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Five steps to an effective ERP-MES integration

Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) solutions have been at the forefront of manufacturing for several years. Despite this, both technologies have tended to coexist, rather than integrate their data, insights and business intelligence.

As businesses increasingly rely on these technologies to remain competitive, and as the technologies themselves become more advanced, manufacturers are waking up to the advantages of integrating their MES with their ERP. Integration has the potential to enable closer collaboration across the whole business. However, making this integration work is not simple - only the manufacturers that can transform their corporate culture will really reap the benefits.

A recent study from BearingPoint has claimed that a correctly deployed MES system will become a strategic necessity for those manufacturers that are paving the way towards a digital future. 88 per cent of the companies surveyed said they expect MES to become increasingly important, with almost three-quarters planning to invest in the technology within three years. BearingPoint’s study suggests that the emerging popularity of MES systems is due to their ability to act as a bridge between enterprise resource planning (ERP) technologies and machine controls. Indeed, the integration of these systems allows manufacturers to digitise processes and gain fast access to vital data such as lead times, stock levels and profits.

MES is a market force to be reckoned with – especially when it’s integrated with ERP. The steps below explain how to make this possible.

Step 1: Evaluate how you use ERP

For many manufacturers, when they first implemented ERP, the goal was to drive cost savings. The goalposts have since shifted, and ERP now plays a major role in promoting business growth. It does this by making it possible to share data quickly and effectively across the business; facilitating cross-departmental cooperation and reducing the ‘silo mentality’ that has previously been synonymous with the shop floor versus management manufacturing structure.

Today's ERP systems offer comprehensive collaboration capabilities, providing tools for social collaboration on a project-by-project basis. They are also accessible via mobile devices and provide visual analytics to simplify decision-making. Because of this they make it easy for manufacturers to react to change and adapt to specific customer requirements; ultimately aiding new business development. Evaluate what you currently use ERP for, and think about what you want to achieve with your ERP solution before you start to implement anything new.

Step 2: Educate corporate management about the value of MES technology

It’s not uncommon for senior management to be unaware of the tremendous business benefits they can derive from MES solutions. In many cases, the technology is regarded only as a tool in day-to-day manufacturing processes – essential, yes – but not strategic. However, MES actually has the potential to transform production into a “business centre of excellence.” Those companies that understand this are the ones that will become market leaders in the future, so it’s important to educate your senior managers.

The core components of MES include statistical process control (SPC) and statistical quality control (SPQ). These components enable production control to predict and visually track what needs to be done in terms of production, in order to keep up production levels, maintain quality and optimise plant productivity.

MES can provide predictive, preventive maintenance capabilities and improve "just-in-time" responsiveness for less downtime, less waste and higher product quality. With consistent, accurate metrics, MES shows which systems are operating under average and which are performing above average, in order to optimise the use of machinery and avoid bottlenecks. As a result, the production rates and profitability of existing plants can increase. Manufacturers gain a clear understanding of what is needed where, and when, making the best use of materials and machinery at all times.

Step 3: Develop a business case for the ERP-MES integration

While the business benefits of ERP and MES solutions are undisputed, it is necessary to develop a business case for integrating the systems - here are a few points to consider.

Firstly, manufacturing companies that integrate ERP with MES obtain a holistic view of their business processes. They benefit from production data for better operational control and as a result they can maximise the efficiency of their production. The "single voice" of the integrated systems delivers accurate data for production and management. This data visibility allows for precise scheduling, planning, monitoring, procurement and cost accounting.

In addition, the integration provides accurate reports, converting data into a consistent, bidirectional information environment. With this, users get metrics on delivery dates, labour and material use. They also get business intelligence as a result of close networking and instantaneous feedback between their ERP and MES.

Step 4: Encourage a cultural change

Before investing in MES and ERP systems, manufacturing companies need to define their objectives for integrating two systems, which may previously have been entirely separate entities. One of the hurdles in this process is the fact that both systems may have previously been owned and operated by different divisions - MES by management and ERP by the IT and finance department.

It is therefore important that all parties collaborate during the integration, in order to understand the opportunities, goals and outcomes. Often a cultural change within the company is necessary for this type of collaboration to take place.

Step 5: Use digital transformation as a competitive advantage

In markets that require a high rate of responsiveness, MES data can help management to better understand the causes of gains and losses to foresee developments, evaluate alternatives and act accordingly. Investment in ERP-MES integration is therefore only a technical investment at first glance. However, in the long run it’s actually a strategic move.

With the digital landscape constantly evolving, and with manufacturers rushing to embrace big data, mobile technologies and the Internet of Things (IoT), the time is rife for these technologies to be integrated in a way that will improve business processes and provide competitive advantage.

In today’s fast-paced environment, competition and opportunity can arise at any moment. The key is for manufacturers to be able to take advantage of this. Having integrated MES and ERP technology in place can make this possible; providing data visibility and facilitating collaborative business decisions.

Check out our ERP hub for everything that businesses need to know about Enterprise Resource Planning.

Steve Winder, regional vice president UK and Ireland for Epicor

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