Leveraging ERP for Smarter Manufacturing (MOM)

In manufacturing, where competition, customer demands, and business complexity continue to increase, the ability to successfully manage all aspects of your manufacturing business operations and to connect your people and equipment on the shop floor with senior management is becoming more and more challenging.

Driven by competitor and customer demands, manufacturers are integrating Industry 4.0 technology and smarter manufacturing, with particular reference to:

  1. Advanced engineering, such as additive manufacturing, generative design etc
  2. Connectivity, data, and computing power
  3. Automation and robotics
  4. AI/ML and analytics

It’s a very challenging road ahead, but one that can be simplified through the provision of end-to-end manufacturing processes to ensure efficiency and an overall manufacturing digital transformation – from the plant floor to the warehouse, to product quality and material flow throughout the entire business value chain.

ERP – The Solution? It’s well known that Enterprise Resource Planning (ERP) systems were originally designed to automate and support administrative, financial and inventory processes. These systems have become the de-facto standard to support traditional corporate functions, including purchasing, HR and financial management.

However, ERP’s integration to other core enterprise applications can be very complex, necessitating the use of enterprise information management and master data management strategies to implement.

With these limitations, challenges are steep when applying ERP’s corporate applications to the needs of Manufacturing Operations.

Flaws while integrating disparate systems can lead to delays in developing ERP-based manufacturing applications, or when deploying MOM or WM Systems across several sites when really designed for a single location. Often these issues can cost millions, and the careers of ambitious IT managers and executives.

This article is why today’s business requirements need direct, real-time integration between corporate planning applications and across the shop floor and manufacturing operations – including production, quality and the supply chain network. 

Manufacturers who embrace these new solutions can position themselves to respond faster to changing market conditions for expanded market share, while at the same time lowering costs and improving the efficiency of their business processes.

I’ll address the relationship between Enterprise Resource Planning (ERP) and a Manufacturing Operations Management (MOM) as part of a manufacturer’s digital transformation strategy.

Over the forthcoming article we take a look at:

  • Manufacturing challenges
  • How MOM helps
  • Where MOM & ERP fit together

Let’s start with a deeper look at the challenges for manufacturing today….

Manufacturing challenges

The bulk of the assets/resources in manufacturing organizations are in the operations side of the business. Manufacturing assets/resources have to be deployed, coordinated and managed in such a way that they help the company do what it wants to do without wastage.

  1. The first challenge is the common global solution to be created from business process knowledge developed over long periods of time across many plants, each with different histories of practices, experiences, machines and cultures. 
  2. Blend this with plants often independently picking their own favorite MES solution that leads to highly customized solution.
  3. Today we compete globally and usually 24×7 across multiple time zones.
  4. User interfaces must also be considered when reaching down to the plant level, where many aren’t sitting at desks on desktops or laptops, but instead may be operating equipment while trying to make adjustments in their line operations.
  5. Production and quality data is best collected automatically by shop-floor systems to avoid costly and error-prone manual data input. Huge volumes of detailed production and quality data must be stored and organized for future retrieval. When it comes to the shop floor, Manufacturing Execution Systems (MES) cover many different production activities, requiring different methods for assimilating the knowledge within corporate decision modeling programs.

How MOM helps

The MOM software solution is for managing end-to-end manufacturing processes to optimize planning, scheduling, and operations, and control quality and costs.

With MOM, manufacturers are more able to:

  • Provide the right information to the right people at the right time to make better decisions about every aspect of manufacturing, including advanced planning, production capacity analysis, WIP, and inventory.
  • Obtain a “single version of the truth” that eliminates silos of information and operations enabling better overall information to manage disparate manufacturing processes.
  • Meet goals for reducing waste, optimize inventory, and reduce throughput time to improve efficiency, quality, and customer satisfaction.
  • Implement continuous improvement in manufacturing operations.
  • Monitor quality and regulatory compliance at the enterprise level instead of at isolated, individual locations.

Still today, most continue to rely on less efficient but more familiar manual/excel approaches, despite how inconsistent and isolated they are. These manual approaches cannot effectively manage all the factors that manufacturing managers have to oversee, such as:

  • WIP
  • Inventory optimization
  • Scheduling
  • Dispatch
  • Engineering change orders
  • Manufacturing process flow

& then apply these across multiple plants!

The effective implementation of an integrated MOM solution is becoming necessary for any manufacturing company to survive.

Where MOM & ERP fit together

A MOM solution provides the operational information that a business requires about plant floor operations, but it needs to be integrated with information from the rest of the organization to get the maximum benefit. That’s where an ERP system comes in. An ERP system provides inventory management, BOM financials, accounting functions, supply chain visibility, and traceability, as well as other capabilities that modern businesses need.

A good MOM solution is one that combines all production processes to enhance quality management, control costs, assist in advanced planning and scheduling activities, and boost operational excellence.

Integrating MOM & Production into the Enterprise

Supporting your 24×7 Production environment

Regardless of how optimized an ERP or APS production plan may be, it still must be properly executed.

Production, quality, engineering, PLM and equipment maintenance processes must be defined and executed at the execution layer in order to be adaptable to changing market, customer and industry trends.

Detailed visibility

When establishing a manufacturing plan it is necessary to first generate a list of tasks, activities or process orders.

These tasks must then be synchronized to avoid wasting time or resources, not only between the production lines or cells, but also between various production, quality and maintenance teams.

Production operators need to receive material on time from warehouse logistics; quality control operators need to sample, control and evaluate products with a minimum impact on cycle times; technicians must execute their maintenance operations to minimize resource downtime.

The difference between a ‘best-in-class’ production floor and an under-performer comes from detailed optimizing of the manufacturing workflow. 

This requires a sophisticated level of detailed information on individual critical resources, such as machines and tooling status.WIP levels, including the status of intermediate products and containers, as well as the location within the warehouse or the production area are needed to support intelligent, dynamic decision making as unexpected events occur.

ERP systems were designed for global resource and supply chain planning, as well as for accounting processes, so they generally don’t have the capacity, data model or transactional ability to handle incredibly large volumes of detailed information associated with manufacturing activities – it’s the longer-term thinker, rather than realtime doer!


Manufacturers need to keep their facilities optimized with maximum throughput. Coupled with global production requirements, the perfect plant of course can never shut down.

To support this, information systems must adhere to the same level of continuous availability.

While an ERP system is often designed to support high availability with a redundant architecture, there is not be real-time visibility down to the shop floor.

Providing high availability for a global data network, while incorporating a recurring maintenance schedule for IT systems is difficult and expensive. Complex administration of central ERP systems creates a strong motivation to use a locally based MES.

Furthermore, globally distributed plants make the planning of maintenance activities within a centralized ERP very complex to accommodate, especially when dealing with multiple time zones.

Processing capabilities can be overloaded during peak hours of ERP batch processing, planning calculations or month-end accounting. This slow down can generate data locking, which reduces performance, blocks access by plant operations and can severely impact production costs.

The solution is to provide a distributed systems architecture that connects a centralized ERP system with a local operations execution system, enabling each system to perform autonomously as needed, providing robust availability.

Additionally, integration must exist between each operations execution task to collectively perform as a whole, further leveraging the vertical integration into ERP with horizontal integration across manufacturing production, quality, warehouse, maintenance and time & labor systems.

Support for Real-time Un-planned & Exceptional Events

A good MOM System must accommodate both planned and unplanned events. Even as predictive maintenance processes are applied, unexpected machine downtime will still occur. A good MOM solution provides instant visibility and a recommended course of action.

Even with the sophisticated logic of a demand driven supply chain leveraged to prevent material shortages, some material, component or ingredients will inevitably be unavailable at a specified location or quantity level at the time of production. Your MOM solution can be ready to adjust.

Automated data gathering

When traceability requirements lead to multiple production and process data recordings, automatic collection of data is needed to maintain productivity.

Recording information manually for traceability or machine efficiency typically adds hours of work per day for paper-based recording and manual entry within a spreadsheet or any other database.

Production data such as product reference, lot or serial number, supplier, customer or quantity can now be automatically collected using bar codes or RFID technology.

Product characteristics are collected through measurement device interfaces; process and production data are collected by interfacing to machines, PLCs or SCADA systems.

Automated data collection prevents production delays, due to delayed or outdated manual inputs, delaying time required to take corrective action. With on-line information delivered in real-time, problems are detected earlier while there is still time to take corrective action.

Local Plant Control

Before discovering the benefits of an integrated and cross functional ERP, manufacturing companies often used local plant level MRP systems, mainly customized to handle specific production models, local processes and best practices. Today, as already mentioned manufacturers are challenged to combine the benefits of standardizing global processes while preserving local control.

The ideal solution combines a centrally planned ERP focused on supporting core business processes that apply to all business units, augmented by a robust MOM capable of supporting plant floor processes and customized local plant processes necessary to complete the production process.

Integration across PLM/MOM/ERP

A Machine Operations Management (MOM) system with real-time data collection from machines fully integrated with your ERP has proven benefits:

  1. Improved adoption of technology, use of machine data
  2. Reduce the training curve, in a familiar environment
  3. Accurate part counts, both good and scrap
  4. Improved costing data
  5. Improved scheduling and planning
  6. Real-time “machine down” notifications within ERP & MOM
  7. Web-portal on cell phones make it easy and economical to report downtime reasons and visualize data

In summary, when you are planning a strategy to use both your ERP and machine data, count on working with a solid, comprehensive solution for both Enterprise Resource Management (ERP) and Machine Operations Management (MOM).

Find a partner that not only knows both systems well and has done this kind of integration before, BUT most importantly demand to meet the core Architectural (Business Process, Application Solution and Integration) consultant team!

You’re only as successful as the team that’s doing the job!