ERP or MES? Where to look for the effect of production management optimization?


A brief history

The main workshop in a mechanical engineering enterprise was always overloaded, there was always a lot of work and the enterprise was not satisfied with its results. After the implementation of a comples ERP and MES production managament system, everything changed. Work in progress decreased by almost 20%, working capital decreased by 6% and the overloaded workshop began to look for additional work to accumulate a salary fund. As a result, the productivity of the enterprise increased by 7%.

How did this happen? The answer is very simple – the target optimization function in the management of production.

Before ERP implementation

Prior to the implementation of a complex ERP and MES production management system, the production plan of the workshop was determined by a manager of the workshop. Its purpose was to provide a wage fund. As a result, he put out for work details that increased the salary fund of the workshop, but long after that they were in the warehouse for semi-finished products.

After ERP implementation

After the implementation of the system, the production plan began to be determined by the production director. Getting an instrument for economically sound production management, it changed the target production optimization function. The goal was no longer to fill a salary fund, but to fulfill customer orders with minimal expenditure of production and material resources.

The conclusion from this is that not every optimization of production in the workshop is optimal for the plant. It is necessary to seek optimal management at the plant level and the management in the workshop to subordinate to the corporate policy of production management.

And when we talk about optimization of production management, we must consider the optimization of complex production management. It starts from the technological preparation of production, through the management of production by workshops to the distribution of job tasks by machines.

Often, when the management of the enterprise cannot cope with the management of production, it imposes on the workshop the task of optimizing its management. And then all production failures are attributed to the management of the workshop. Is such an accusation fair? What kind of workshop optimization can we talk about if the technological processes themselves are not optimized?

Optimization on the workshop has to start in the chief technologist’s department!

On the other hand, by what percentage can productivity actually be increased in a workshop by improving its management? 2, 3, …5%? But this is a percentage on the volumes of only one workshop. You will agree that it is more effective to seek such an improvement on the volumes of the entire enterprise. This task is aimed at optimizing the material flows of the enterprise. Workshop optimization is related to planning according to the APS (Advanced Planning and Scheduling) standard and that at enterprise level to  MRP (Manufacturing Resource Planning) planning. This reinforces the model for two-stage production planning in mechanical engineering – planning to the calendar plan of the enterprise and operational plans in the workshops.

And speaking of production planning, it is time to open a new page.

Coming up in a future post…

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