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ERP and MES Integrations Demonstrate the Power of Industry 4.0 for Manufacturing

Every day you probably see stories about how artificial intelligence will change the world. But artificial intelligence and technologies such as the Industrial Internet of Things (IIoT) already are changing the world of business right now. The transition just is a slow one, taking place one company at a time.

Industry 4.0 is the broad term for today’s technologies applied to the manufacturing space. It encompasses AI and machine learning, the Internet of Things, cloud computing and analytics, and advanced automation that come together to make manufacturing more intelligent, responsive, and efficient.

Industry 4.0 is here right now, and a good example of its power is what happens when a manufacturer’s enterprise resource planning system (ERP) is connected with its manufacturing execution system (MES).


How ERP and MES Fit Together

MES systems manage and monitoring manufacturing operations and reporting on production line activities in real-time. ERP manages everything else related to the business and brings it all together in a company-wide system, including production, material use, delivery, shipping and other business functions such as sales and marketing, financials and human resources.

Integrated together, ERP and an MES form an integrated ecosystem that brings a holistic view of the entire company and enables a level of planning, execution and responsiveness that is far more sophisticated than anything that came before.

ERP systems give a manufacturer the data to determine what products to manufacture, while an MES integrates this data with plant floor dynamics to determine how to produce those products with less waste and more profit.

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The Power of Integrating ERP and MES Together

With a full, real-time picture of the entire business that comes from integrating ERP with MES, and the coordination that comes from it, manufacturers embrace Industry 4.0 and many of its benefits.

Some of those benefits from ERP and MES integration include:

1. Real-Time Productions Adjustments

Demand changes identified in the ERP system can be fed into manufacturing schedules to ensure quantities of products manufactured are more closely aligned with demand, and manufacturing changes can be made in real-time to meet changing customer needs. RFID tags can track goods across supply chains for greater logistics and efficient processing of raw material, and also be used on the shop floor to track work-in-progress, materials routing, parts requirements, just-in-time replenishments, and assist with managing availability and utilization of assets.


2. Accurate Demand Forecasting

With greater visibility across all parts of a manufacturing ecosystem, manufacturers that integrate ERP with MES can more accurately predict demand spikes and lulls so operations run lean and equipment is fully utilized without generating unnecessary inventory our stock outages. Analytics and artificial intelligence can assist with understanding the current market dynamics and future probabilities, and automation can assist with making adjustments to these forecasts in real-time.


3. Just-in-Time-Manufacturing (JIT)

It requires surgical precision for manufacturers to achieve just-in-time manufacturing and delivery. With ERP and MES Integration this level of precision is possible by tying IIoT sensors and analytics with real-time supply chain awareness, sales orders, inventory, factory schedules and parts availability. Digitalization and the full visibility and operational integration that comes from it turns the ideal of JIT into a functional reality.


4. Reduction in of Rush Orders

One of the main supply chain risks is rush orders. Through ERP and MES integration, manufacturers can reorder from suppliers before inventory falls below a set level and ensure that factory schedules align correctly with sales demand. This minimizes production delays, and it also prevents additional costs incurred by rush ordering materials at the last minute.


5. Easier Change Orders

Fully integrated systems lead to more efficient execution of change orders. When customers request change orders, the requests automatically can flow into the MES and update schedules and material needs to match the changes in production. Similarly, shop floor dynamics, new manufacturing processes or supplier changes can flow seamlessly into the ERP for automatic updates on pricing and delivery.


6. Enhanced Manufacturing Quality

MES and Manufacturing ERP integration delivers the real-time visibility for quickly spotting manufacturing defects both in materials and finished products, and tracking them throughout their lifecycles. Real-time notifications can trigger from IoT sensors that suggest corrective action, and production workflows and ordering can adjust dynamically based on defects. Defective materials or products can quickly be identified in the warehouse, engineering plans updated automatically, equipment taken offline for service, and product recalls accurately managed when quality issues are spotted after shipment.


Embrace Industry 4.0 in as Little as 30 Days

Manufacturing lags behind many industries in digital technology adoption largely because of legacy systems and a lack of awareness that the tools for digital transformation are easier to adopt than they were 20 years ago. Integrating MES with ERP and upgrading to a modern digital backend solution that enables Industry 4.0 can be a major project. But it doesn’t have to be.

Cloud ERP solutions such as SAP S/4HANA Cloud Public Edition come ready for Industry 4.0 with MES integration and digital manufacturing enabled out of the box. Manufacturers can put in place Industry 4.0-enabled ERP and MES in 30 to 90 days. With SAP’s modular design and scalable infrastructure, manufacturers also can roll out their digital transformation in stages and pay for only what they need in the moment.

Learn more about making the jump to Industry 4.0, or contact one of our experienced consultants at (801) 642-0123 or by writing us at info@nbs-us.com for more information about integrating ERP and MES for digital transformation.

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