ERP and manufacturing execution system (MES) integration is a relatively new concept. But in recent years ERP has extended its reach to manufacturing applications that are also within MES' bailiwick,
MES software typically manages production orders on the shop floor, collecting information on what materials are used, process parameters and errors. It compiles a detailed record of how something was built and how well.
An ERP system models a product and the materials that go into it from an accounting point of view. It does little tracking, said Bill Swanton, a vice president at AMR Research who specializes in the business value of IT: "It will send a message down to a production line: 'Here's an order, go do it, then tell me when you're finished."
When setting up a data flow between these two systems, companies need to determine a division of labor that ensures that each system does what it does best and that there's no conflict from "trying to do the same functions on both systems," Swanton said.
The logistics of ERP and MES integration can be tricky, however. For one thing, the staff members assigned to the ERP system often take a proprietary attitude about what elements should be on their system.
"You need to clearly define the rules, or you may have a fight about what gets modeled on what side of the interface," said Swanton. "Where people get into trouble doing integrations is if they can't agree what system is supposed to do what."
When systems are integrated correctly, ERP ensures that product lines have the right materials in place, that the right things are built from the right orders and that costs are managed. MES keeps track of how products are built and what materials are used and maintains records that will prove useful should there be questions, complaints or even lawsuits down the road.
For example, the ERP system passes orders to MES, which reports high-level information back to ERP about what materials are used, the percentage of products scrapped, and labor and machine time associated with production. This workflow can be a significant time saver, since MES measures costing parameters directly, instead of requiring employees to manually file time cards to create the same data.
According to Swanton, companies should limit information exchange to what's needed for collaboration when linking ERP and MES systems.
"There might be 30 steps in making a product, and you would pick three major points at which to send data to ERP, so it can do cost accounting and inventory valuation," Swanton said. "It doesn't need nuances of how the product is actually built. The main message is: Keep it simple."
About the author: Elisabeth Horwitt is a freelance journalist who has covered business IT trends, issues and technologies for over twenty-five years. She is based in Waban, MA.