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Manufacturing Execution Systems are a vital link
MES is helping firms to build up a holistic view of the enterprise-wide
IT system by blurring the dividing line between shop floor systems and the rest
of the organisation, says anand chatterjee
Companies have realised that they need to integrate their various IT systems
like distributed control systems (DCS), ERP, business intelligence (BI), advanced
process controls, customer relationship management (CRM), collaborative production
management (CPM), engineering and design software and supply chain management
(SCM) systems to enhance earnings and increase operational efficiency.
This is all the more important for organisations that have undergone mergers
or acquisitions as they generally tend to have many different types of IT systems
in place. Well integrated IT systems will help the companies to quickly respond
to the changes in the market place and help them to harvest the opportunities
thrown up by the changing economic and business scenarios. According to an industry
estimate more than $300 billion to $500 billion in annual value could be gained
by enhancing process industry performance.
Most firms in the process industry already have DCS and ERP in place but all
these years they have worked and served the organisations as independent isolated
systems with little or no interaction between the two. Companies are increasingly
realising that the effectiveness of these systems, which of late have reached
saturation, can be increased by integrating the two systems and making them
work in a symbiotic environment. Though Manufacturing Execution Systems (MES)
have been around for quite some time they are being increasingly used in the
process industry to bridge the gap between the DCS and ERP.
The need
Competitive pressures are making it necessary to have low inventories, short
cycle times and quick order execution. As a result there is a need for online
real-time flow of data across the organisation, spanning across all business
functionalities like production operations, order management, financial operations,
planning and scheduling, etc. This need is being addressed by MES, which tie
various applications like ERP, DCS, CRM, CPM, SCM, etc., into a single integrated
seamless system.
Vital link
These organisation-wide systems (MES) are used to manage and keep track of production
schedules, inventory status, work in progress and a range of other operations,
management-related information flowing to and from the plant. If implemented
properly they monitor, initiate, respond and report on each of the primary production
activities of a plant, collect and process data, enable quality management,
improve resource allocation and enhance maintenance management. The diagram
shows how MES acts as a link between the ERP system and the plant automation
system (DCS). In reality though, the scenario may be complex.
So, in a typical business case, the Order Management Module of the ERP system
generates sales orders when the customer places the order. To fulfil the order
ERP would then generate the production batch and pass on details like product
type, quantity and due dates to the MES. If sourcing of raw materials is required
then suppliers are informed through the SCM system. This information is updated
in the ERP. After the purchasing is done the MES would then schedule the use
of resources so that it can efficiently manage resources and supervise the production
system operation. MES monitors the process automation and the production systems
operation through the DCS and passes the information to the ERP, which updates
the information. When the production is over the finished product is shipped
to the customer. Thus MES helps the enterprise in maintaining low inventories,
reducing cycle times and quick order execution by co-ordinating various activities
and acting as an important link between the DCS and the ERP.
ERP and MES provide complimentary functionalities. Some functionalities that
are provided by MES but may not be present in an ERP are:
- Real-time product tracking.
- Real-time quality management.
- Real-time shop floor and production metrics.
- Real-time WIP tracking.
- Real-time waste tracking.
- Real-time plant operational management.
All these data may be updated in the ERP, which will definitely enhance the
decision-making capabilities of the enterprise.
Hurdles
Like other enterprise solutions, implementing a MES solution is not an easy
task and is not without its own set of challenges. The following is a list of
some of the issues that need to be kept in mind while implementing a MES.
- Legacy systems and different vendor platforms.
- Which information to be shared.
- Format of data and Information to be shared.
- Organisational issues that may arise due to integration of systems and
sharing of information.
Evolving system
As is true for any IT solution, MES is also evolving. With the advent of new
technology and by incorporating new management concepts MES of late has become
a powerful tool for the enterprise to maintain the much-needed competitive edge.
MES is helping firms to build up a holistic view of the enterprise-wide IT system
by blurring the dividing line between shop floor systems and the rest of the
organisation.
The author works as a consultant in the Technology Advisory Services (TAS) division
of PricewaterhouseCoopers. He can be contacted at anand.chatterjee@in.pwc.com.
The views expressed in the article do not necessarily represent the views of
PricewaterhouseCoopers
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