ERP, MES, or both?

What is the difference between enterprise resource planning (ERP) and a manufacturing execution system (MES)? Ultimately, it matters less what you call it. Infinitely more important is this: Can the system support your manufacturing operation?

How MES Came to Be

Some ERP systems include some or all of the functionality usually expected in an MES, while other ERP platforms may contain only a subset and need an added MES to support the manufacturing operation fully.

Early material requirements planning (MRP) systems evolved into MRP II, manufacturing resource planning, which accounted for the resources, like people and machines, needed to produce a product. It then expanded further to what is now known as ERP.

ERP typically recorded transactional data and reported it daily, weekly, or monthly. This did not meet the needs of shop management, who wanted a platform to be able to record and report every transaction on the floor instantaneously. Software applications needed to record and report transactions as they occur, in real time. This demand spurred the development of software applications to support real-time data collection, which evolved to become what we know today as MES.

In the late 1980s MES for the job shop started to become available. They offered operations scheduling, data collection, and machine maintenance scheduling. By the early 1990s we saw these basic scheduling and data collection software applications being transformed into the MES applications of the modern era.

The term manufacturing execution system was first used in 1992 by AMR Research, now part of Gartner, and in that same year MESA, or the Manufacturing Enterprise Solutions Association, came into existence. MESA defined MES as “a dynamic information system that drives effective execution of manufacturing operations. Using current and accurate data, MES guides, triggers, and reports on plant activities as events occur. The MES set of functions manages production operations from the point of order release into manufacturing to the point of product delivery into finished goods. MES provides mission-critical information about production activities to others across the organization and supply chain via bidirectional channels.”

MES capabilities have improved greatly since 1992 thanks in part to MESA, which has acted as a global forum for manufacturers and software vendors alike. The organization also has helped the growth and adoption of the ANSI/ISA-95 standard, which serves as the basis of MES development.

From the 1990s until today, MES has continued to evolve. Early applications were deployed on-site and modeled on the current manufacturing processes. They often required a high initial capital investment, and they also were not very adaptable. It was difficult for manufacturers to implement changes, and any change required a lot of effort and specialized resources. Those changes also required someone to be very well-versed with the system. These factors also have made some organizations reluctant to replace legacy MES with more modern, flexible, and robust systems.

These early systems also did not eliminate manual data entry—a significant frustration for managers and shop floor personnel alike. It was not unusual to see operators spend time walking over to a computer terminal to key in job information. If the shop didn’t have enough terminals, operators sometimes had to stand in line to enter data into the system. Moreover, manually keying in data opened the door for errors. The result: An effort to track productivity sometimes made an operation less productive.

In the mid-2000s MES started becoming more flexible and web-based. Eventually cloud-deployed applications became popular, which allowed more investment in the application itself rather than the hardware to support it.

The MES also moved from being one monolithic system to being modular, which meant that organizations could choose which function was most critical to their success and pay only for the features required. As long as internet access was available, manufacturers could use an MES from anywhere, from any device (laptop, phone, tablet), and for any plant or production line around the world.

Some may describe MES as either a module or an extension of ERP. Today you will find both stand-alone MES packages that can be integrated into an ERP system as well as ERP systems that have the MES functionality embedded within the application.

Human and Machine

Whether considered independent or a module of ERP, every MES has two distinct points of interaction: human and machine. The human MES, a common component of most modern ERP systems, provides accurate labor reporting, a vital concern in job-costing and job-status reporting. Online transaction tracking gives management a current picture of what is occurring on the plant floor by employee and by job.

Embedded within ERP, human MES provides one holistic flow of information for job management, scheduling, quality assurance, and material management; eliminates dual entry; and provides online, real-time views of the latest plant floor scheduling priorities.

Embedded document management allows plant floor access to needed documentation, including product drawings, process documents, and even multimedia videos of difficult-to-explain processes. It captures rework and scrap reason codes, along with miscellaneous employee comments from the plant floor. Included quality assurance supports the reporting of setup inspection, first article, piece counts, and more. Inventory functions such as adjustment, material issues, and physical inventory counts all can be accessed within MES. Plant floor workers can access the MES using touchscreens, bar code readers, and voice entry, all using a variety of mobile devices.

Machine MES provides automatic production and process monitoring. The intent is to eliminate inaccurate and time-consuming manual data collection, so operators can stop measuring and monitoring and focus instead on making quality products.

Both stand-alone MES and MES modules within ERP can accept manual data entry or data entry directly from machines. Manufacturers can configure and customize reports, dashboards, and key performance indicators that provide different users with the information they need. MES provides real-time information about the status of materials and resources, lot and serial traceability, production planning, dispatching, and quality metrics with statistical process control analytics.

MES Benefits

Custom fabricators and other small job shops may find similar benefits of an MES that larger manufacturers do. MES provides management with the data to make informed decisions using the reports, dashboards, KPIs, and other analytical tools. MES often eliminates the need for a paper trail, leading to marked reductions in paperwork costs.

Automating data entry eliminates errors from manual data entry and frees shop floor personnel to perform more value-added tasks. Access to real-time data about labor, scrap, and maintenance helps improve productivity. The software helps people uncover problems and correct them immediately, which limits the number of bad parts and wasted material and increases uptime.

At the same time, MES allows the shop to adapt. If one machine falls behind or has problems, software can help shift work to other machines and alter the production plan to ensure jobs keep flowing. It also helps coordinate production scheduling and machine maintenance. In these ways, MES helps manage resource availability: man, machine, and material.

MES of the Future

Moving forward, MES likely will become more modular, more connected to the cloud, and more embedded in more devices. Industry 4.0 dictates the end of traditional centralized applications for production control. Smart factories with intelligent and autonomous shop floor entities—from connected production machinery (industrial internet of things) to automated guided vehicles (AGV), all designed around custom production—will be inherently decentralized.

In a sheet metal operation, for instance, jobs will flow from order entry to the shop floor, through cutting, through forming and subsequent welding, coating, and assembly operations. At every step, machines will communicate data, like which jobs are on what sheet, where those sheets have come from, and where parts are going. Estimated cutting and bending times will be compared to actual times, making quoting more accurate than ever. This kind of connectivity is already here, and it’s only going to become more pervasive.

All this will drive future MES development. By managing and monitoring work-in-process and other elements of production, connecting machines, products, parts, and people, MES will help build the factory of the future, all driven by international standards.

Efforts to develop these standards are still in the early stages. Germany’s Industrie 4.0 emerged as the first driver, but the U.S.-based Industrial Internet Consortium—founded in March 2014 by manufacturing, internet, IT, and telecommunications companies—has become a prominent alternative.

Still, when you get to the essence of it all, names do not really matter. Manufacturing is full of jargon and acronyms: MES, ERP, MRP, IIoT, Industry 4.0, and all the rest. Whether an MES works with a separate ERP or an ERP has the functions of an MES embedded inside it, the system needs to help, not hinder, productivity.

It’s about increased visibility to critical data, automating processes, improved quality, increased efficiency, and improved productivity. Ultimately, information needs to flow to make people’s jobs less stressful, easier, and more productive.