Resource Management via MES/ERP Systems Integration (Part 2)
In this second of two articles, the benefits of manufacturing execution systems (MES), with or without a current enterprise resource planning (ERP) system, are covered in detail.
In June’s issue, we opened the topic of MES/ERP systems by discussing what they are and how they are used in today’s business climate. The majority of forge companies today continue to discuss the need to establish information integration that is coordinated and summarized among their various departments. Just to survive in the competitive business world, senior management needs to have the proper reporting tools summarizing a multitude of operations from each department in the right format and within a specific timeframe. More importantly, they should be able to rely on this information to make strategic decisions. Therefore, having the right information integrated amongst the various internal departments of the company is critical.
Do you need MES?
In today’s competitive global markets, forge business management is increasingly challenging and complex. You likely need an MES if you need greater control; compliance management; improved time-to-market; and visibility for managing product life-cycle execution with accurate instructions, real-time data and business intelligence.
If you are experiencing problems in any of the following areas, your business probably should have an MES.
- Difficulty in innovating to meet market demands
- Change-management challenges; coping with the pace of change
- Information latency; getting data too late for useful analysis
- Issues with materials/product traceability and losing paperwork
- Poor visibility into WIP (work-in-progress)
- Not meeting production schedules or achieving optimal production throughput
- Too much risk and too many errors due to manual paper-based processes
- Too many disparate systems on the plant floor; lack of a unified version of the truth
Benefits of Integrating MES with Existing ERP Software
By integrating your existing ERP with MES, your production facility achieves real-time bidirectional communication to optimize plant operations. Some of the benefits include:
- True views of production planning and supply-chain management
- On-time reporting of KPIs (key performance indicators)
- Real-time WIP and on-the-fly adjustments to work-order processing
- Material availability and consumption with automatic reorder notifications
- Immediate resolution to unplanned changes on the production floor
- Better scheduling
- Eliminate overstocking of raw materials and part inventories
- Automatic notifications of equipment maintenance scheduling
- Inability of production-floor operators to select a piece of equipment to process a job step if the equipment is down due to a maintenance order (MO) or other issue
- Automatic qualification of personnel, equipment and vendors for a particular job
- Improved quality and capturing/recording processing data and quality metrics
- Reduced scrap, rejections, re-work and production errors
- Real-time notification of process variances
- Ability to discern between positive and negative production trends
- Compliance with regulatory guidelines, customer specifications and company processes
- Reduced audit times (both internal and external audits)
It is noteworthy that if you don’t currently have an ERP system, it is still very beneficial to implement an MES system because some MES software now includes many of the functions within an ERP system (such as quoting, pricing, invoicing, CRM, etc.). There are a lot of small- to mid-sized companies running their businesses with just the MES and a third-party accounting system, and this is all they need to run a successful business.
The Role of Technology
Technology plays a key role in a society where the environment and business landscapes constantly change and in a globalized world where companies are competing hard to overcome disadvantages and gain new advantages over their competitors. Technology is also constantly changing and can be used to continually “up your game.” The proper use of technology can significantly increase productivity, efficiency, customer service and creativity, allowing businesses to compete in the digital economy of a global world with the ability to make decisions quickly and flexibly.
The proper use of technology should provide the evidence
- Integral because you can more easily manage the different processes within the company while understanding that all departments are interrelated.
- Adaptable to the specific idiosyncrasies of the company and the application because some operating processes/procedures are unique to your company’s way of doing things.
- Modular because the software functionality needs to account for the company being made up of a group of interrelated day-to-day processes that share information from the specific data that is generated via each department’s individual contributions toward the greater good of the enterprise. (Also, when installing a new system, it helps to have a modularized and tiered implementation approach over a period. Otherwise, your staff will feel like they’re trying to get a drink from a fire hose; way too much to digest at one time.)
MES With or Without ERP
Whether your business is large or small, here are several advantages of implementing MES, with or without integration to an ERP system.
- Lower IT costs (especially if run in the cloud) and improve technology efficiency with less management/administration staff, support and infrastructure needs.
- Total visibility allows total access to every important process in your business by making data from every department easily accessible to you and your senior management. In addition, the availability of all company information in a centralized location allows for increased collaboration and more streamlined completion of tasks. As you know, trying to complete important tasks with partial information is usually a waste of time. Complete visibility provides more coherent workflows and allows interdepartmental processes to be easily and efficiently tracked. All this makes it possible to make decisions with confidence because you can rest assured that you are seeing the complete picture at any given moment.
- Improved reporting and planning – Your organization would have a single, unified reporting system for every process. By having a single source of information, you can readily generate useful reports, KPIs and analytics at any time. With the business intelligence you can gain, you will no longer be swimming in data yet starving for information. These new insights aid in corporate planning by identifying both operational strengths and problem areas that need improvement.
- Customization – One of the biggest advantages of using modular software is that you can implement only those modules that the business needs, or start with the baseline modules and implement the other modules in a tiered approach once the staff is comfortable with the base module(s). Additionally, some systems allow you to turn certain database fields on or off so the data-entry screens, grid reports and online searches are customizable, so as not to clutter the screen with unwanted items.
- Improved efficiencies – Along with reduced IT costs, a properly implemented system can reduce the time and effort required by your workforce to carry out their daily activities. This greatly reduces or eliminates repetitive manual processes, fixes errors and reduces rework, thus allowing team members to focus more on revenue-affecting tasks.
- Improved supply-chain management (SCM) – When it comes to SCM, a business needs to interact with multiple suppliers and strategic-alliance partners to obtain the necessary raw materials and resources needed to bring finished goods to market. A streamlined supply chain also sets the stage for manufacturing innovations, which can help reduce costs and develop new product variations that give your business a competitive edge.
- Adherence to required specifications – The proper system can aid in the adoption and enforcement of company policies, industry best-practices, unique customer order specifications, and federal or regulatory guidelines. In some cases, it can “force” a production-floor operator to do things the right way. When implemented properly, some systems will not allow a person to cut corners, use the wrong piece of equipment in processing a job, order materials from an unapproved vendor or use a piece of equipment they are not authorized (or trained) to use. These systems can even alert a supervisor if an employee attempts to do something they are not qualified to do.
- Better customer service – Your customers also receive benefits from the utilization of the right system, even if they don’t know it. Because client information is centralized and streamlined, you have a real-time view into their order status and WIP. Some systems also allow the use of a customer portal so customers can self-serve to get their questions answered or reprint an invoice, certification statement or shipping document. At the end of the day, the number-one thing a business should be concerned about is customer acquisition and retention. Through the end-to-end real-time tracking and insight provided by a good MES, you effectuate better customer interaction from sales and marketing all the way through late-phase customer service. Also, it frees your people up from spending hours on the phone each day answering simple questions.
- E-Commerce integration – Some systems can integrate directly to your customers’ ERP system and have a work order generated directly within your MES, eliminating data-entry errors and the time it takes to enter a new order into your system. This means you may be providing a service that your competitors do not, which makes your business better able to handle web-based order processing and client interactions.
- Data security – One of the biggest advantages of a good MES is that certain data can only be created, accessed, viewed, updated or deleted by personnel that possess the proper authority. These settings can be different for each user based on what they need from the systems (and the data) to do their day-to-day jobs. Also, over the past several years it has been proven that cloud-based software solutions protect company data better than having it housed on your own server. Most cloud hosting of software utilizes tier-4 data centers, with the highest data protection and antivirus/anti-ransomware levels of protection available, while the majority of forge company IT personnel are not IT security experts. Companies just don’t want to pay what is required to build (within their brick-and-mortar walls) all the features a fully redundant data center offers, including daily backups to multiple devices, uninterruptible power supply (UPS) systems, 24/7 data-center access monitoring and around-the-clock security experts to ensure their servers (and your data) are protected through continuous incident/event monitoring and safeguards against malicious hacker attacks.
- Improved collaboration and workflows – A lot of progress can be made through better communication and collaboration amongst company stakeholders. However, human nature has proven time and again that most people don’t go out of their way to collaborate with others. By eliminating separate disjointed silos of company information, the process of collaborating with others by providing employees with access to the data they need when they need it is simplified. The interdepartmental information is funneled into one centralized location where every employee has on-demand access to the entire company’s wealth of data, which allows them to see the big picture (and everybody is seeing the same picture). In turn, this gives employees the tools they need to make proactive decisions while making them feel more valued and being “in on things.” The net effect is increased efficiency and reduced operational costs with higher employee engagement.
- No more paper trails – When compared to manual paper-based processes and other manual data approaches, an MES’ captured data quality represents a drastic improvement. This is mostly because the underlying processes used to capture the data (and the timeliness of the data-capture event) are drastically improved, so there are fewer errors and omissions.
The root of the issue of MES is data control. You can’t hope to operate an efficient and successful business without impeccable data control. It is crucial for the right people to be able to access the right reliable data at the right time. And it is equally important to prevent certain users from accessing information that they don’t need to do their jobs.
Concurrently, using mobile devices, your staff now has easier access to the information as it is needed through the use of browser-based/web-based entry points to your corporate systems. Just make sure you use a two-factor authentication during the login process to protect from unauthorized access and reduce the chance of data breach.
To ensure the ongoing success of your business, you must keep one eye on the future. All too often, businesses fail to plan properly. Some even experience serious growing pains (becoming complacent in their past successes) that pose huge roadblocks to whatever progress they are enjoying.
Having a system in place that can easily and efficiently accommodate your company’s growth is paramount. Adding new functionality to your existing systems via an MES platform –
whether you are expanding your customer base; entering new markets; rolling out new processes, departments or products; or growing your business through acquisition or other means – is not as difficult as it seems. It can have huge advantages while easing some of the current “pain points.”
Still, when you get to the essence of it all, names do not really matter. Manufacturing is full of jargon and acronyms: MES, ERP, MRP, IIoT, Industry 4.0 and all the rest. Whether an MES works with a separate ERP or accounting system, the software needs to help, not hinder, productivity. It’s about increased visibility to critical data, automating processes, improved quality, increased efficiency and improved productivity. Ultimately, information (I mean good information) needs to flow to make people’s jobs less stressful, easier and more productive.