Manufacturing execution systems (MES) -- the systems that sit between control equipment on the shop floor and the transactional systems that run the business (chiefly ERP) -- have been around
Manufacturers have used MES software since its inception to gather production data about what is being made in the shop today and then propagate the updated and cleansed information to the ERP system. MES can greatly improve shop floor data management by accessing, tracking and sharing real-time production data -- functions that most ERP systems cannot perform.
Manufacturers are refocusing on MES for three reasons. The first is the increasing need for track-and-trace and product-genealogy applications in the wake of a rash of product recalls and tainted goods in verticals such as food/beverage, pharmaceutical and consumer-packaged goods. Regulations compliance is the second driver of increased interest in MES. The third reason is its relatively low cost compared with ERP.
"There is a mandate to control shop floor processes globally and be sure you are using a process that is of quality, to specification and will not end up in a recall," says Simon Jacobson, research director for AMR Research.
Jacobson has even heard of a manufacturer installing an MES in order to win business. The large company was anxious to gain deep visibility into its orders, something made possible only with the tight process control afforded by MES. Beyond compliance, MES can bring manufacturers benefits of increased efficiencies, greater accuracy, higher throughput and improved quality.
Finding cost savings with MES
Relatively low cost is the third reason that MES is riding a wave of renewed popularity. "MES is 20% of the cost of an ERP implementation," says Dan Miklovic, research vice president, manufacturing, for Gartner Inc. "MES projects are much smaller and more easily justifiable in today's economy."
According to Roy Wildeman, lead manufacturing analyst at Forrester Research, MES spending has remained robust compared with other types of enterprise software. "The MES value proposition is more about efficiencies and cost-cutting as opposed to growing revenues," Wildeman said. That is a powerful message to executives who are still on a quest to squeeze costs as much as possible.
Determining whether MES is right for you
MES adeptly bridges the gap between ERP and the factory floor. "ERP systems don't have automated data collection and [shop floor] integration," Wildeman said. "If you're trying to peer down to the shop floor and see what is happening, without MES you would have to do complex integration and scripting. That's expensive. ERP is not designed to do sophisticated real-time computing."
According to Jacobson, companies need to look at the characteristics of their operation to determine whether MES is a fit for them. "If they have intense control operations, they need an MES," he said. "But a very low-volume, low-complexity operation will not need MES as much."
Standardizing manufacturing processes with MES
Large manufacturers are beginning to deploy MES across the enterprise, bringing process standardization across plants, as opposed to using different applications in different corners of the world. Small and midsized manufacturers can also benefit from standardizing processes.
"Standardizing processes allows you to pool capacities across your manufacturing plants," Wildeman said. "This can give you flexibility" and better responsiveness to changing marketplace demands.
MES promises faster ROI than other types of systems. "Within three months of going live, companies will see dramatic reductions in scrap and rework, increased throughput, better overall value," Jacobson said.
Over time, you can tie MES to your product lifecycle management (PLM) systems. According to Jacobson, this will help manufacturers as they design higher-quality products from the ground up. Once they achieve a high degree of control over their shop floor processes, they can open that information to important customers and increase their customers' satisfaction levels.
About the author: Lauren Gibbons Paul writes often on manufacturing technology issues. She can be reached at firstname.lastname@example.org.