Businesses need to track and manage core processes to understand how they are performing and where they can improve. Business information technology systems like manufacturing execution systems (MES) and enterprise resource planning (ERP) systems help businesses automate processes, coordinate the flow of data between processes and provide the information business managers need to proactively optimize operations. But despite the fact modern ERP systems grew out of early manufacturing systems, today there are key differences between what MES and ERP systems do. This article explains those differences and, more importantly, how they can be integrated into a single ERP to streamline and consolidate operations and help a business become more agile and efficient.
What Is an MES?
A manufacturing execution system (MES) is software that enables a business to track, monitor and collect data about its inventory and production processes. An MES uses sensors — sometimes thousands of them — and tools like barcode scanners to provide real-time data about production-floor operations, including the movement of inventory as it progresses from raw materials to finished goods. An MES provides a functional layer between enterprise resource planning (ERP) and process control systems, giving decisionmakers the data they need to make the plant floor more efficient and optimize production.
Anyone involved in production, from plant managers to process engineers and operators, are primary users of an MES. By monitoring manufacturing data across the entire production cycle, an MES provides those business managers with the real-time data visibility they need to evaluate production performance and make decisions that reduce cycle time, cut costs, increase productivity and reduce waste.
Industries that must adhere to strict regulations, such as food and beverage or pharmaceutical manufacturers, use MES solutions to enable traceability and quality compliance by tying the ERP to the manufacturing floor system. But many other types of industries use MES, too. An MES may offer different features depending on its software design, but a typical solution enables real-time data collection, production analysis and the ability to track employees’ productivity and quality of work.
- An MES is an IT solution that collects, tracks and monitors manufacturing data across the entire production cycle.
- By improving visibility into the production cycle, an MES provides a business with the data it needs to make informed decisions that can improve production performance.
- ERP systems integrate information from all of a business’s operational and finance departments — including manufacturing — into a unified central database.
Benefits of an MES
No two MES solutions are exactly alike, but they’re all integrated into factory machinery so that they can collect real-time information in support of manufacturing operation management practices. As a result, a good MES provides a complete picture of how the factory floor is performing. An MES can also maintain records and highlight exceptions, so plant managers can quickly identify problem areas. These insights allow a business to make changes to its production line so it can run at its highest potential, making the best use of factory assets, materials and labor.
With the information insights provided by an MES, a company can pinpoint and resolve quality and productivity issues and bottlenecks, streamline order flow and production execution and improve inventory management, ultimately raising quality and productivity, reducing costs, decreasing lead times and increasing delivery reliability. It can even help identify the causes of unplanned downtime.
Thinking further, the data gathered by an MES is a crucial prerequisite for organizations interested in starting to apply recent artificial intelligence (AI) advancements in manufacturing.
Differences Between an MES and an ERP
ERP systems are integrated software suites that business managers can use to run virtually every aspect of their organizations — including manufacturing. In fact, ERP grew out of early manufacturing resource planning (MRP II) systems, which in turn had evolved from earlier material requirements planning (MRP) systems. Once manufacturing operations were instrumented for real-time data collection and management, businesses began to consider the potential benefits of collecting data about all of their operations.
With an ERP system, business decision-makers can manage all aspects of their operations from a single, seamlessly integrated system with a central database at its core. An ERP system’s unified view of enterprise data allows the company to automate business processes and generate insights across multiple departments, enabling managers to identify process improvements and drive efficiencies.
An MES focuses more narrowly on the manufacturing operations of a business, supporting production and inventory decisions and feeding into warehouse automation. An MES can be standalone software, or it can be a component of an ERP system.
Additional differences between an ERP and an MES include:
An MES’s exclusive focus on factory-floor operations provides detailed control of, for example, production scheduling and manufacturing quality. It also allows for real-time collection of more in-depth production data, which translates into better product traceability and optimization of manufacturing resources and operations. Thus, as its name implies, a standalone MES is all about better management of manufacturing execution. But it can share the production information it collects with a properly integrated ERP system, adding to the pool of data senior managers can leverage for making business-wide decisions.
And that’s the key point about ERP functionality: It’s far broader than MES, encompassing virtually all aspects of a business’s operating, finance and accounting processes. Accounting and finance are the core functionality of modern ERP systems, which may also have a dozen or more add-on modules that businesses can mix and match depending on their individual requirements. Most ERPs have modules for managing procurement, order management, warehouse management, supply chain management, human resources (HR), customer relationship management (CRM), marketing automation, ecommerce and even manufacturing. Because the models share a common central database, an ERP gives decision-makers the ability to dig into each part of the business and tie data together in ways that can help the business assess where it needs to improve and how it can become more financially or operationally sound in the future.
Data Capture and Delivery
Another difference between an ERP and an MES is the way each system captures and uses data. With an MES, manufacturing data is captured in real-time — via sensors, barcodes, data feeds or data entry from production floor personnel — and reports are available immediately. Real-time monitoring and action are critical because manufacturing is an immediate process, so changes must be made promptly to affect that process and ensure each job is completed correctly and efficiently.
With an ERP, data also is collected in real-time, but it remains relevant over a longer period. The data can be analyzed right away to better manage various business processes but with less time sensitivity than is required on the shop floor. And it can be compiled and analyzed again, over time. HR information, for example, remains relevant for years, as does customer data.
What Triggers Actions
An MES is driven by manufacturing events. Tracking and analyzing those events in real-time enables an MES to assess how the manufacturing process is working and prompts those who use the system to determine where modifications can be made to improve the manufacturing process.
An ERP is driven by transactions or events within each module. For example, the finance and accounting module is driven by actions that occur within accounts payable or accounts receivable, while the procurement module is driven by the purchase of materials or products the business needs to manufacture and/or sell goods.
MES systems are typically integrated directly with machines on the factory floor for real-time monitoring. Through the use of sensors or other inputs, such as barcodes, data feeds and data entry from production floor personnel, data is delivered to the end user of an MES instantaneously.
ERP systems integrate with other software systems used within the company, from CRM systems to marketing and HR systems, when a company chooses to use standalone applications for those purposes. Alternatively, using the modules for those purposes available with a mature ERP solution eliminates the need for that type of integration.
Integrating MES and ERP
For manufacturing companies that use standalone MES solutions, integrating them with their ERP systems provides significant advantages. With MES-ERP integration, companies can coordinate production activity with supply chain management, inventory, sales and customer service, leading to more accurate demand forecasting, more efficient inventory management, better cash flow and, ultimately, improved customer satisfaction. Companies that choose an advanced manufacturing ERP module will have a natural integration advantage. For example, during a manufacturing run, the MES module can update the status of goods-in-progress and track output against forecasted production. The module can also provide a real-time picture of the shop floor, capturing information on items in progress and finished goods. This is more challenging to achieve when integrating disparate standalone systems.
Ready to Take Your Operations to the Next Level?
Integrate Your MES With a Best-in-Class ERP: NetSuite
NetSuite’s Enterprise Resource Planning (ERP) is a cloud-based system that automates core business processes and provides real-time visibility into operational and financial performance. With a single, integrated suite of applications for managing accounting, order processing, inventory management, production, supply chain and warehouse operations, NetSuite ERP gives companies clear visibility into their data and tighter control over their businesses.
Organizations that have already deployed an MES can integrate it with NetSuite’s ERP. But unlike some other ERP systems with less capability, NetSuite also offers a manufacturing module, so there’s no need to purchase a separate MES. NetSuite’s manufacturing module helps manufacturers track, monitor and collect data about production operations and get the most up-to-date information from across the entire production cycle. It offers both a traditional barcode scanner-based interface, designed for speed of data entry, and an interactive tablet app, which features a rich interface that provides unparalleled feedback about what's happening in the user's work center and/or machine.
Tracking manufacturing and business processes manually is difficult and time-consuming. Today, MES and ERP systems enable businesses to easily track and automate their processes, providing them with key data they can use to improve visibility and efficiency and exercise tighter control over the business. Integrating MES and ERP systems is crucial for most manufacturing businesses. While some choose to purchase an ERP system and MES system separately, others find value in ERP systems that include a manufacturing module. By integrating ERP and MES, a business can streamline and consolidate its systems and operations, obtaining a unified view of data from manufacturing to HR, CRM, finance and accounting.
MES and ERP FAQs
Do you need an MES if you are already using an ERP system?
An ERP is an integrated suite of software applications that business managers can use to run almost every aspect of their organizations. An MES focuses on managing manufacturing operations. If your ERP includes a manufacturing module to track, monitor and collect data about manufacturing operations across the entire production cycle, then you don’t need both.
What is the purpose of MES?
An MES integrates with factory machines to collect real-time data, enabling a business to track, monitor and collect information about its manufacturing operations across the entire production cycle. By improving visibility into the production cycle, an MES provides a business with the data it needs to make informed decisions that can improve production performance. An MES provides control of manufacturing processes and data on elements that affect production processes and efficiency.
How do MES and ERP work together?
An MES can be standalone software or it can be one of the modules that feeds into an ERP. Integrating the two is important to manufacturing businesses because it enables coordination of production activities with inventory management, logistics and even sales and customer service. Further, it provides a unified view of data that encompasses all aspects of the business, from manufacturing to planning, operations, finance and accounting.
What is the difference between SCADA, MES and ERP?
A Supervisory Control and Data Acquisition (SCADA) system monitors equipment and interaction between field devices to enable local and remote monitoring of industrial plants. A SCADA system has the advantage of executing its functions efficiently and quickly with remote access. An MES tracks and collects information about each product through all stages of the production process. An ERP is an integrated suite of software applications that business managers can use to run almost every aspect of their organizations. An ERP may include an MES module, or an MES can be standalone software.
What is the difference between MES and MRP?
An MRP (material requirements planning) system handles inventory and supply management. A business would use an MRP to estimate quantities of raw materials, maintain inventory levels and schedule production and deliveries. An MES is software that monitors factory machines in real-time, enabling a business to track, monitor and collect data about manufacturing operations for each product through all stages of the production process.