Busting ERP Myths The Top Five Myths about Using ERP on your Shop Floor
For increased efficiency, visibility and, ultimately to save money, many manufacturing companies are looking into software solutions to boost production for their shop floors. But there is no easy solution to choosing the best manufacturing software for a facility.
Most manufacturing companies are contrasting two solutions: Enterprise Resource Planning (ERP) software and Manufacturing Execution System (MES) software. In some facilities, IT groups are mandated to invest into ERP and to use ERP functions wherever possible, including the shop floor, often without regard to functional fit. This can be a risky and costly proposition for some manufacturing operations. Instead, replacing ERP with a well-defined MES on the shop floor, which is specifically designed to manage production in factories, can be a more effective option. The following are five common myths about using ERP on the shop floor:
Myth #1: A single ERP solution provides lower Total Cost of Ownership (TCO)
The prospect of managing an organization with a single omnipotent application suite can be seductive, but in many cases, it doesn’t provide the depth of functionality needed to support the requirements of production. To compensate, IT departments have developed extensive customizations on top of ERP systems. This custom development is often done with specialized, expensive ERP resources and creates an ongoing maintenance need. It is common for ERP implementations to require five-to-seven times the cost of services – on top of the cost of the software licenses – and end up costing much more to support and maintain than initially expected.
To reduce implementation costs, top ERP vendors are enabling easier integration and have embraced the integration of third-party manufacturing applications through web services, XML integration standards and partner programs. Yet, many IT departments are still trying to customize on top of ERP systems.
Additionally, MES vendors have invested in off-the-shelf integration interfaces to ERP, leveraging industry standards including ISA95 and OAGIS XML.
When researching solutions, keep in mind that system integrators tend to stick to what has worked before and might recommend custom options, especially since they are in the business of writing interfaces and developing custom functionality. It is important that organizations’ IT teams review MES-integration service packages in order to leverage the latest XML and standards-based off-the-shelf integration options.
Myth #2: You get better visibility and a “single version of truth” from a centralized ERP system
ERP systems usually do not provide enough functionality to turn the shop floor completely paperless. As long as there are multiple paper logs and spreadsheets on the shop floor, there is a chance that these different data sources will become different “realities” for different departments.
Many ERP vendors have acquired third-party modules to expand their production functionality. There is often very little difference between the integration of internal ERP modules and the integration achieved with an MES vendor solution.
The best way to ensure a “single truth” is to have a good integration strategy between ERP and MES that makes the shop floor truly paperless. Organizations can still support corporate decision making tools with consistent visibility into global operations through well integrated ERP and MES applications.
Myth #3: Standardizing on the same ERP system across the corporation increases productivity
Many leading organizations have realized that their ERP system can service some plants and operations just fine, but other plants with different manufacturing models are better serviced with a specialized, integrated MES system. It is becoming more common for organizations with diverse products and manufacturing models to standardize with two or even three solution sets, not just one. The cost of supporting an additional MES system can be easily justified in these situations.
Myth #4: A single ERP vendor will provide better ongoing support
Some stakeholders in organizations might believe that dealing with a single vendor or a single system integrator provides better results and technical support. But, the reality is that organizations serviced by smaller MES vendors that specialize in specific industries receive better service and quicker response. As an example, at iBASEt’s last Solumina MES User Conference, many users pointed out that the high level of service provided by iBASEt is a big differentiator between iBASEt and its competitors, especially when compared to big ERP vendors. Users also noted that iBASEt is quicker to incorporate best practices from the user community into the product.
Myth #5: The functionality in ERP is good enough for the discrete-production shop floor
According to AMR Research’s 2006 survey, the following issues arose among companies using and evaluating ERP for their plants:
-ERP has a complex user interface for the manufacturing staff -ERP doesn’t address all of our requirements and can’t model our complex manufacturing processes-ERP takes too long and costs too much to customize and implement for manufacturing -ERP configuration requires specialized and expensive ERP software skills -ERP screens require expensive configuration for prompting and validating data collection
These survey results on ERP systems are still valid today. To confirm these impressions, organizations should research the amount of screens and commands required in the ERP system to perform a few common production transactions, like a work order split. Then, compare the efforts required to perform the same functions in an MES designed for a specific industry. Also, it would be beneficial to compare the times required for a mechanic on the shop floor to perform inspection data collection and signatures in both systems. These simple data points will give a quick idea of the differences in ease of use and off-the-shelf options in each application.
When researching which software system would work best for your shop floor, examine an ERP system’s fit. The best solution may be an integrated ERP-MES system.
More information on this topic can be found in the white paper: The Right Tool for your Shop Floor: Contrasting ERP and MES Solutions or visit the Library section.
iBASEt is a leading provider of software solutions to complex, highly regulated industries, including Aerospace, Defense, Nuclear, Industrial Equipment, Electronics, Medical Devices and Shipbuilding. iBASEt’s Solumina® Operations Process Management (OPM) software suite streamlines and integrates Manufacturing Execution System (MES/MOM), Maintenance, Repair and Overhaul (MRO), and Quality Management System (QMS) software for operations and supplier management. Solumina is implemented by industry leaders, including BAE Systems, General Dynamics, Lockheed Martin, NASA, Northrop Grumman, United Technologies and United Space Alliance.
Related Articles – MES, ERP, Operations Management, Shop Floor, Quality Control, Quality Assurance, Quality, Production Planning, Manufacturing Execution System,
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