MES: When ERP is not enough - Part II
August 07, 2013
ERP and MES Integration- In “MES – when ERP is not enough” we've discussed the pros and cons of the ERP as a solution for Manufacturing firms and its relative shortcomings against the MES. Today we will visit the scenario where an MES has been chosen by a manufacturer and is being employed with or without being integrated with the ERP system.
We have already established that an MES is used by an organization when it requires data granularity, real-time data, process metrics, tight integration of process activities, better visibility and agility. Now let us consider a scenario where an MES and an ERP exist, but remain isolated from each other. In the scenario where both systems are being used, but remain separate, the organization would suffer some obvious losses. If both the systems remain separate, a time delay will be built between them. When an order is placed by a customer it is reflected in the ERP, but the production floor remains un-aware of it till it is communicated to them via e-mail or paper-based order form. Such delays cause a ripple effect adding to the over-all cycle time of order completion. Other functions which are adversely affected are Materials Management/Purchase, Inventory Management/Warehouse, Maintenance and Quality. However, rather than discussing the drawbacks of keeping the two systems isolated in detail, let us consider the advantages of integrating them.
The idea of using ERP and MES revolves around the belief that the systems would integrate the entire operation of the organization and keeping them isolated from each other obviously undermines the objective. ISA, the International Society of Automation, has defined standards regarding the structuring of MES and its integration in a larger company-wide IT architecture. ANSI/ISA-95, or S95 as it is more commonly referred, addressed Enterprise and Control System Integration which defines a layer model looking at the integration aspects between ERP, MES and the production control level. This standard has been developed for global manufacturers in 1995 and was developed to be applied in all industries. The standard provides the basis and means to integrate the two systems using ISA95 interfaces, XL, MII or other such interfaces.
In the previous article we had considered the example of a Textile manufacturer, XYZ, which produces bath towels, rugs and shower curtains. We had established that ‘XYZ’ uses an ERP for conducting its daily operations. Now we will consider a scenario where they employ an MES with the existing ERP. When both the MES and ERP are integrated the most important benefits that are obtained can be classified as enhanced visibility, greater agility, lower cycle time, better quality and reduced inventory & equipment down-time. These benefits are derived from the active communication between the two systems. When orders are entered into the ERP system of XYZ, by their customer, the production function is aware of it and can start planning for the same instantly, enhancing the visibility. Similarly all activities of the production/procurement team including the production scheduling and raw material requisition is reflected to other functions such as Marketing and Sales. Not only the visibility is enhanced, but also the overall performance increases significantly.
The improved visibility along with tighter integration also makes the organization more agile, as it can respond better to contingencies. For example, if a customer wants to change the delivery schedule or increase the order quantity, all functions are aware and can then plan and respond collectively in real-time. Also when data regarding materials, inventory and product trees are shared from the ERP to MES, it enhances production activities and gives a clearer picture to the manufacturing function. Similarly data regarding the WIP and finished production form the MES helps functions like Purchase and Logistics plan their activities more efficiently.
Another massive advantage of MES and ERP integration is for functions like Maintenance, Quality Control and HR. Maintenance data from the MES, particularly usage based triggered by resource or material transactions, allows other departments to know which equipment would be down in the coming days or hours, helping them respond better to customer pressure and enhances over-all job scheduling. Quality audits and inspection related information from the ERP allows the manufacturing to be prepared for such events. Equipment related information and information from the SPC module of the MES allows the Quality function to zero in on the root cause of Quality issues and eradicate them. The HR function can use this integrated platform to their benefit and use the information generated by both the systems in performance appraisals of employees in all other functions, and better integrate functionality such as training and certifications.
So in total, the integration of the two systems has the potential of greatly benefiting the organization and acting as a comprehensive enterprise-wide automation and integration platform. Such a handshake adds greater value by making the entire operation more robust, fool-proof, secure and proactive, while enabling implementation of global strategies using IT and its collaborative architecture as a major differentiator.
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