May 14, 2024 What Manufacturers Should Ask their ERP Provider

Manufacturers can only truly understand the capabilities of an MES by identifying gaps in their ERP system.

Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) are essential technologies for today’s top manufacturers seeking digital first operations. Both solutions have the potential to play significant roles in a variety of processes, such as inventory control, product maintenance, supply chain, and quality assurance. Although the two sets of technologies can overlap and both be applied to enhance various domains, the resulting outcomes are distinct from one another. Since ERP and MES solutions can affect the planning and execution of operations, manufacturers should educate themselves on the difference between the two and communicate with their ERP providers to ensure their products can maximize yield.

ERP vs. MES

The primary difference between ERP and MES solutions is that ERP focuses on business processes, whereas MES solutions are manufacturing process focused. There is a natural overlap between these divisions of the organization, but the difference will be on how these solutions interact with distinct data sets, oversee various plant areas, and facilitate various operational transformations. 

ERP systems have been developed from the ground up to enhance and manage manufacturing business processes. A few of these foundational tasks deal more directly with transaction processing and other typical accounting tasks. As technology advances, these features also extend to other areas of the manufacturing process.

MES solutions, on the other hand, are made to directly enhance and more effectively manage production processes and provide data to help inform the business processes. MES is more concerned with reporting on the effects of the processes and data. Compared to what ERP provides, the MES has a far greater influence on the production process. As a result, routine compliance, quality control, production optimization, and material usage are more tightly managed.

Manufacturers should base their expectations for each solution on these distinctions and anticipate that an ERP Solution will provide information on order processing, material management, or labor costs. However, it is important to note that this does not represent the entire range of possibilities. The details that are given might only include data such as the order’s immediate requirements, staging, and delivery; the supply chain’s expenses and schedule for managing materials; or the labor force’s cost and payroll at the moment. 

On the other hand, MES’s narrow emphasis provides more precise and task-specific data. Additionally, the MES will offer information on labor expenses (in the form of indirect hour costs which should be considered waste), material management, and order processing. This data could be used to monitor every modification made to an order, the state and caliber of inventory materials for material management, or the training, experience, and authorization of specific operators to support labor management.

Questions to Ask Your ERP Provider

In the end, these systems function best when combined, not when one is used or preferred over the other. Below are a few key capabilities that manufacturers should ask their ERP supplier to understand what is made possible by their solutions to help decide if their ERP solution is comprehensive enough. Manufacturers can only truly understand the capabilities of an MES and determine whether to prioritize it by identifying the gaps in their ERP system.

For example, manufacturers should:

• Ensure that their ERP solutions display which personnel accomplished specific tasks and when they were completed. The solution should also indicate which parts had to be removed during assembly and why, or which sections needed to be repaired during inspection. Manufacturers must also ensure that the solution identifies which product-embedded systems initially failed tests and required troubleshooting.
• Understand that an effective MES system helps manufacturers get it right the first time by granting access to real-time digital data and integrated systems. It provides a platform for planning, executing, and tracking difficult work processes online, creating a paperless environment that drives first-time quality and immediate response to discrepancies. Ultimately, this will improve collaboration of workflows across various teams, increase operational agility, enhance material traceability, and eliminate the need for manual and paper-based processes.
• Know an MES solution undoubtedly offers more precise toolkits targeted at having a direct impact on production for enterprises looking to revolutionize their operations, although MES and ERP inherently complement each other. ERP systems receive essential information from the production-specific data made available by MES, which may subsequently be utilized to make more educated decisions about company processes.

When working through the key questions for ERP providers, manufacturers will come to find that ERP systems come with gaps and need to ask the right questions to create a seamless data flow across the value chain and product lifecycle.

About the Author:
As iBase-t’s Chief Executive Officer, Naveen is responsible for aligning organizational and departmental objectives with the company’s vision and mission statement through the implementation of strategic initiatives that result in greater organizational efficiency, rapid growth, and scalability.

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