Many MES projects are introduced along with the installation of a new ERP (Enterprise Resource Planning) system. So what are the differences and connections between ERP and MES systems?
Analysis of ERP and MES Concepts
I. What is an ERP system?
ERP (Enterprise Resource Planning) is a management platform built on information technology (operational and maintenance information in enterprise production provided by MES) and using a systematic management approach to provide decision-making and operational tools for enterprise decision-makers and employees.
ERP systems integrate information technology with advanced management concepts, becoming the operating model of modern enterprises. They reflect the demands of the times for enterprises to rationally allocate resources and maximize the creation of social wealth, and have become the cornerstone for enterprises to survive and develop in the information age.
II. What is an MES system?
AMR describes it as "a shop floor-level management system situated between upper-level planning and management systems and lower-level industrial controls." The Manufacturing Execution Society (MESA) defines MES as: "MES optimizes the entire production process from order placement to product completion through information transmission."
When real-time events occur in the factory, the MES can react and report them promptly, and guide and process them with current, accurate data. This rapid response to changes in status enables the MES to reduce non-value-added activities within the enterprise, effectively guide the factory's production processes, thereby improving the factory's on-time delivery capabilities, material flow performance, and production return on investment.
MES also provides mission-critical information about product behavior within the enterprise and throughout the entire product supply chain through two-way direct communication. In short, MES is a management information system oriented towards the shop floor production process, situated between the upper-level planning and management system and the lower-level control system.
Currently, all process enterprises internationally, as well as domestic industries such as petrochemicals and steel, widely use the MES+ERP model to plan and develop enterprise information systems.
In-depth understanding of ERP
We can define it from three levels: management philosophy, software products, and management systems.
1. Management Philosophy
It embodies the idea of managing resources across the entire supply chain;
It embodies the principles of lean manufacturing, concurrent engineering, and agile manufacturing;
It embodies the idea of prior planning and in-process control.
2. Software Products
It is a software product that comprehensively applies information industry achievements such as client/server architecture, relational database structure, object-oriented technology, graphical user interface, and network communication, with ERP management concepts at its core.
3. Management System
It is an enterprise resource management system that integrates enterprise management concepts, business processes, basic data, human and material resources, computer hardware and software.
The initial application of information technology in management was quite simple, mainly involving the recording of data for easy retrieval and aggregation. Now, it has evolved into a cross-national, cross-enterprise operational system built on the global Internet, which can be roughly divided into the following stages:
A. MIS System Phase
The main functions of an enterprise's information management system are to record large amounts of raw data and support querying and summarizing.
B. MRP Stage
An enterprise's information management system manages product composition. Leveraging computer processing power and the system's ability to manage customer orders, inventory, and product structure, it calculates material requirements planning based on customer orders and product structure lists. This achieves the management goals of reducing and optimizing inventory.
C. MRP II Stage
Based on the MRP management system, the system adds management of enterprise production centers, processing hours, production capacity, etc., to realize the function of computer production scheduling. At the same time, it also incorporates financial functions, forming a closed-loop management system with computer as the core in the enterprise. This management system can dynamically monitor the entire production process of production, supply, and sales.
D. ERP Stage
With the advent of ERP systems, computer-based enterprise management systems have become more mature, adding functions such as financial forecasting, production capacity management, and resource scheduling adjustments. These systems support enterprises in achieving comprehensive JIT management, quality management, production resource scheduling management, and decision support, becoming a platform tool for enterprise production management and decision-making.
E. ERP in the E-commerce Era
The maturity of Internet technology has enhanced enterprise information management systems' ability to share information and exchange data directly with customers or suppliers, thereby strengthening inter-enterprise connections and forming a mutually beneficial survival chain, reflecting the supply chain management philosophy for enterprises to achieve competitive survival. ERP systems correspondingly implement these functions, enabling decision-makers and business departments to collaborate across enterprises.
It is evident that the application of ERP can effectively promote the modernization and scientification of existing enterprise management, adapt to the increasingly competitive market demands, and its implementation is an inevitable trend.
ERP Functional Modules
ERP includes the following modules: basic management, supply chain management, financial management, production management, human resource management, customer relationship management, and office automation.
1. ERP is not a workshop-level product.
Although ERP systems include production execution functions, no ERP system currently can update its functionality every time a unit is produced.
The interpretation of "real-time" differs between workshop production systems and ERP systems: ERP interprets it from the perspective of typical enterprise strategic management, while MES is a real-time concept of the production process.
The production system needs to function as a seamless whole, meeting the ever-changing needs of customers, regulators, suppliers, and internal employees. This is clearly a better fit for the concept of MES (Manufacturing Execution System).
2. Minor changes in ERP can have a significant impact.
The impact of strategy and market changes at the ERP level is almost 10 times greater than that at the production level. Therefore, a dedicated production system should be built to manage changes in output and production speed during the production process.
3. The information provided by ERP differs from the information required by production personnel.
Employees with different needs not only require different information, but also need that information presented in different ways. Traditional ERP project interfaces are designed for analysts and decision-makers. In production departments, where changes are faster, these changes should be presented even faster.
In the production process, outdated static data is typically not analyzed; instead, ongoing information and trends are analyzed. Different positions require different types of information, and therefore the system presents this information in different ways.
4. The supply chain needs to be integrated at a strategic or business level or higher.
Today, competition between companies is no longer just between two companies, but between two supply chains. This means that improving efficiency requires not only strategic or business improvements, but improvements across the entire supply chain.
Information integration can only begin at each level, starting from the workshop level. Only with timely and accurate information flow can the supply chain operate efficiently.
5. ERP knows "why," while MES knows "how."
The former is used for strategy formulation, while the latter pertains to the operational level. Those who know how to do things work for those who know why, and those who know why need those who know how to implement their ideas. This is a very important interdependent relationship.
These are five reasons why an ERP system needs MES. A successful ERP system requires the support of both MES and MOM (Production and Operations Management).
Relationship between MES and ERP
1. ERP: Enterprise Resource Planning. Primarily addresses the planning-level management issues of manufacturing enterprises, including overall finance and supply chain. It's a management system mainly focused on finance, sales, purchasing, inventory, and production planning. Originating in the United States in the 1950s, it was first introduced to China. It solves planning-level management problems for manufacturing enterprises.
2. MES: Manufacturing Execution Management System. It primarily addresses management issues at the execution level during the production process in manufacturing enterprises.
This management system primarily focuses on production scheduling and allocation for limited production capacity, timely collection and monitoring of output data during the production process, process management, quality management, and equipment management. It originated in North America and other relatively developed manufacturing regions about 20 years ago, and has only been introduced to China within the last 10 years.
3. The relationship between the two: From an operational management perspective, a manufacturing enterprise needs an ERP system (finance + supply chain management) at the planning level, and even more so, a MES system (production execution management system) at the production process level.
The two systems complement each other, without contradiction or overlap. Only by effectively integrating these two systems can a manufacturing enterprise truly achieve closed-loop control and efficient management from the planning to the execution level, thereby enhancing the enterprise's overall information management level.
Integration of ERP and MES in manufacturing enterprises:
The Value of MES (Manufacturing Execution System)
1. The MES (Manufacturing Execution System), which originated twenty years ago, was designed to solve production process management problems for manufacturing enterprises. Currently, the use of MES systems to address production process management is widespread among most foreign companies. Domestically, foreign-invested enterprises and large enterprises are also in the early stages of adoption.
2. The characteristic of traditional production process management is that production is carried out "from top to bottom" according to a three-level production plan. ERP integrates the company's existing production resources and compiles production plans, which can reach a maximum of two levels of production planning.
SFC or DCS (Production Control System) solves the problems of automated production and control of specific production equipment. ERP services target the planning level of an enterprise and generally do not provide direct and detailed support for workshop and process-level workflows.
The main function of field automation systems is to monitor the status of field equipment and process parameters. They can provide on-site statistical data to managers, but they are not true management systems and lack effective integration and data sharing with ERP planning systems.
3. A disconnect has emerged between the ERP system and the production site automation system in terms of management information, making it impossible to achieve the integration and management requirements for production scheduling and data collection at the production workshop process level.
4. The MES system perfectly serves as the information link and data management mechanism from planning to execution, enabling manufacturing enterprises to achieve complete closed-loop control from the planning layer to the execution layer and ultimately to the control layer. This optimizes the enterprise's production management model, improves production efficiency, reduces overall manufacturing costs, and enhances the enterprise's profitability and market competitiveness.
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