Integrating your ERP and MES to improve operations

Advanced enterprise integration applications enable companies to leverage real-time information exchange between the business layer and the production layer to increase operational efficiency.

In the journey towards operational excellence, companies have invested a lot of money in ERP systems, but the promise of easy integration between the top floor and the shop floor has been more difficult than imagined. Companies have had to spend a significant amount to enable communication between their ERP and MES layers because these systems speak different languages, and seamless communication requires extensive translations, resulting in added time and costs.

The good news is that the communication gap is narrowing with the introduction of ISA-95, the international standard for the integration of enterprise and control systems, and B2MML, a set of XML schemas that implement the data models in the ISA-95 standard. Companies that implement solutions that take advantage of these accepted standards can more easily integrate their disparate systems and gain better visibility and coordination between the enterprise and execution layers.

This article discusses the challenges today’s manufacturers need to overcome and the benefits of enabling real-time bidirectional integration between the ERP and MES systems to optimise plant operations.

The negative effect of information silos

There are a number of challenges that today’s manufacturers face that hinder them from understanding what is happening on the plant floor as well as with customers and suppliers. The disparate nature of multiple systems across the enterprise makes it difficult to respond to changing customer demands and to achieve faster time to market and tighter inventory management - all of which contribute to efficiency and cost control across the supply chain.

Lack of visibility to the plant floor

Manufacturers need to understand problem-causing events and view them holistically instead of in isolation, as the lack of integration and visibility into the plant floor causes delays in decision making.

Management needs to know what is happening on the plant floor while manufacturing needs up-to-date information on demand changes to help develop and optimise their schedules. Information at the enterprise layer gives manufacturers the ability to see ‘the big picture’ and to make the appropriate changes based on what is happening on the plant floor to improve the overall efficiency of the operation.

Lack of integration of disparate systems

ERP systems know what customers want, and MES systems know how to build it. However, these systems have often been created by different software vendors and, as such, speak different languages. Many manufacturers have resorted to entering data in multiple systems, or to inventing their own ways of communicating between these systems - both very costly and inefficient models.

Manufacturers need the ability to communicate seamlessly between these systems so they can gain visibility into orders, control inventory costs and act on up-to-date order changes - critical factors for improving their operations.

Slow time to market

As the global marketplace has evolved, some companies have not been able to react quickly to the changing demands of consumers who are working at internet speed and who have a wide variety of vendor choices. By communicating between the enterprise layer and execution layer, companies can better match supply with actual demand - reducing inventory and responding quickly to customer needs.

High inventory costs

Excess inventory - whether as raw materials, work in progress, or finished goods - ties up cash in the business that can be put to better use elsewhere. Businesses face the challenge of not being able to detect when inventory falls below a predetermined level so they can reorder from suppliers as needed.

Keeping inventory to a minimum frees up capital and also reduces the risk of having unwanted inventory on hand. If there is a quality or maintenance issue on the floor, real-time notification to the business layer can be made, enabling immediate action to address the issue. Enabling flexible integration between MES and ERP To achieve operational excellence, manufacturers need increased visibility from the top floor to the shop floor with the ability to view the status of orders, inventory changes and overall process performance. Seamlessly connecting manufacturing processes with the enterprise layer requires a tightly integrated yet flexible solution that leverages the latest technologies and standards. Software applications such as GE Intelligent Platforms’ Proficy Open Enterprise can connect a company’s ERP system such as SAP to MES solutions, using ISA-95 and B2MML standards to communicate valuable information between the two systems. As a single integration point, this allows decision makers at the enterprise level to leverage real-time information about production processes - providing increased visibility and insight for better business decisions - and for plant operators to leverage business information to improve fulfilment.

Such solutions can drive operational excellence and lean manufacturing by greatly improving visibility and efficiency while reducing costs due to factors such as excess inventory or waste. For example, any issue on the plant floor that may affect customer fulfilment can be communicated to the ERP system so steps are taken to mitigate the issue. Real-time notification can help correlate supply with demand - averting the need for a higher level of inventory than necessary and ensuring responsiveness.

The benefits of utilising ISA-95 and B2MML integration standards

Companies today need operational flexibility and quick implementation. Due to the challenge of high inventory costs, they can no longer afford to maintain a large safety stock of finished goods inventory on hand, which is essentially tied up cash that can’t be used to grow and run a business until it is sold. Excess inventory should be avoided at all costs and at all levels - raw material, work in progress and finished goods.

Solutions that support ISA-95 standards provide ease of integration and allow systems at different levels to communicate with each other without the need for costly custom set-up or maintenance. The use of standards enables the exchange of information to flow freely from the enterprise level to the manufacturing execution level, which is critical as it allows companies to avoid costly issues such as excess inventory.

Supporting ISA-95 models

The following ISA-95 models are important for ERP-MES integration.

Production schedule

The ERP system sends the production schedule to the MES system. Based on this schedule, the MES system creates a detailed production schedule of its own that accounts for limitations and other activities that the ERP system has no knowledge about - such as cleaning of vessels, changeovers, equipment downtime, order sequencing and plant capability.

The production schedule sent by ERP can be for a certain period (such as a week). Within this schedule are multiple production requests, for example, “create 90,000 cases of beer”. Within these production requests are details on how the products should be created, specifying the personnel, equipment and materials requirements.

The ERP system downloads the production parameters, which help define what is to be created and the impact it will have on capability and resources within the plant.

Production performance

The production performance model contains information that Level 3 (MES) sends back to Level 4 (ERP) as a result of the production request sent down from ERP. The production schedule contains the product requests, while production performance is a response to those requests. For example, maybe production only had enough inventory to produce a percentage of the requested products, or maybe more material was used than expected due to bad material.

In this case, the enterprise layer needs to know this information to control inventory and to order more material when necessary. This consumption information helps the business understand what is actually being used and can help identify waste - as well as determine the optimal timeframe for reordering inventory so that there is not too much to trap cash or too little to risk halting production.

The production performance contains such information as the actual production completed, material consumed to complete production, personnel, and the equipment used. Other information can also be contained within the product response, such as comments from the operators. A production response may also include the status of the request such as the percentage complete, finished or aborted - providing the enterprise layer with visibility into what actually happened on the plant floor compared to the initial request.

During production, the MES can respond to the ERP system with incremental updates on the progress of an order. This allows the business layer to understand the status and to verify whether the order will meet customer delivery requirements. Once a production schedule is downloaded from ERP to MES, the MES system can respond with an order confirmation to the ERP system to communicate that the order has been received and is queued up for production.

Supporting B2MML

While not all solutions support B2MML (Business to Manufacturing Markup Language) standards, which are an XML implementation of the ISA-95 standard, those that do offer additional flexibility and easier communications - particularly for companies that want to leverage their existing ERP investments. The standards make it easier for businesses to integrate with their MES solutions regardless of what type of ERP system they have (such as SAP or Oracle), ensuring that the data can be processed and enabling communication across the business.

Single point of connectivity

In addition to standard translations, it is extremely important to have a single point from which information can be shared between the ERP and MES systems, as well as routed to other applications across the business. Having a central point enables information to be routed wherever it needs to be shared, driving true integration and visibility from the top floor to the shop floor, which, in turn, allows for better and more timely decision making that impacts operational performance.

At the enterprise level, users have insight into what is happening on the floor - raw materials, work in progress, finished goods inventory, status of orders. By knowing this information in real time or ahead of time, companies can limit their safety stock and as a result free up cash from their operation. They can better optimise their schedules without needing more equipment or personnel.

The visibility into the manufacturing process gives business managers the opportunity to improve processes that will give them an advantage in the marketplace.

Summary

As companies strive to achieve operational excellence, enabling interoperability between business and manufacturing systems is critical for success. Connecting the ERP and MES layers can help companies optimise plant operations and improve profitability by increasing visibility into their real-time operational data for material consumption, performance reporting, real-time schedule execution and other supply chain and enterprise-level functions.

Advanced technology solutions that support ISA-95 and B2MML standards enable companies to leverage real-time operations management data and synchronise information and activities between their plant and business systems. Providing bidirectional integration for a deeper understanding as to what is happening on the plant floor improves decision making at the enterprise level and enhances execution capability at the plant level.

Features of ISA-95: International standard that does not change with each new release from a vendor Defines the information that must be exchanged between the ERP and MES layers Has a broad support base of many companies Technology and vendor independent