FRAMINGHAM (07/31/2000) - To help manufacturing companies operate as efficiently as possible, most modernized firms use what are called manufacturing execution systems (MES).
These plantwide systems are used to keep track of production schedules, inventory availability, work in progress and a range of other operations management-related information flowing to and from the shop floor.
If implemented correctly, an MES can manage, initiate, respond to and report on each of the primary production activities of a plant.
For instance, a manufacturer of made-to-order electronic goods can use an MES to optimize materials availability, labor and shipping resources by tracking production units, components and subassemblies from the time the order was placed through delivery.
Decisions on the Shop Floor
Delivering minute-to-minute shop-floor information is vital now that the Internet is driving more of a build-to-order manufacturing model, says Bill McSpadden, an analyst at Plant-Wide Research Group in Billerica, Mass.
As a result, companies that want to deliver on these modules need to have access to end-to-end decision-making information that drills down to the shop floor, he adds.
"If you look at the success of companies such as Dell, you see their front-end Web presence is supported by a back end that goes all the way into their plant floors," says Josh Greenbaum, an analyst at Enterprise Application Consulting in Berkeley, Calif.
MESs have been used for several years now - mainly in process industries - to support key operations management functions ranging from resource allocation and data acquisition to maintenance management, quality control, performance analysis, labor management and even paper reduction.
However, there has been little effort, especially on the part of discrete manufacturers, to collect and make this kind of plant-floor information available to plant managers and to enterprise management systems, analysts say.
"For years, MES was considered a point solution on the factory floor," says McSpadden.
Indeed, most supply-chain integration efforts have focused primarily on the deployment of business management applications such as enterprise resource planning (ERP) and customer relationship management (CRM) systems without addressing operations management needs, says Andy Chatha, president of ARC Advisory Group Inc., a manufacturing consultancy in Dedham, Mass.
It's only by integrating a plant-floor system with the rest of the enterprise that companies are able to get the kind of holistic view that's needed to support a build-to-order model, he says.
"There's always been this kind of a dividing line" between plant-floor systems and the rest of the enterprise, Chatha says. "ERP vendors don't understand plant-automation vendors and vice versa," he says.
But that's beginning to change, as reflected by the growing trend among manufacturers to move to an Internet-enabled business that emphasizes low inventories, short cycle times and quick order execution, say experts.
Increasingly, there's a need for a high degree of real-time and near-real-time flow of information spanning plant-floor operations, order entry, planning and scheduling, CRM and financial operations.
As a result, MESs are being viewed as the vital missing link for tying plant-floor information with business management information provided by applications such as ERP and CRM, McSpadden says.
No Easy Task
Despite the benefits, deploying an MES and hooking up the system with the rest of the enterprise is no easy task, analysts say.
This is especially true in enterprises with a mix of vendor platforms and legacy systems, such as an IBM AS/400-based MRP II system connected with a Digital Equipment Corp. VMS-based order-procurement system.
Hooking an MES into an enterprisewide system requires very tight integration between systems that are as varied as order entry systems, product configurators and planning and control systems, as well as sales force and delivery systems.
Each software component in an integrated enterprise should not only interface with the other ones but also share information and communicate in a common format.
Bridging the Gap
Bridging the gap between the two sides means integrating software, networks, protocols and languages that often bear little resemblance to each other and require layers of middleware and connectivity tools.
"MES systems have to be compatible with the existing environment. Very often, that environment is a hodge-podge of different systems that need a lot of integration," Greenbaum says.
Manufacturing execution systems are used to help manufacturers optimize production by delivering real-time operations information to and from the factory floor to plant managers, who are responsible for various activities.
These functions include resource allocation, quality control, performance analysis and labor management.
Examples of MES at Work
A manufacturer of custom-built products improves on-time delivery:
MESs allow for the tracking of specific customer orders and materials bills at the unit and component levels. This permits planners to know exactly where each unit is in the production cycle and what materials are needed and when. It also allows companies to reduce the inventory they hold and notify planners when there are product shortages. In addition, MESs enable planners to better schedule resources, materials, testing facilities and delivery infrastructures.
Customers can find out exactly when to expect their products.
Manufacturers manage changes in the production process:
An MES can help companies maintain records of products and processes by unit, subassembly and lot. At each stage, an MES helps companies gather information on test results, quality results, operators in charge and whether the product is being built in compliance with mandatory requirements. Complete device and product histories and granular details on how the product was built allow manufacturers to hone in faster and more accurately on any required changes or production rerouting.
A manufacturer that outsources production of components to contract manufacturers:
Provides traceability of all the parts and subassemblies supplied by third parties. An MES allows a manufacturer to keep track of changes.