June 17, 2019 MES or ERP: Points to Consider

New technologies to help manufacturers better address the needs of their customers.

June 17, 2019

The technology is dominating our lives, no matter if we talk about our daily routine or business operations. The domain of manufacturing, despite being regarded as the traditional one, is subjected to technological changes as well. It would be silly for industrial software providers to miss that opportunity as, after all, the industry and its revenues volumes are enormous. According to the Bureau of Economic Analysis, manufacturers contributed as much as whopping $2.38 trillion to the economy of the USA in the fourth quarter of the last year.

Nowadays, this new way that paves the way for the industry is called Industry 4.0, and modern manufacturers are increasingly using the concept of the Internet of Things (or simply IoT). The report by The MPI Group claims that about 31% of production processes and 30% of equipment and non-production processes already contain smart device/embedded intelligence.

Why using technology

The difference between enterprises that use Industry 4.0 technologies and the ones that don’t is the same as between people using a calculator and ordinary abacus to calculate. The introduction of new technologies allows businesses to remain competitive in the market as they have more opportunities:

• it is easier to introduce new elements;
• it’s possible to experiment with products;
• and quickly test prototypes.

Previously, the development of new products and their launch into mass production took a long time (months, and even years), but modern technologies have significantly accelerated this process. However, although this technology allows you to create products (including those with complex geometry, within a few hours and without the use of molds, directly from a mathematical 3D model), the overall digitalization is a technology associated not solely with the technological part itself.

The principles and methods of Industry 4.0 allow manufacturers to better address the needs of their customers. By experimenting with samples of real products, it is possible to modify them quickly. In addition, digitalization makes enterprises open: manufacturers can monitor the productivity of individual production sites, analyze the entire technological chain as a whole, tighten the weak links that stand in the way, thereby increasing the overall efficiency of the enterprise.

MES or ERP

It has long been arguing which of the systems — MES or ERP — should establish itself as the dominant software system in the production environment. The concept of Industry 4.0 recognizes that the functionality of both MES and ERP will remain indispensable in production management.

A more likely scenario is an ever greater convergence of systems, due to which the line separating corporate and manufacturing IT systems is blurred. If previously there were separate systems, now we are talking about combining them, which will provide additional benefits. This way, it is not surprising that within the Industry 4.0 you can observe the emerging trend of using both ERP and MES.

At the same time, the general transparency of production allows manufacturers to pay attention to losses (electricity, labor hours, etc.) in due time, which increases the productivity of the enterprise. Let’s observe a vivid example from the life of a plant producing cables.

At the beginning of the production line, the operator establishes a mechanical part that determines the thickness of the conductive wire and the winding. The operator may easily be mistaken because the difference between such details doesn’t strike the eye if you define it on the spot. This error will lead to the production of several kilometers of cable only to be thrown away later. The introduction of digital control makes it possible to immediately identify this oversight and stop production without waiting for the loss of time and labor.

Returning to the issue of prototyping, I would like to note that it’s not only about increased productivity, but also about the adaptation of the enterprise to the production of new products.

If, say, twenty years ago, the transition to the new products’ release required lots of human and time efforts, now it is much easier to introduce new parts and change existing ones, adapting the production line to the release of a new product and even wishes of a particular customer. Moreover, it is possible to produce only half of a finished product and transfer the final part closer to the customer (and the corresponding installation site). Besides, industry 4.0 ensures the efficient exchange of data between distant objects.

The question is it possible to assert that modern hardware is ready for operation in the conditions of the industrial Internet and as part of digital enterprise management systems? After all, as of today, plants operate a lot of equipment from various companies like GE, Siemens, Yokogawa, and Emerson.

As you’re reading this article, chances are several thousand new devices are being connected to the Internet, and by 2022, there will be around 50 billion of them. Of course, with the explosive growth of technological innovations (and not solely industrial solutions – a significant part of them are user or commercial applications) it is simply impossible that a single company will dominate the market.

At such a scale, both large and small industrial software/hardware development companies will have a shot to success. Today, their venture may still not exist, but tomorrow they will enter the market with a cheap and simple sensor or software application that will suddenly solve many data collection problems.

About 63% of manufacturers think that applying IoT to products will increase profitability over the next 5 years. No wonder they are ready to invest $267 billion in IoT by 2020. Of course, there are plants with completely outdated equipment and a large set of systems from different manufacturers but is not so important because the integration of information flow occurs at a higher level.

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