely adjust production in real time to meet changing demands as well.
Improved inventory visibility and supplier communication: ERP and MES integrations help manufacturers visualize raw materials and other supply levels in real time, and even automatically reorder materials before inventory falls below safe levels.
A smart step forward in manufacturers’ digital transformation
Manufacturers bogged down by legacy systems are understandably skeptical about adoption of new enterprise software. But they need to move forward in their digital journey nonetheless. Adopting modular MES solutions and integrating them with new or existing ERP systems is an approachable way for manufacturers to step forward into a true Industry 4.0 manufacturing environment.
In addition to streamlining operations, the integration allows manufacturers to identify new, business-specific KPIs that carry long-term meaning for those companies. Optimizing manufacturing operations and resource planning therefore aligns with long-term business objectives, with flexibility enough to meet future demands—whatever those demands might be.
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