In this comprehensive guide, you'll learn everything important about Manufacturing Execution System (MES) solutions and understand which different MES software architectures exist. We'll cover the core functions and present the benefits, applications, and primary users. The interaction between MES and ERP systems will be fundamentally examined before we conclude with guidance on successfully implementing MES software.
A Manufacturing Execution System (MES) is an information system that monitors, documents, controls, and optimizes the entire process chain for manufacturing products in a production facility, from origin to finished product in real-time. Manufacturing companies significantly improve their efficiency and product quality by implementing MES systems that enable seamless integration of production processes. MES information systems are primarily used by production departments, but also by adjacent departments (logistics, work preparation, lean production and continuous improvement, maintenance, quality, etc.) as well as C-level management.
Modern MES apps for smartphones particularly allow management to access critical real-time information from production. As a functional layer between machines (OT level) and administration or Enterprise Resource Planning "ERP" (IT level), MES software provides management with data needed for timely decisions, real-time transparency, and process optimization.
Manufacturing processes are information-controlled through an MES. The control, monitoring, and automation of shop floor processes are carried out digitally in a contemporary manner. The constantly growing requirements regarding profitability and flexibility, as well as changing production environments, make an MES essential. Competitive pressure motivates improvement in profitability, i.e., increasing efficiency, productivity, quality and delivery reliability, avoiding waste, and reducing costs.
Manufacturing processes are information-controlled through an MES. The control, monitoring, and automation of shop floor processes are carried out digitally in a contemporary manner. The constantly growing requirements regarding profitability and flexibility, as well as changing production environments, make an MES essential. Competitive pressure motivates improvement in profitability, i.e., increasing efficiency, productivity, quality and delivery reliability, avoiding waste, and reducing costs.
Another motivation for using MES software comes from legal and/or customer requirements that demand complete documentation of the manufacturing process - especially for safety-relevant products. Occasionally, the term MES and its scope are incorrectly applied; for instance, subfunctions like Production Data Collection (PDC) or Machine Data Collection and Production Metrics (MDC) are already being referred to as MES.
MES solutions with a classical client-server architecture represented the market standard for many years. The advantages of MES products based on cloud architecture and utilizing new cloud technologies have been increasingly gaining market acceptance since 2020.
A report by Data Bridge Market Research predicts that the global MES market will reach revenue of $39.67 billion by the end of 2029.
In practice, three MES hosting architectures can be distinguished:
MES software that has been on the market for some time as a client/server system and has been functionally developed over the years. Installed in a data center within the end user's company premises.
This is essentially a traditional MES, as described under on-premises MES. However, hosting here occurs on cloud infrastructure outside the company.
The most modern form of MES, specifically designed and optimized for use in cloud environments. It uses microservices to enable more flexible, scalable, and resilient production control and monitoring.
Cloud-native MES information systems offer enormous advantages! As Software-as-a-Service (SaaS), the MES is immediately available, easily adaptable to needs, globally scalable in-house, and cost-effective within a software subscription framework - comparable to Microsoft's Office365.
With traditional on-premises and cloud-hosted MES information systems, high upfront investment costs (CAPEX) are incurred, followed by ongoing costs for operations and software maintenance. Several months typically pass between project start and initial use.
In this section, we'll discuss what fundamental benefits MES solutions can offer. The relevance of each benefit aspect varies greatly depending on the company, industry, process, and user. As mentioned initially, the overarching goal is for companies to become more competitive by reducing costs, improving product quality, and increasing customer satisfaction.
Through transparency and real-time analysis, an MES helps increase production performance, production efficiency, and specifically Overall Equipment Effectiveness (OEE). Large amounts of data, such as performance, availability, quality including process values, are automatically collected and analyzed in real-time. OEE (Overall Equipment Effectiveness) is the most important production metric for manufacturing companies, as it's the only metric that combines the three critical factors of availability, performance, and quality in one value, thus directly revealing optimization potential in production.
MES provides detailed data and analysis of production performance, helping decision-makers make informed decisions. Learn more about this modern business management approach in our blog article "Operational Excellence – A Comprehensive Introduction."
Improvement based on real-time quality data and digitally recorded error causes during the entire manufacturing process. Sequential or mass errors can be prevented or immediately identified. This reduces the risk of costly recall actions and waste. Resource consumption is noticeably reduced through active traceability.
A methodology that manufacturing companies often use for quality improvement is Six Sigma. Additionally, the MES supports shop floor management by enabling seamless communication and real-time coordination between manufacturing teams and the management level, which is essential for an agile and efficient production environment.
This can be achieved through automated notifications from the Manufacturing Execution System to Enterprise Resource Planning (ERP) regarding produced pieces, waste, and quality. Thus, administrative departments like logistics or purchasing can always know the production progress and what quantity of materials is still needed. Through these interfaces and gain in transparency, the "Work in Process" inventory (WIP) can be better managed, resulting in savings in manufacturing, transport, and storage areas. Inventory monitoring, which is still partially done manually, can be almost entirely saved.
Through digital worker guidance, production orders with their operations and activities can be provided digitally at all work steps, sometimes also linked with manufacturing aids. Printing entire order papers can be saved.
Through the data available in the MES based on time, order, product, or serial number, a digital product life file can be created in the MES, containing all relevant information such as processing times, process values, or machine states as well as quality data, and can be used when needed for analysis of traceability and proof of the manufacturing process.
The VDI Guideline VDI-5600 describes the 7 core functions of an MES as a foundation for operation on almost any type of facility. These should be integral components of today's manufacturing system, although modern SaaS services no longer require a monolithic system. A modern MES also acts as a production control system that optimizes detailed planning and control of production processes and ensures comprehensive control over production processes.
Handling of work inventory considering prevailing production restrictions.
Timely and needs-based provision of technically functional operating resources.
Timely and demand-oriented supply and disposal of production with materials, as well as managing circulating inventories (materials outside inventory-managed warehouses = WIP).
Providing personnel with suitable qualifications for the production process in a timely manner. Personnel-related capacity data (e.g., weekly working hours/shift schedule) must be considered.
Event-driven collection of data from the process. In addition to automatic data transfer, semi-automatic (e.g., scanner) and manual data collection are possible.
Encompasses activities that affect the immediate production process and serves to ensure product and process quality.
Acts as a switching point for integrating other MES tasks and executing all workflows in processing the order inventory and process optimization.
In times of digitalization, it's important to understand the importance of both systems working together - both the Manufacturing Execution System and the Enterprise Resource Planning System (ERP). While the MES solution is essential for the manufacturing process (production control), the ERP system serves to create, manage, and organize plans that concern the decision about which products should be produced in what quantity.
Together, both systems form a future-relevant and indispensable ecosystem for manufacturing companies, enabling a holistic overview of the manufacturing process, documentation of the manufacturing process (traceability), quality control, supplier management, manufacturing costs and financial situation, logistics and delivery reliability, production processes, and various other relevant areas.
ISA 95 defines the interfaces between OT and IT in the MES environment. Here, the different levels between technology and business process are further considered:
Level 4 - ERP: Business planning and logistics Level 3 - MES: Manufacturing operations management Level 2 - Process control systems: Batch control Level 1 - Process control systems: Continuous control Level 0 - Process control systems: Discrete control
The main interface to third-party systems is the interface between MES software and an ERP system. Here, master and transaction data for products, work plans, bills of materials, and orders are transferred from ERP to MES. In return, MES typically provides order feedback and transaction data for individual objects.
Modern MES systems are modularly built on advanced cloud technologies. The MES is service-oriented and networked with other services and systems. Additionally, when selecting a customized MES system, it's important to ensure that it enables effective integration of shop floor management functions to optimize direct control and monitoring of manufacturing processes at the plant level and ensure stronger networking between the operational level and strategic planning. Topics like analytics, data streaming, and artificial intelligence merge with the data and services of a modern MES to form the backbone of a modern "smart factory."
MES systems that meet these criteria are often also referred to as Manufacturing or IIoT platforms. IIoT stands for "Industrial Internet of Things." Unlike a conventional MES solution, when using an IIoT platform, you are less dependent on the manufacturer because it offers the possibility to communicate with third-party systems.
An existing on-premises MES can usually be integrated into a manufacturing platform, as the platform represents an MES evolution and has corresponding interfaces to MES legacy systems. Compared to a legacy MES, companies benefit from the following advantages when using a cloud-native MES or manufacturing IIoT platform:
The decision for and implementation of a Manufacturing Execution System (MES) are critical steps that should be carefully planned and executed to maximize benefits for a company and minimize the risk of making wrong decisions.
Here are key recommendations companies should consider:
Identify your company's specific needs and goals that the MES should fulfill, including efficiency improvement, quality enhancement, compliance adherence, etc. Conduct a thorough requirements analysis to determine the functions and capabilities the MES must provide.
Involve all relevant stakeholders (e.g., production management, quality assurance, lean management, maintenance, logistics) early in the decision process to understand their needs and requirements and secure support. Designate a responsible "MES Key User."
Make the fundamental decision about which MES architecture is suitable for your company, considering economic and temporal aspects as well as available capacities in your company. Choose an MES that can easily adapt to changing business processes and growth!
Conduct comprehensive market research to evaluate available MES solutions and providers. Consider not only functionality but also support, scalability, and system integration capabilities.
Plan a step-by-step introduction to minimize risks and avoid overwhelming staff. Depending on the MES architecture decision, start with an evaluation (cloud-native MES) or pilot installation (On-Premises or Cloud-Hosted MES) in a limited area to get a feel for MES functionality and performance.
Organize targeted training programs through your MES Key User for all users to ensure they are familiar with the system and can use it effectively. Implement change management strategies to minimize resistance and promote system acceptance.
Ensure the MES can effectively integrate with other enterprise systems (like ERP or WHM systems) to ensure data consistency and access. Establish clear guidelines for data management, including data collection, storage, and security.
Use the data and analytics provided by the MES for continuous improvement processes, lean production, and operational excellence. Utilize new MES functions (applies only to cloud-native MES) to further advance your optimization process.
By following these recommendations, companies can increase the likelihood of a successful MES selection and implementation process, leading to improved operations and increased competitiveness. Let our experts show you in an individual web session how simple, smooth, and quick MES implementation can be today.