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Should MES replace ERP in the era of Digital Manufacturing?

Posted by: Arvind Malhotra On August 16, 2016 02:09 PM facebook linked in twitter


As enterprises move into the Smart/Brilliant Factory environment, they will be faced with some tough choices on ERP/MES integration and “who is on first” syndrome.

Over the years industrial companies have evolved with the implementation of  myriad automation platforms, with ERP being the more dominant and expensive system.  ERPs have traditionally been IT/Finance driven while MES(Manufacturing Execution Systems)  has been more shop floor driven. The ERP is the “Why” and the MES is the “How”.  ERPs capture time data in days & months and MES in minutes & seconds.

Businesses have spent millions of dollars trying to integrate the two for years; the famous term ‘shop floor to the top floor’ is the mantra for industrial customers.

MES Businesses

Digital World

One option for manufacturing/industrial customers is to spend significant dollars integrating the ERP and MES implementations.  The task has become more objective with the introduction of international standard for integration of enterprise and control system like ISA-95. Another international standard, B2MML gives a set of XML schemas that implement data models for ISA-95. Subsequent product releases do not interfere with the integration as well. All this has led to significant reduction of costs in bringing together these two solutions to work in harmony.

One could argue about the need for two systems for core manufacturing functionality in the digital world.  Assets in factories are going to be hyper-connected, real time analysis and edge computing will be the order of the day. In this scenario, MES can become the core system for manufacturing, including supply chain, planning and feed transaction data to in-memory computing platform like HANA/Hexadata for financial reporting.

I would recommend that if there is green field implementation, the company starts with MES as the core and adds technological components as the business demands. In more mature organizations that are moving to a smart/brilliant factory approach, master data should be maintained in the MES and ERP upgrades and customization should be limited. If the investment in ‘in-memory’ compute platform is justified, then the ERP would become obsolete in a few years.

The POV could be radical and I am sure the ERP software companies may not be very pleased. However, the digital world is enabling disruption and it is better to disrupt then get disrupted.

What do you think? Share your thoughts - in digital format only.

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