For more than 10 years I have been following a number of companies in the implementation of manufacturing execution systems (MES). My involvement has ranged from analyzing the requirements and the potential return on investment, to defining the specifications, to training the operators in how to use the system.
In many of these MES projects, one of the triggering elements has been the installation of a new enterprise resource planning (ERP) system or the replacement of an existing one. It was therefore natural to wonder if every ERP actually needs an MES system. Based on my experience, the answer is absolutely yes.
The reasons I believe that every ERP must be supported by an MES are many, but I will focus on what I believe are the main reasons:
- ERP is not designed to reach the shop floor. Even with all the features related to production execution in an ERP, no machine that produces a piece per cycle will probably ever communicate to the ERP that it completed the cycle. Shop floor prodcution systems and ERP systems operate on a different interpretations of "real time” — one typical of the strategic management of the business, the other associated with the punctual execution of the process. The systems must communicate and act as a seamless whole to allow the manufacturing industry to meet the dynamic demands coming from customers, regulators, suppliers and even internal staff.
- Things change in production 10 times faster. Any strategic or market change managed at the ERP level generates a volume of change about 10 times higher on production level. The production management system therefore must be specifically designed and implemented to manage both the amount and the speed of change it creates for production.
- Those who work with ERP have different needs from those who work in production. Different operators with different needs require not only different information, but also need information presented in a different way. The classic ERP interface tends to organize information for users who perform analysis on which they base decisions. In production, because everything happens faster, the information must be packaged to allow fast—if not immediate - decisions. Often it is not necessary to analyze static data of the recent past, but instead to have information on what is happening in the present and perhaps on an evolving trend related to the information in question. Different types of information, and the people who consume it, necessitates the use of a diversity of systems.
- The supply chain needs to be integrated beyond the strategic or commercial level. In modern economic scenarios, the competition no longer takes place between Company A and Company B, but between Supply Chain A and Supply Chain B. This means that efficiency should be pursued across the entire supply chain, which cannot be obtained with the single integration of data at the strategic or commercial level. Information integration can only be done through constant alignment of all levels of each link in the chain, from the shop floor up. Only with a continuous and efficient exchange of timely and accurate information can the supply chain operate as a whole effectively on the market.
- The ERP knows "why", while the MES knows "how to". While the former primarily supports strategic decisions, the second supports the operational ones. Who knows how to make things always works for those who know why, but who knows why must rely on people who know how to to actually turn their decisions into reality. It is an essential symbiosis required to achieve any idea.
Those are just five short reasons ERP needs an MES. Through my personal experience, I get constant confirmations of how the adoption of an ERP is much more successful if it is supported by the simultaneous adoption of an MES or manufacturing operations management (MOM).