In this first of two articles, the definitions and differences between enterprise resource planning (ERP) systems and manufacturing execution systems (MES) are considered. Part II will consider the advantages of integrating both systems in the interests of operational and production efficiency, as well as superior customer service.
The majority of forge companies today continue to discuss the need to establish information integration that is coordinated and summarized among their various departments. Just to survive in the competitive business world, senior management needs to have the proper reporting tools summarizing a multitude of operations from each department in the right format and within a specific timeframe. More importantly, they should be able to rely on this information to make strategic decisions. Therefore, having the right information integrated among the various internal departments of the company is critical.
ERP, MES or Both?
What is the difference between an enterprise resource planning (ERP) system and a manufacturing execution system (MES)? What you call them really doesn’t matter. What does matter is whether the software system your company uses makes your operation more efficient, productive and profitable.
ERP systems typically record transactional data and report it daily, weekly or monthly. This does not fully meet the needs of production managers and plant supervisors, who want a platform to be able to record and report (in real time) every production transaction step on the floor and tie their QMS (quality management system) directly to the operators and equipment to improve quality and reduce rework.
Software applications not only need to record and report transactions as they occur, but they also need to track material and/or parts as they move about the plant and show WIP (work in process) in real time from any computer or mobile device. This ensures better visibility into what is happening with specific jobs/orders. This demand spurred the development of software applications to support real-time data collection, which evolved to become what we know today as MES.
What is MES?
At their most basic, manufacturing execution systems are computerized systems used in traditional manufacturing to track, control and document the steps involved from work-order creation all the way through to shipping the finished goods. (Note that it may also include the actual customer quoting process prior to the work order, since some processing steps have charges associated with them, while others do not.)
MES provides information that helps decision-makers understand how current conditions on the production floor can be optimized to improve throughput and reduce bottlenecks. They work in real time to better enable the coherent orchestration of multiple resources and work centers involved in the overall production process such as material, receiving, personnel, equipment/machines, outside-vendor embedded processes, packaging/shipping and other support services.
MES typically operates across multiple functional areas that work together to complete the overall business processes, while collecting quality-related metrics that can be permanently attached to each individual work order, including photographs, videos and other media in real time. This can be especially important when needing to follow strict processing specifications and guidelines from “in-force” regulations, where documentation and proof of processes, events and actions may be required.
Sometimes this data is included in a certification statement (cert). This may be sent to the customer certifying that the right processes, procedures and operating instructions were followed in completing their order. Many companies have contacted me discussing the “shortcomings” of their ERP system, and one of the areas lacking is the ability to create a cert, which a good MES can provide very easily.
Some ERP systems include a portion of the functionality that is required for better shop-floor control and visibility, but we have heard from too many companies over the years that many do not have all the functionality they need. Additionally, material requirements planning (MRP) systems were developed, but there was still something missing.
This is why many companies have since added MES to support the manufacturing operation fully, while allowing for better front-office decision-making and immediate responsiveness to customer inquiries. No more putting customers on hold to track down the status of an order or shipment. Some MES also provide a Customer Portal for better customer service.
Most corporate ERP systems are not integrated with the production floor, causing discrepancies between planned versus actual production, underutilized capacity and higher manufacturing costs. Luckily, most corporate divisions have the freedom and ability to select an MES solution to provide the plant-floor visibility that their ERP system lacks.
Beyond replacing the spreadsheets and paper notes that have long been used in manufacturing to track production, MES has become the primary connecting element between the shop floor and enterprise systems. By replacing the traditional paper-based methods with MES, companies are able to deal with exceptions in real time so that batch records and device history records can be reviewed while manufacturing is ongoing, rather than just post-production. They can also initiate a CAPA (corrective and preventive action) to alleviate an ongoing problem in a production process.
In highly automated industries, MES provides an intermediate data collection and management bridge for SCADA (supervisory control and data acquisition) systems or process-control systems effectuating the automation of machines. This real-time data can then be part of the stored work-order history of a job. MES provides a bridge that integrates production management to engineering configurations, charts, diagrams and documented specifications.
Over the years, industrial standards and processing models have refined the scope of MES functionality. This scope includes:
Process (i.e., recipe) creation and customization on-the-fly
Management of resources (equipment, personnel, raw materials)
Scheduling to work centers, equipment, personnel
Qualification of equipment, personnel, vendors for a specific job
Allowing for variable-type control-plan characteristics, converted units and rounding algorithms
Documentation/audit trail showing conformance to specification requirements
Automatic real-time notification of “triggering events” on the production floor
Managing, planning and controlling the maintenance of production equipment (and restrict use when necessary)
Inventory and P.O. management (including automatic notification of reorder levels)
Providing real-time operating instructions, videos, diagrams, specification verbiage
Specifying inspection/testing requirements, along with the required quality data collection
Risk analysis (identification, assessment and prioritization of risks through risk templates)
Safety and compliance management and recordkeeping
Statistical process control (SPC); statistical rules to help spot trends
Capturing direct and indirect labor on each production job
Production real-time tracking, data collection and performance analysis
The key is to find a solution that “fits” in well with your operating processes/procedures. What are some of the savings forge companies can achieve when utilizing MES? To name only a few: decrease in rejects, increase in the number of work orders completed, decrease in maintenance costs, average machine downtime savings and amount of time saved per week in scheduling.
In Part II of this article, we will discuss integrating MES and ERP systems in your shop.