The question „ERP or MES?” comes up often, but in a manufacturing enterprise it is rarely a real choice. The two systems solve different problems, and the most tangible result comes when they work together. Below we look at what each one does, how they differ, and where the effect on production management shows up.
What is ERP
ERP (Enterprise Resource Planning) is the system that plans and manages the resources of the entire enterprise — customer orders, material requirements, supplies, stock levels, finance, accounting and cost. It answers the question „what, how much and when to produce in order to fulfil orders with minimal use of resources”. Its time horizon is days, weeks and months, and it is used by management, planning, finance and sales.
In the ERP system for manufacturing TECHNOCLASS®, this layer also includes finance and accounting in a shared database with the production processes.
What is MES
MES (Manufacturing Execution System) is the system that executes and controls production in real time at the shop-floor and workstation level. It distributes work orders across machines, collects data from operators and equipment, ensures batch traceability, and monitors quality, downtime and overall equipment effectiveness (OEE). MES answers the question „how is production going right now” — with a horizon of seconds, minutes and hours. It is used by the production director, shop managers and operators.
In TECHNOCLASS® this layer is covered by production management and the shop-floor terminal system.
ERP or MES — a comparison
| ERP | MES | |
|---|---|---|
| Primary role | Plans the enterprise’s resources | Executes and controls production in real time |
| Level | Plant / enterprise level | Shop-floor / workstation level |
| Time horizon | Days, weeks, months | Seconds, minutes, hours |
| Typical data | Orders, materials, stock, finance, cost | Machine data, operations, batches, quality, OEE, downtime |
| Who uses it | Management, planning, finance, sales | Production director, shop manager, operators |
| Answers the question | „What, how much and when to produce?” | „How is production going right now?” |
Why ERP and MES do not compete
ERP and MES are not alternatives to one another — they complement each other. MES does not manage finance and accounting and does not plan at the enterprise level; ERP does not manage the work of machines and operators in real time. When the two are connected, you get a single, two-way flow of data:
It is precisely this connection that produces the effect neither system achieves on its own. The following example illustrates it.
A real example: changing the objective function
The main shop of a machine-building enterprise was always overloaded and always had plenty of work, yet the enterprise was not happy with its results. After implementing a comprehensive ERP and MES system for production management, work in progress fell by almost 20%, working capital decreased by 6%, and the enterprise’s productivity rose by 7%.
How did this happen? The answer is simple — the objective function for optimization in production management changed.
Before the implementation
The shop’s production plan was set by the shop manager, whose goal was to secure the payroll fund. As a result, he released for production the parts that increased the fund, but which then sat for a long time in the semi-finished goods store.
After the implementation
The plan began to be set by the production director. Now equipped with a tool for economically justified management, he changed the goal — namely, not filling the payroll fund, but fulfilling customer orders with minimal use of production and material resources.
The takeaway: optimize at the plant level, not only in the shop
Not every optimization in the shop is optimal for the plant. Improving the management of a single shop yields 2–5%, but only on the volumes of that shop. It is more effective to seek optimization at the level of the whole enterprise, with shop-floor management subordinated to the corporate production policy.
In practice this is two-level planning: a master plan at the enterprise level (Material Requirements Planning, MRP, within ERP) and operational plans with machine-level dispatching at the shop level (detailed planning by APS — Advanced Planning and Scheduling, within MES). The starting point matters too: optimization does not begin in the shop but in the technological preparation of production. If the technological processes themselves are not optimized, no management can compensate for that.
Frequently asked questions
What is the difference between ERP and MES?
ERP plans the resources of the entire enterprise (orders, materials, finance), while MES executes and controls production in real time at the shop-floor level.
Does MES replace ERP?
No. The two cover different levels — MES does not handle finance or plan at the enterprise level, and ERP does not manage machines in real time.
Do I need both?
For a manufacturing enterprise — yes, if planning must be based on real data from the shop floor. Integrated, ERP and MES form a single flow of data.
Where does the greatest return come from?
From optimization at the plant level, not just the individual shop. That is why the effect of an integrated ERP and MES system is greater than that of the two separately.
If you would like to see how the ERP and MES functions of TECHNOCLASS® plan and execute production as a single whole, get in touch for a demonstration.
This article was published in 2019 and updated in 2026.