Unlock The Full Potential Of ERP Through MES Integration

Wednesday, October 25th, 2017

Complementing an enterprise resource planning (ERP) system with a manufacturing execution system (MES) offers several opportunities to increase the return on investment through better supply chain visibility and decision support, increased business agility, higher operational efficiency and asset performance, and more. Keith Chambers Director, Operations & Execution Systems, Schneider Electric Software shares more.

Food and beverage companies face an increasingly competitive market, shrinking margins, shifting consumer demand and increasing regulatory burdens. In an effort to remain competitive, more food and beverage manufacturers have adopted advanced software solutions such as Enterprise Resource Planning (ERP) systems to standardise and optimise operational business processes.

While implementing these systems, it is important to note that Manufacturing Execution Systems (MES) may appear to serve a similar purpose, but in reality, these systems are different and can actually be highly complementary within an organisation.

By implementing MES with ERP, MES not only offers a detailed production and traceability record with advanced analytics of plant and asset performance, but it can be instrumental in the digital transformation of operational processes.

An MES system extends the value of ERP by providing real-time visibility to production order status and inventory levels for better business decision support, planning and collaboration across the organisation. It secures local access to mission critical schedule and specification data for operational activities and production control, and can also provide plant business continuity for 24/7 operations in case of ERP unavailability, such as during maintenance or program update cycles.

This level of integration, collaboration and workforce empowerment enables optimised operational efficiency that lets food and beverage companies better capture the complete benefit of a digital transformation. 


The Real-Time Benefits Of MES


ERP and MES both leverage information technology to standardise and optimise operational processes—both systems even have a certain overlap in functionality. However, they differ in their functional design for serving different enterprise hierarchy levels and operating at a different time and data resolution.

An ERP is an Information Technology (IT) that is a system of record, so it helps to standardise long and short term planning and management of resources, finances and master data across the enterprise (or a region)—ultimately recorded in a company’s financial statements and reports.

By contrast, an MES is an Operations Technology (OT) that enables agile, short-term production planning including job execution order and resource allocation, and helps to efficiently perform and accurately document manufacturing operations in real time, for one plant or for multiple plants as part of a multi-site enterprise.

A basic difference between an ERP and an MES is the real-time orientation of an MES, necessary when managing a production process or workflow. An MES is designed for an up-to-date picture of production and inventory in resolution of seconds or minutes, providing operators with the current shift schedule, job instructions, bill of material information and performance feedback, typically handling a few days of production planning.

In contrast, an ERP deals with planning horizons up to months or even years. Both systems meet where production planning has to be turned into physical execution—here is where both systems’ resolutions overlap.

This overlap is necessary to synchronise data and information on short-term planning and product specifications (production request) as well as production status and results, including related usage of resources (production response). This task of data exchange and synchronisation is typically facilitated by interfaces and methods for vertical plant-to-enterprise integration from both sides.

The level of real-time resolution is particularly critical for the food and beverage and CPG industries. These sometimes highly automated and fast moving processes benefit from an MES which is able to capture a complete electronic record of product, material flow, production, quality, logistical transactions; additionally this system captures all unplanned events such as short equipment stops and failure by integration with the plant control systems.

Implementing an MES designed for integration with the automated process allows food and beverage and CPG companies to increase the return on these assets to further reduce cost, safeguard quality, and maximise operational efficiency and to increase asset utilisation and sustainability.


MES Complements An ERP Beyond The Real-Time Aspect


While the real-time orientation of an MES is an excellent foundation for extending the value of an ERP system investment, the complementary nature of an MES goes beyond its ability to quickly capture data, helping manufacturers to increase operational efficiency.

For instance, MES allows for production optimisation through finite scheduling and secondary planning optimisation based on a more granular model of plant resources, and its greater flexibility to respond faster to unplanned events.

Digitisation of processes leads to the elimination of error prone and inefficient paperwork on the shop floor, which then reduces the amount of non-value add activities for operators. Set-up and changeover procedures for both physical plant equipment and processes can be facilitated through standardised set-up configurations for equipment, recipes, process and procedures.

Further, a detailed electronic record and genealogy increases the accuracy and reduces the cost of regulatory compliance, helping to reduce risks and improve the responsiveness if tasked with managing a recall. Streamlining anything to do with a regulatory compliance issue—or preventing one—can have a profound impact on manufacturing productivity, performance and output.

Access to real-time production data and timely feedback of production and inventory status changes to an ERP system also has benefits that extend well beyond the plant floor—real-time data can be leveraged to improve supply chain visibility, ultimately impacting decision support so managers and staff can make better decisions, backed by data, to help drive operational excellence across operations and the extended supply chain.


Data-Driven Decision Support And Continuous Improvement


Because an MES offers accurate real-time production data, it is an invaluable tool in the continuous improvement process. An MES accurately and reliably represents the status of all production and inventory in quantity and quality, resources and asset utilisation, and adherence to plan at any given time. It offers a single version of the truth that enables collaboration between decision makers across different functional domains to optimise processes to reduce cost and to make better business decisions.

The historical data collected by manufacturing operations and persisted by an MES offers an additional ROI opportunity while providing new insights into operational performance. This allows businesses to drive deeper into the factors that are truly driving plant performance through KPI monitoring, reporting and advanced analytics. Access to these advanced analytics facilitates the continuous improvement process, enabling improved plant performance.

As an example, when New Belgium Brewing’s facility was reaching production capacity, the brewery implemented an MES system. The MES allowed the company to identify the causes of unscheduled downtime and react accordingly, enabling plant operators to reduce downtime by more than 50%. In just over two years, the facility’s Overall Equipment Efficiency (OEE) increased from 45 percent to 65 percent.


Enforcement Of Business Rules


Integrating an MES with ERP lets organisations implement a rigorous enforcement of business rules. Real-time orientation means better responsiveness to any request for information used for operational control, decision making or other related activities. Examples includes verification of a material ID using RFID or barcode scanners, quickly downloading large sets of set-up parameters to a control system or providing notifications of quality non-conformance and business or quality rule violations to operators.

Such responsiveness in verifying rules and specification data helps to increase production throughput, accelerate product changeovers and ensures products are manufactured to the right, most current specifications. The ability to trigger rapid responses to planned or unplanned events, digitalisation of standard operating procedures, and notifications of events with contextual information will help reduce waste and losses by eliminating delays and speeding up the processes for taking preventive or corrective actions.


Plant Business Continuity


Larger enterprises often use one instance of ERP (or at least have a goal to end up with one) for multiple manufacturing plants across a region. An MES and the right enterprise integration strategy allows for local plant business continuity, even when the ERP is temporary not available or cannot be connected due to WAN communication issues. Setting up the synchronisation between the ERP and the MES so that the MES maintains a production plan, related master data and production orders for a defined timeframe, allows for autonomous plant operations.

To keep both an MES and ERP system synchronised, the plant production response to the ERP system must be guaranteed. This can only be achieved by an enterprise integration strategy that includes buffering of all production response messages in case of ERP unavailability. This strategy orchestrates the sending of buffered production response information, to allow uninterrupted production until ERP connectivity has been restored.

As a result, the role of an MES is to contribute to a loosely coupled but highly reliable solution, ensuring plant business continuity. This enables plants to continue operating with 24/7 business connectivity—maintaining the revenue stream and the return on assets generated from the plant—even if the ERP is unavailable.


Maintaining ERP Standardisation Benefits


Many food and beverage manufacturers have grown through mergers and acquisitions, and from single-site locations to national or international businesses. These companies are now equipped with multiple production plants across regions for producing the same, similar or variations of similar products, often leading to a highly heterogeneous plant system landscape and varying practices for similar operational activities and business targets.

Note that this same challenge will often apply to ERP deployments as well, resulting in multiple ERP instances, which can be a highly complex set of systems to standardise and aggregate effectively.

Some of the challenges that these global organisations face, especially after each acquisition or divestiture, include standardisation of global best practices for operational performance, sustainability and quality, the need to develop business-wide scorecards and KPIs for transparency in cost, capacity and inventory and meeting growing global regulatory compliance needs and consumer demand for transparency.

As if matters were not already incredibly challenging, these same organisations also face tight margins, planned future cost cuts, and the need to reduce their future cost of ownership by operating at increasingly lean levels. This combination of a need to reduce complexity, increase integration and systems performance and a continued need to cut costs drives programs to share best practices, measured by consistent KPIs across the enterprise.

These enterprises need to transform to a broader view of manufacturing operations to make use of new, unique opportunities on a business wide basis. Global food and beverage companies are increasingly becoming connected enterprises, expanding visualisation and accessibility of information to drive business agility while accelerating innovation.

The primary enabler of consistent digital transformation is the enterprise-wide standardisation of operational processes. Digital strategies and the use of information technologies to integrate, control, and automate operational processes and related data collection can have a profound impact on transforming an organisation to operating with greater operational excellence, agility and performance.

Despite the fact that physical attributes of manufacturing plants often vary across an enterprise, process design and execution can be standardised as a strategy to achieve a common way to monitor and measure data that can be converted into intelligence for decision support and performance improvement, implemented across each manufacturing location.

This is a role that an MES is uniquely suited to fill. A modern MES and operations management software platform enables a unified digital representation of a plant with regards to information and process models that can be adopted across the enterprise. This gives organisations the ability to manage and support operational activities based on MES software application functionality, with adaptability to people, physical processes and systems to execute standardised processes.

An alternative approach to execute upon this strategy is to attempt to define process improvements within ERP, and then change ERP configurations and workflows every time a new process improvement is identified. Those familiar with what it takes to perform repeated changes in an ERP will understand that this strategy is not really a viable option.


Conclusion: MES As An Enabler To Digitally Transform Operations


As food and beverage companies face an increasingly complex and globally competitive marketplace, it is critical these manufacturers take advantage of every opportunity to gain competitive advantage by improving agility, reducing cost burdens or achieving better collaboration and sharing of best practices.

By integrating an ERP with an MES system as a combined strategy and solution, manufacturers can maximise their return on investment in both systems—optimising their operations to increase recipe agility, improve asset reliability and ensure the highest levels of quality and regulatory compliance are achieved.

Even a partial success on this expansive list of strategic objectives can make a significant difference in organisational performance and customer satisfaction and, take you and your organisation a big step forward on your digital transformation journey.