ERP & MES: Addressing The Differences, Your Requirements, & Integration Possibilities

Numerous new systems contribute to manufacturing digitalisation, including MES and ERP - Manufacturing Execution and Enterprise Resource Planning Systems. These systems are sometimes used interchangeably, but their functionalities are different.

We will explain the key distinctions and similarities between ERP and MES to help with your selection - whether to have one system or integrate both.

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Similarities & Differences In ERP and MES

Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) systems are essential solutions for manufacturers but have different functions. It's important to understand these distinctions to optimise your production operations. Let's dive in.

1. What is an ERP?

An ERP is the backbone of a manufacturing business as it integrates multiple functions such as accounting, human resources, inventory management, and sales. The system creates a single source of truth for all operations data, making it easier to allocate resources effectively and make smarter decisions.

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ERP’s scope of features

Critical advantages of ERP for businesses:

  • Higher operational productivity: Thanks to operation-wide data visibility and streamlined processes, ERP enables quicker response times and fewer manual errors.
  • Improved financial management: With real-time financial data, users get more accurate forecasting, cost control, and budget allocation.
  • Better customer service: With more efficient stock management and order processing, businesses can pick, pack, and ship faster, making customers more satisfied.

Learn more about ERP-specific features across diverse business functions:

2. What is an MES?

MES systems provide a specialised perspective of manufacturing production. It offers control over the manufacturing process as well as real-time production data. Specifically, the system helps manufacturers keep tabs on labour, material consumption, equipment performance, and quality control.

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MES’s scope of features

Critical advantages of MES for businesses:

  • Greater production efficiency: With real-time data, MES helps manufacturers quickly identify and resolve bottlenecks and create a smoother production flow.
  • Higher product quality: MES contributes to producing higher-quality products by tracking errors and enforcing quality control procedures.
  • Enhanced compliance: MES makes it easier for manufacturing firms to comply with industry rules and quality guidelines.

3. Differences in ERP & MES core features

Although manufacturers can benefit from both ERP and MES, the systems have different focuses on business. ERP provides an extensive viewpoint that highlights data integration and resource management throughout the entire organisation. MES, however, focuses on the factory floor by providing real-time control and optimisation features of manufacturing processes.

For a comprehensive overview, we have listed out the key distinctions between ERP and MES as below:

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Key distinctions between ERP and MES

The right option for your firm depends on the specific requirements you have. An ERP system would be perfect if your top priorities are more efficient processes and organisation-wide data visibility. However, an MES system will be the better option if your all-time focus is production control and shop floor efficiency.

In many cases, businesses have discovered that the most complete solution is to combine an ERP with a MES. This integration solution offers a comprehensive perspective of their operations from planning to execution.

Addressing Your Needs For ERP or MES Adoption

Although there could be some overlap in features of MES and ERP, their key advantages are different. Let's go through several typical goals that manufacturers set for implementing MES and ERP. These can help identify your own system adoption goal and decide which suits your needs.

Read more: Manufacturing Digitalisation for Smarter Operations.

1. 7 Common goals for ERP adoption

ERP systems provide an integrated system for optimising every aspect of business operations and addressing challenges that affect the entire organisation. The following are typical objectives manufacturers pursue when adopting an ERP:

Operational efficiency

  • Streamline workflows across departments
  • Exclude redundancies and bottlenecks.

Inventory control

  • Gain visibility into stock levels across warehouses and production lines
  • Reduce stockouts and carrying costs.
  • Optimise purchasing decisions.

Financial control

  • Automate financial processes (accounting, budgeting, forecasting, etc.).
  • Improve cash flow management and profitability insights.

Sales & order processing

  • Integrate CRM for better order tracking and communication
  • Speed up order fulfilment, improve customer satisfaction and repeat purchases.

Supply chain efficiency

  • Gain visibility into procurement, supplier performance and deliveries in real-time
  • Reduce supply chain disruptions.

Scalability & adaptability

  • Implement a system that can accommodate future expansion and process adjustments.

Collaboration across departments

  • Break down departmental silos
  • Better communication and collaboration between departments.
Read more: ERP - The Core of Digitising the Shop Floor.

2. 7 Common goals for MES adoption

MES systems provide real-time production oversight and control with a strong focus on the shop floor. Here are prominent objectives that manufacturers accomplish by implementing MES:

Production efficiency

  • Optimise resource allocation, scheduling, and workflows
  • Minimise downtime and maximise output.

Capacity planning

  • Get insights into production capabilities
  • Enhance planning and resource allocation.

Maintenance management

  • Execute predictive maintenance and monitor equipment performance
  • Schedule maintenance activities proactively.

Product quality

  • Gain real-time quality control and reduce defects
  • Ensure consistent product quality.

Production lead times

  • Streamline production processes
  • Speed up order fulfilment and reduce delivery times.

Workforce productivity

  • Optimise staff’s work procedures with real-time data and tools

Regulatory compliance

  • Provide detailed production records and audit trails.

Is Your Business Ideal For ERP & MES Integration?

1. Assessing your existing systems

Case 1: If you already have an ERP, evaluate the production management features of the ERP system you are using. Here are a few specific points to think about:

  • Production planning features: Does your ERP provide comprehensive production scheduling, which includes work orders and BOM generation? Is it compatible with scheduling software to ensure effective resource allocation?
  • Inventory control: Does your ERP include extensive features such as lot tracking and multi-warehouse management? Does it create precise forecasts and optimise inventory levels according to production schedules?
  • Shop floor data: Does your ERP record shop floor data such as machine performance and production progress? Or does it just process orders and manage inventory?

Case 2: You’re using an MES. This system focuses on shop floor optimisation, but is it running separately from other software? Think about:

  • Data fragmentation: Does your MES system share data seamlessly with other departments, such as finance, sales, or inventory? Due to this data fragmentation, your business realises inefficiencies and reduced visibility in your operation.
  • Limited data: Does your MES system have limited reporting capabilities? Your teams barely receive any insightful data to make better decisions at all levels. 
  • Unscalable: Is your MES scalable enough? An out-of-date MES turns into a bottleneck when your production grows.

2. Which cases need ERP & MES integration?

The following business cases are typical ones that demonstrate the effectiveness of ERP & MES integration:

  • Complex production procedures: ERP & MES integration delivers a smooth data transfer between planning, scheduling, and production execution. Users can make adjustments in real-time in response to changes in demand and material updates.
  • Aspiring to lean manufacturing: The integration makes it easier for just-in-time inventory management by syncing production schedules with shop floor data on material utilisation in real-time.
  • Globally dispersed operations: Integration offers a centralised view of manufacturing activity across multiple sites. This enables more efficient logistics and inventory control.
  • Looking to increase customer satisfaction: Integrating ERP with MES allows manufacturers to offer precise delivery estimates and real-time production information from the MES.
  • Unclear and siloed data: ERP and MES integration removes data silos across different business functions. This fosters transparency and more data-driven decisions throughout the whole organisation.

By considering your existing systems, operational goals, and the potential benefits highlighted above, you can determine if ERP & MES integration is the right move for your manufacturing business. Remember, a well-integrated ERP and MES system can offer significant improvements in production efficiency, product quality, and business performance.

Get Started With Custom Integrations

Evaluating your implementation goals and existing systems will help to decide if ERP and MES integration is the best initiative for your manufacturing company.

If you're thinking about an ERP implementation or integration, make sure you know what you need first. We have extensive years of experience with ERP solutions and working with businesses across Australia, New Zealand and the Asia Pacific. Let us help analyse your business and plan for strategic digitalisation.

ERP & MES - Frequently Asked Questions

1. What do ERP and MES mean?

An ERP (Enterprise Resource Planning System) is the backbone of any business, integrating multiple functions such as finance, human resources, inventory, and sales. MES (Manufacturing Execution Systems) provides specialised features to optimise manufacturing production with real-time production data. 

2. What is MES vs ERP vs PLM?

In general, PLM (Product Lifecycle Management) software is responsible for technical decisions, ERP is for strategic operational decisions, and MES is for manufacturing operational decisions:

  • ERP focuses on organisational resource planning.
  • MES is built for the execution of manufacturing-focused processes.
  • PLM refers to the process of managing the life cycle of a product.

3. How is CRM different from MES?

MES (Manufacturing Execution System) is designed to streamline every aspect of your manufacturing procedures. However, CRM (Customer Relationship Management) systems are built to optimise and nurture the communication between your business and customers. A CRM system can be used alone, or integrated/built-in within an ERP.

Want to learn how Havi can help you implement the ERP Software?

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