Manufacturing Execution Systems

A Manufacturing Execution System or MES is according to the definition of APICS an information and communication system for the production environment of a company. MES takes care of the translation between process information on the shop floor and the financial - logistical information in the office. However, MES is not only a translation layer. Its main purpose is to control and to improve all aspects that are influencing the production processes in order to achieve higher flexibility, lower production costs and thus more profit. Important functionality are production registration (data acquisition), production reporting and detailed planning/scheduling.


MES: Use of Information and Communication Speed

In principle production and logistical processes in a company never are completely automated and they are changed quite often too. People are always in charge and will have to make decisions what to do next, how to act, etc. The quality of these decisions is determining the overall performance of the company. A MES is just an information provider. Data have no value in themselves. When they are structured and relations between the various items are clearly presented, then they become information and the meaning increases. As depicted in the left-hand side of the "decision efficiency" will increase dramatically when people are using this information in combination with their knowledge and experience. Than profit will be created! The value of the information also depends heavily on its timely availability. Although a company may have been very profitable, this does not automatically mean that the production efficiency was optimal. In production, the timely availability of information is essential to be able to react effectively to events, trends and problems. So the speed of communication is also important to the decision efficiency (right hand side of the picture).

Functional Shift

A number of factors have come together to shift the focus of MES functionality, also. The increasing emphasis on supply chain effectiveness and customer responsiveness is one of these factors. The increasing use of outsourced manufacturing and increased reliance on suppliers plus globalization are further business realities that affect what companies want from MES. Another factor is the Internet, which has set new expectations for data accessibility and distribution. Yet another is the current difficult economy, in which companies are focused on cost saving opportunities, yet investing only in small projects with a rapid projected time to benefit.

Manufacturers have realized that they compete as supply chains, and that production is a key element for keeping customer service levels high. In a supply chain, each plant is just one element, acting as customer for certain materials and subassemblies and supplying others. As a result, the MES systems are being asked to provide real-time insight into plant operations for buyers in procurement, customer service and sales representatives, and distribution and logistics managers as well as their traditional users inside the plant. Outsourcing and increased reliance on suppliers of all sorts makes sense, but reduces control and visibility into operations. As OEMs strive to promise customer orders more accurately and as contract manufacturers and suppliers compete to become extensions of these companies, MES systems are being asked to deliver information outside the company firewall. In many cases, the MES is also being asked to feed into supplier scorecard applications. This requires that data be transformed into information about plant performance on quality, delivery, cost, and other product and process parameters. Plant Intelligence functions are increasingly common for MES.

The Internet has enabled MES suppliers to provide plant information to other systems and users more easily. The mechanism to distribute information to non-plant users and to outsourcing customers is usually a web-based interface into the MES. Internet visibility into MES also allows global operations and supply chains to stay synchronized more easily. The data is easily accessible at any time, in real-time. Reducing the need for people to reach another human being in a different time zone who speaks a different native language can greatly increase efficiency and reduce misunderstandings and delays.

MES: Necessity for Supply Chain Management

Especially right now MES is in the spotlights, because it enables a better control of the own production processes. That is one of the most important issues to be able to play an adequate role in the supply chain. An enterprise is not alone, but its objective is to satisfy their customers in co-operation with suppliers and direct consumers and at the same time make a proper profit.

If a company does not control its own production processes with respect to flexibility and costs the partners in de supply chain will look for somebody else. Especially these two aspects, flexibility and production costs, are most important for using MES. Once all involved in the supply chain are really in control of their own and collaborating processes, the competition will shift to a battle between different supply chains processing the same kind of goods. In Europe these competing supply chains exist already for many years in agricultural businesses. Large co-operations are controlling complete chains from raising chickens to distribution of egg products to retail, from cattle improvement via dairy to production of pharmaceutical ingredients from what the dairy companies have left over from their cheese production.