Understanding the Differences Between Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) Systems

Today’s manufacturers are bombarded with uncertainties that threaten their longevity. In response, they’re working to become flexible and adaptable by embracing technology. Two examples of such technology are manufacturing execution systems (MES) and enterprise resource planning (ERP) systems.

While both MES and ERP solutions provide similar benefits, including increased efficiency, improved customer satisfaction, and the ability to make data-driven decisions, they differ in functionality and scope. This article explores these differences and examines how choosing an ERP system with integrated MES features can take manufacturing businesses to the next level of operational efficiency and success.

Overview of MES and ERP Solutions

What is an MES?

An MES is a specialized software solution designed to manage, control, and improve the manufacturing process using data it collects from sensors, barcode scanners, and employee input. This data, which is collected in real-time, tells businesses how well their production processes are converting raw materials into finished goods. Businesses then use this information to trace products, properly allocate resources, manage scheduling and production flow, create reports, remain compliant with quality regulations, and optimize performance. While this covers many bases and helps companies reduce waste, increase efficiency, and cut costs, the specificity of an MES limits is usefulness to only production. It can’t cover the other critical back-end operations that all businesses have to manage—like accounting, payroll, and customer and vendor relationships. So, an MES can’t be used as a standalone application to manage an entire manufacturing business.

What is an ERP System?

Like an MES, an ERP system is used to assess business performance, including manufacturing performance. But, unlike an MES, an ERP system is a business management solution that extends beyond production into all facets of the organization—from accounting to sales and inventory to human resources. It acts as the organization’s centralized database and business platform, with data streaming into and out of it, providing a single source of truth. An ERP system’s analytical capabilities enable companies to analyze their organization-wide data and translate that knowledge into leaner, more agile businesses. Additionally, ERP systems automate workflows and allow businesses to integrate modules with different functionalities (e.g., customer relationship management, warehouse management, procurement, and payroll), so they all work together as one.

Key Differences Between an MES and an ERP Solution

Scope and Focus

MES: Concentrates on real-time production management and shop floor control.

ERP: Encompasses broader business processes in addition to manufacturing, including finance, HR, procurement, and sales.

Data Management and Reporting

MES: Provides real-time data from manufacturing processes for quick decision-making.

ERP: Provides real-time and aggregated data for the entire company, which informs both quick strategic planning and long-term analysis.

Integration and Implementation

MES: Often integrates directly with production equipment and control systems.

ERP: Integrates various business functions, including MES, into a unified system.

An ERP System with MES Functions

Today, every manufacturer needs an ERP solution to, at the very least, organize financials and control production. An MES is a secondary option for extending and complimenting an ERP system with manufacturing-specific features. For example, MES software depends on production order, labor operations, bill of material, work center, and other data from the ERP application for production planning and shop floor data collection. Similarly, ERP systems capture data from MES applications for work-in-process reporting, manufacturing cost accounting, and inventory transactions for raw material usage and finished goods production.

However, integrating this separate software with an ERP solution is generally an option best suited for larger companies that need advanced shop floor control with machine-to-machine (M2M) interfaces for data capture. Most midmarket ERP applications provide straightforward, built-in, user-friendly MES features that smaller organizations can use to manage production seamlessly from a single solution. In this case, there’s no need to implement and integrate a costly MES that, for such companies, would be an unnecessary expense, buying advanced functions they just won’t use.

Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) Systems Benefit Manufacturing Businesses

ERP systems are the foundation for every manufacturing business—connecting all departments, delivering organization-wide information, improving efficiency, increasing productivity, and enhancing customer service. Separate MES applications connect to ERP applications for advanced production management, scheduling, and reporting from the shop floor. But the simplest, most straightforward way to access the benefits of an MES, without the extra expense, is by implementing an ERP solution that contains MES functionality. That’s what every manufacturer receives when they choose Acumatica.

Acumatica’s Manufacturing Edition provides everything a manufacturer needs in a single, connected system. It is built on an open platform, which enables organizations to connect Acumatica to specialized third-party applications and extend its capabilities. The Manufacturing Edition delivers core ERP functionality along with:

• Manufacturing Management.
• Production Management.
• Material Requirements Planning (MRP).
• Manufacturing Data Collection (MDC).
• Inventory Management.
• A Full Suite of Accounting Applications.
• Business Intelligence.
• And so much more.

As Acumatica customer Ben Leinster, CEO of aftermarket textiles manufacturer AFF|group, puts it: “For us, the power of the Acumatica system is in the WMS and shop floor data collection, the inventory management, and the ability to deliver to a customer and to get things right.”

To learn how Acumatica and our comprehensive Manufacturing Edition can connect your business end-to-end and help you build a strong, profitable future, contact our team today.