MES vs ERP: what each system does and which one you need first

What an ERP does

ERP stands for enterprise resource planning. It keeps the commercial records of the business in one database. Sales orders, purchase orders, inventory, invoices, payables, receivables and cost all live there. It thinks in days, weeks and months, and most of its users sit in the office, in sales, purchasing, accounting and planning.

An ERP with a manufacturing module also holds bills of materials, routings, production orders and material requirements planning. It knows what a production order will consume, what it should cost and when it is due. What it does not know, unless someone types it in, is which step that order is at right now.

Plenty of small shops run an accounting package rather than a full ERP. For this article it sits on the ERP side, because it answers the same kind of question. What did we sell, and who owes whom?

What an MES does

MES stands for manufacturing execution system. It records production while it is being carried out. When an operator starts, pauses or finishes a job, the time, machine, person and quantity are captured on the spot. A pause carries a reason, and finishing a job means entering good and scrap counts. On machines that can send it, the running or stopped state comes straight from the machine.

An MES works in shifts, hours and minutes. Its users are operators, leads and production managers, and its screen is a terminal, tablet or phone next to the machine. What it really produces is actual time. How long a part took on the lathe, why the machine stopped and how much scrap a job made are facts that start life on the floor. If nobody records them there, they are gone.

Where the line sits, in ISA-95 terms

ISA-95 (IEC 62264) is the international standard that splits a plant's systems into levels, by the decisions each level makes and how fast it works:

Put simply, level 4 manages orders and money and level 3 manages jobs and minutes. They meet at the production order. The ERP says 200 of this part by the 14th. The MES breaks that order into operations, machines and operators, then reports back what happened.

A quick test tells you which side a piece of information belongs to. If the answer can change within a shift, it belongs in the MES. Which machine a job is on, whether a machine is running right now and how many parts came off today all work that way. If the answer stays the same for weeks, or is tied to a document, an invoice or a payment, it belongs in the ERP.

MES vs ERP compared

The two are built for different jobs, and they work best when neither one keeps a second copy of what the other owns.

What data flows between MES and ERP

When the two run together, data moves both ways. Order information goes down to the floor, and what happened on the floor goes back up:

Material consumption is handled in one of two ways. Either the ERP backflushes it from the bill of materials based on the good quantity reported, or the quantity actually used is entered by hand. Backflushing is convenient. On jobs with a lot of scrap, though, it slowly builds an inventory gap.

The most important rule in any integration is that each piece of information is created in one place only. If part numbers are created in the ERP, the MES reads them from there and never invents its own. Actual times are created in the MES and are not corrected by hand in the ERP. Type the same thing into two systems and within a few weeks you have two numbers and nobody knows which one to trust.

Why ERP production modules rarely cover the shop floor

Many companies with an ERP already own its manufacturing module and fairly ask why they would need an MES on top. Manufacturing modules are good at planning. On the floor they tend to struggle in a few places:

• The plan is assumed to be right. Cost and capacity are calculated from standard routing times, and actual time only arrives if somebody reports it.
• Reporting usually happens in the office at the end of the day. There is no ERP screen in front of the operator, and where there is one, a single confirmation means several screens and a lot of fields.
• ERPs are mostly licensed per user. Giving every operator or every machine an ERP seat gets expensive fast.
• A stop reason does not turn into a document. Forty minutes spent waiting for material has no natural home in the ERP, so it usually never gets written down.
• The plan on the floor changes during the day. A rush job jumps the queue or a machine goes down, and the production order in the ERP only knows if someone updates it.

All of this comes from the ERP being built around documents and money. An MES is built to record events and time, which is why most plants that have both keep them side by side.

Where MRP fits

MRP (material requirements planning) looks at bills of materials, inventory and open orders and works out which materials to buy or make, how many and when. It started out as a separate program, grew into MRP II once capacity planning was added, and today it is usually a module of the ERP.

MRP is only as good as the times it is fed. If lead times, run times and setup times do not reflect reality, the plan misses in the same place every month. Classic MRP also assumes unlimited capacity, so it will promise a date without knowing the machine is already full. An MES does not replace that planning. It measures real times and today's load on the floor, and the planner uses those numbers to correct the plan.

Which one does a small shop need first?

The answer depends less on budget than on which problem hurts every day:

In job shops and make-to-order plants with a wide mix of work, the daily loss is usually on the floor. They hold few stock items, but dozens of different jobs run at once. A shop like that can run for years on accounting software and an MES. In repetitive production that consumes hundreds of materials, material planning matters earlier and the ERP comes first.

If you already have an ERP, you do not need to replace it. The next step is to connect the floor to it. If you are about to implement an ERP, do not leave the MES to the very end. Setting up part numbers and routings so both systems can use them from day one is much easier than matching codes later. The steps for leaving spreadsheets behind are in MES vs Excel, and what a work order should carry is in work order tracking.

Where ModernMES fits

ModernMES is a level 3 system. It runs on its own or next to an ERP. It has no bills of materials, purchasing, accounting or material requirements planning, and those stay with your ERP or accounting software.

An order is opened in ModernMES as a project. When a routing is applied to a part in the project, a work order is created for each step, and parts and routings can be imported from Excel in bulk. Operators start, pause and finish jobs on a terminal that runs in the browser or on their own phone. They pick a reason when they pause and enter good and scrap counts when they finish.

If you use an ERP, the ERP integration add-on works with SAP Business One, SAP S/4HANA, Microsoft Dynamics 365 Business Central and Odoo, and with several ERPs common in Turkey such as Logo, Mikro and Netsis. For other systems there is a generic JSON connection, plus webhooks for work order events. The connection reads items and customers from the ERP. It books finished work as a production receipt when a part's last operation finishes, or after every operation, and it can send scrap too. The connectors were written from each vendor's published API documentation, so check the first postings in your own system before you rely on them.

One limit is worth stating plainly. ModernMES does not pull sales or production orders from an ERP today. The order is opened in ModernMES, and the results go to the ERP.

The cloud version of ModernMES does not connect to private network addresses. If your ERP runs on a server inside the company, its web service has to be reachable over HTTPS. If you would rather not open it up, ModernMES can be installed on your own server and reach the ERP over your internal network. What each connection sends and receives is on the integrations page. The 14-day free trial needs no credit card.

Frequently asked questions