ERP and MES Integration in Manufacturing Systems
- Team SB Infotech
- 2 days ago
- 14 min read
As manufacturers strive for greater efficiency, real-time visibility, and agility, the disconnect between shop floor operations and enterprise systems becomes increasingly difficult to ignore. Bridging this gap is no longer just a technical upgrade; it has become a strategic necessity.
This is where MES-ERP integration proves invaluable. The global manufacturing execution systems (MES) market is projected to grow from USD 15.95 billion in 2025 to USD 25.78 billion by 2030, reflecting a compound annual growth rate of 10.1%. This growth highlights an industry shift toward integrated systems that enhance operational control and responsiveness.
In manufacturing environments with complex processes, such as corrugation, where production, material handling, and subcontracting require high levels of coordination, traditional ERP solutions often fall short. This leads to inefficiencies, delays, and an increased reliance on manual intervention.
By combining MES and ERP capabilities, manufacturers can align shop floor activities with broader business objectives. This integration creates a unified ecosystem that enhances performance, improves decision-making, and supports long-term growth.
In this blog, we'll explore the concept of MES-ERP integration, discuss common implementation strategies, outline key benefits and challenges, and provide practical recommendations to help manufacturers achieve successful integration.
What is ERP Software?
Enterprise Resource Planning (ERP) is a modular software that can be customized to meet businesses' unique requirements and integrate human resources, accounting, procurement, logistics, inventory, billing, and customer relations management data into a single platform. Thus, ERP systems serve as an organization’s skeletal structure.
The information gathered from the various modules is stored in a single relational database, which allows a wide range of users to view it based on their permissions.
According to ISA-95, the international standard for integrating enterprise and control systems, ERP solutions are considered Level 4 as business planning and logistics systems.
ERP’s primary purpose is to:
Allow organisations to standardize and automate key business practices.
Ensure more thoughtful decision-making by providing visibility into mission-critical practices and operations.
Manage company resources on a single platform.
ERP systems play a critical role in business management by offering real-time, data-driven insights that support informed decision-making. For example, they can provide detailed production metrics, such as the number of units manufactured last quarter, or pinpoint current asset availability to ensure timely delivery.
However, since it does not offer trustworthy, up-to-date information on plant operations, its application in the production setting is severely constrained. Here’s when MES software comes into the picture. Let’s discuss that next.
What is MES Software?
Manufacturing Execution System (MES) is software that manages intricate manufacturing processes, such as recording raw materials entry, scheduling and executing production orders incoming from the ERP, delivering the finished product, and collecting real-time data on the shop floor.
According to ISA-95, MES is considered a Level 3 manufacturing operations system as a pillar of manufacturing operations management (MOM) software.
MES's primary purpose is to:
Give factory managers and employees the necessary information to identify efficiency losses and bottlenecks.
Rectify shop floor deviations before it is too late.
Digitize maintenance management.
Ensure traceability.
Ensure adherence to safety and quality standards.
Create and carry out plans for continuous improvement.
It helps improve the production process, ensure the optimal use of the available resources, minimize downtime, and boost overall productivity.
Understanding the features of ERP and MES systems shows why having one over the other, or using both separately, is not a suitable solution for your business. Integrating an ERP system with MES software ensures that both complement each other to encourage accurate demand forecasting. Let’s find out how.
How Do MES and ERP Complement Each Other’s Functionality?
Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) systems are essential for managing different parts of a manufacturing business. While they serve different purposes, they work best when connected and sharing information in real time.
Think of ERP as the strategic planner and MES as the tactical executor. The ERP lays out the plan, and MES makes it happen on the ground. Meanwhile, MES keeps ERP in the loop with real-time updates so the whole business can stay aligned and responsive.
Together, they form a powerful feedback loop that keeps operations efficient, accurate, and informed from top to bottom.
Here’s how they complement each other:
ERP Sends Information to MES (Top-Down Flow)
The ERP system handles big-picture business planning, such as order management, inventory, and scheduling. It sends this information downstream to the MES, which focuses on the shop floor.
For example, ERP provides:
Production orders
Scheduling info
Inventory levels
Workforce availability
The MES then uses this data to make real-time manufacturing decisions, like:
Which production line to use
Which operators are available and qualified
When and where to deliver materials to the line
MES Sends Information to ERP (Bottom-Up Flow)
Once production is underway, the MES collects real-time data from the shop floor and sends it upstream to the ERP system.
This feedback can include:
Production slowdowns, helping ERP and other departments (like Finance) plan equipment upgrades or staffing
Material usage, scrap rates, and production completion, which helps ERP keep accurate records of:
Inventory levels
Cost tracking
Order fulfillment status
Now that you’ve understood that ERP and MES systems complement each other, it’s time to learn how they can be integrated.
How To Integrate ERP & MES Systems?
Integrating ERP and MES systems requires a strategic approach that bridges the gap between business planning and shop floor execution. Here are some common methods that a manufacturer may follow to integrate their ERP and MES systems.
Batch Integration
The process of combining and analysing data gathered over time is known as "batch integration." For example, a manufacturing company can record production data during the day and upload it to an ERP database, syncing it all at once at the end of the workday.
Pros:
Processes data in big batches, saving time and effort.
Reduces the strain on ultra-quick computers.
Cons:
Not suitable for tasks that require quick responses to real-time data.
System crashes before the end of batch processing lead to data loss.
Middleware Integration
Middleware integration is the process of connecting otherwise incompatible infrastructures, such as linking production data from MES with inventory management in ERP using software like iPaaS (Integration Platform as a Service).
For example, an online retailer can use middleware to handle the information flow between its various systems, such as customer relationship management (CRM), inventory control, and storefront.
Pros:
Simplifies integration by serving as a mediator between different systems and platforms.
Makes connecting various corporate systems and data sources easier.
Cons:
Requires time and investment to select and implement the right middleware.
Ongoing maintenance and updates rely on third-party vendors, which leads to dependency issues.
Real-time Integration
Real-time integration means your ERP and MES systems continuously exchange data and respond immediately to changes. For example, if inventory changes after a purchase, that is reflected across your systems instantly.
Pros:
Enables faster decision-making based on the most current data.
Ideal for intense manufacturing environments where real-time updates are crucial.
Cons:
Resource-intensive, requiring a strong infrastructure to handle constant data flow.
Complex and expensive to implement, especially across large-scale operations.
Cloud-based Integration
Cloud integration connects your ERP and MES systems through a centralized cloud platform, making data access and sharing easy for different branches or departments across your manufacturing network.
Pros:
Scalable and flexible to accommodate future growth and evolving needs.
Reduces the overhead costs of maintaining physical infrastructure and servers.
Cons:
Dependent on internet reliability, which is an issue in remote or rural locations.
Cloud trust issues due to regulatory compliance and data security fears.
Custom API Integration
Custom APIs are customized to link your ERP system with your MES via File Transfer Protocol (FTP), providing a smooth data flow. This can help create a direct communication line between a manufacturing company's production processes and business operations.
Pros:
Offers a personalized solution ideally suited to the company’s specific needs.
Gives you complete control over the data flow and how it’s accessed and used.
Cons:
It needs a lot of skill and effort to develop.
Maintaining and updating APIs can be challenging, especially if system requirements change.
Point-to-Point Integration
Point-to-point integration directly connects two systems, such as linking your ERP system to specific production equipment or your MES. The goal here is to create an uninterrupted data flow between key systems without the need for intermediary software or platforms.
Pros:
Simple to set up for small, targeted integrations.
Rapid sharing of information amongst the various systems.
Cons:
Scalability issues pop up when integrating new systems because each new connection creates additional integration points, leading to a vast web of direct links.
Long-term maintenance is challenging.
Industry 4.0 Integration
The Industry 4.0 MES system integration encourages the development of a functional namespace, a shared directory for ERP and MES data.
An IIoT (Industrial Internet of Things) platform retrieves all the data and links ERP and MES software. REST API, SQL request, or any other connector is used to integrate the ERP and IIoT applications. When data in the ERP system is updated, the IIoT platform automatically grabs the new data and adds it to the namespace.
Using a namespace, an ERP can set up a subscription to monitor changes. This integration gives the ERP and MES systems access to all the data collected by each system, not just custom or limited connections, ensuring that both systems stay up-to-date and connected.
Once ERP and MES systems are effectively integrated, manufacturers can gain access to a range of powerful advantages that enhance efficiency, visibility, and decision-making across the enterprise. Let’s explore them in more detail.
Benefits of MES-ERP Integration
ERP cannot reach where MES can: the shop floor. By integrating ERP and MES systems, companies connect the factory with the rest of the organization. The integration brings numerous advantages for your company. Let’s explore them in detail.
Real-time Data Synchronization and Visibility
Integration makes real-time data synchronization feasible, permitting real-time data sharing across ERP and MES systems. MES-ERP integration guarantees uninterrupted data flow from the order stage to the manufacturing line and unites disparate business processes. Business intelligence platforms like Power BI help visualize this manufacturing data.
This visibility's potential to detect obstacles and speed up problem identification and resolution directly leads to increased production.
Enhanced Quality Control
Businesses can find patterns and trends in their manufacturing operations using ERP and MES integration to more easily collect and analyze historical quality data. Automated data collection, sharing, and analysis enable real-time item quality monitoring. When flaws are found, shop floor employees are alerted immediately.
For instance, this integration helps track supplies and promptly identify quality issues like defective material. This allows you to return it to the vendor for examination, preventing it from being scrapped. This data-driven approach ensures that consumers receive high-quality products.
Moreover, MES-ERP integration monitors machinery to anticipate maintenance requirements and modify workflow accordingly.
Accurate Demand Forecasting
ERP and MES software combine to connect shop floor operations with customer service, logistics, and delivery. This lets manufacturing businesses maintain inventory levels and forecast demand more accurately.
Understanding the proper stock levels guarantees that neither personnel nor equipment will experience downtime due to unfulfilled orders. Staying on top of inventory requirements allows you to avoid rush orders and quickly adjust to customer demand by understanding consumer insights.
Reduced Expenses with JIT Inventory Management
Just-in-time (JIT) delivery enables manufacturers to receive inventory when it is needed, saving space and avoiding the carrying costs associated with a stock that is not yet ready for use.
ERP-MES system integration helps you manage inventory more effectively by coordinating sales and service with production to comprehend supply needs and cut costs. These savings, in turn, can be passed on to your customers to increase your market share and competitive edge.
Apart from enabling you to free up warehouse space for growing manufacturing activities, JIT delivery can assist you in determining when more workers are required on the production floor.
Substantial Reduction in Human Error
Due to automation, there is less dependence on manual operations and complex paperwork, which also reduces the risk of human errors. Additionally, this lowers the amount of manual labor and expenses required to enter data into the ERP system.
Optimized Production Planning and Scheduling
Integrated systems make dynamic production planning possible, which leads to optimized production planning. When integrated with ERP, MES software offers crucial insights into the activities occurring on the shop floor and stores the available production data in a central repository. Production scheduling is also done automatically.
This lets manufacturers minimize costs and waste by efficiently allocating resources, reducing waste, and swiftly adjusting production schedules in response to changing market demands.
Although ERP and MES integration can significantly benefit a business, several challenges need attention.
ERP and MES Integration: Major Challenges
Despite bringing significant benefits to a manufacturing company, ERP and MES integration have their share of challenges you must consider and address. Let’s look at some key ones.
Disparate Systems and Data Formats
Different systems often have their own data formats, structures, and communication protocols, making it difficult to work correctly together. For instance, an ERP system from Microsoft Dynamics 365 Business Central uses a data format different from that of a MES system from SAP. These differences can lead to data incompatibilities, causing delays or errors in communication.
To overcome this, manufacturers must carefully map and process data across both systems, ensuring that the data from the MES system can be understood and correctly interpreted by the ERP system. This involves converting formats and standardizing communication protocols.
Complexity of Manufacturing Processes
Manufacturing processes vary significantly from one company to another or even between different departments within the same company. For example, a corrugated box manufacturer will have very different production workflows than an automotive manufacturer.
This variability makes standardizing ERP-MES integration difficult. Each system must be customized to accommodate unique production workflows, which can be complex and resource-intensive.
Costs and Budget Constraints
Integration of ERP and MES systems is expensive, especially for small and medium-sized manufacturers. The cost of software, hardware, and skilled personnel strains budgets.
Without proper planning, these expenses can deter businesses from pursuing integration, even though it can lead to long-term efficiency gains.
Manufacturers must often carefully evaluate their budget constraints and explore cost-effective solutions that balance functionality and price.
Resistance to Change
Employees who are used to legacy systems often resist adopting a new integrated solution. For example, production line operators accustomed to tracking inventory or adjusting schedules manually may feel uncomfortable with an integrated system's automated processes. This resistance slows down the implementation process, affecting productivity and user adoption.
Addressing this challenge requires a comprehensive change management strategy, including employee training, clear communication, and gradual transition plans that allow workers to become familiar with the new systems before full implementation.
Interoperability with Third-Party Applications
Manufacturers frequently depend on specialized third-party apps to handle activities like supply chain analytics and predictive maintenance. Integration becomes more difficult if these third-party apps lack common interfaces or APIs to link to the ERP and MES systems.
For instance, a factory may find that third-party software for equipment maintenance does not operate well with the ERP or MES system, necessitating further effort or custom development to enable good communication between the two systems. This involves technical expertise, effort, and additional expenses.
Ready to overcome your ERP-MES integration challenges? SB Infotech leads where others fall short. With our industry expertise, dependable add-ons like CorrEx, and a proven track record in customization, we transform siloed obstacles into successfully integrated systems.
To assess and resolve the above MES-ERP integration challenges, you must be aware of a few hacks, which we’ll discuss next.
Tips for Optimizing MES and ERP System Integration
Specific tips or best practices will help you tackle the above challenges and ensure a smooth integration between your ERP and MES systems. Let’s look at them.
Define Business Objectives
Establishing your business goals is crucial before integrating MES and ERP systems. Clearly define the business needs so that you know what you want to accomplish. Do you want to improve decision-making, automate procedures, or boost visibility? What data do you want to exchange between ERP and MES systems?
By clearly stating your goals, you can identify the required features and functions and ensure the integration process aligns with your business objectives.
Assess Legacy Infrastructure
Examine the existing infrastructure to understand its technical limitations. Check out the supported technologies to determine whether there’s a need to develop additional middleware.
Choose the Right Software and Approach
Selecting the appropriate MES and ERP software is essential for a successful integration. Ensure the software offers the required features and functionality and can be integrated easily. When choosing the integration strategy, take the legacy architecture into account.
Implement Data Mapping and Transformation
Additional infrastructure and middleware are required to connect ERP and MES systems. Ensure your IT and manufacturing teams collaborate to develop custom data mapping tools for validating and transforming transactional and event-based data obtained from MES/ERP systems.
Test, Monitor, and Evaluate the Integration
Launch the ERP and MES integration in a live production setting. Use analytics and reporting tools to track performance and pinpoint areas for improvement. Verify the fetched or shared data to ensure the transformation is accurate. Optimize data-sharing pipelines to reduce the bandwidth and processing power needed to handle all the data.
Lastly, don’t forget to review your goals frequently and make necessary adjustments to the integration process.
The Future of ERP and MES
Given the rapid development of technology, the manufacturing sector is expected to experience rapid growth. In the future, MES and ERP integration will be more cloud-based, flexible, and connected to a wide range of devices through the Internet of Things (IoT).
Industry 4.0 encourages wireless sensor and actuator networks for in-progress production modifications. On the shop floor, RFID tags are frequently used to monitor things still being worked on and control asset availability and usage. A contemporary ERP and MES system can use this innovative technology to monitor all manufacturing operations.
Moreover, by creating a "virtual twin," businesses can analyse how different factors (such as machine performance or production line changes) will impact overall operations before implementing them in the real world. This approach helps to avoid costly mistakes, improve efficiency, and optimize resource utilisation.
How SB Infotech Helps with ERP-MES Integration?
Integrating ERP and MES systems is crucial for consolidating production processes and enhancing operational efficiency. At SB Infotech, we specialize in creating smooth connections between your ERP and MES systems, customized to your specific manufacturing needs.
Here’s how our expert team ensures that the integration process is smooth, future-ready, and designed to optimize both data flow and decision-making across your operations.
Industry-Specific Expertise
With years of experience across manufacturing sectors, we tailor ERP-MES integrations to your unique operational needs. Whether you're in corrugated packaging, auto components, packaging, logistics, or any other specialized field, we understand your workflows and customize the integration for maximum impact.
Seamless Communication Between Systems
We ensure that your ERP and MES systems talk to each other effectively, enabling smooth data exchange between the shop floor and business management systems. Our expertise ensures that each tool, from Business Central to Power BI and Jet Reports, is fine-tuned to your business operations. This provides real-time access to production data, reducing delays and improving decision-making.
Effortless Integration
Whether you need integration with third-party tools or external APIs (like E-Invoice and e-way Bill), we ensure your ERP system is fully connected with MES and other software. This ensures smooth data exchange and reduces the risk of errors, saving you both time and money.
Minimized Downtime and Reduced Errors
We focus on eliminating inefficiencies in your processes by reducing the risk of errors and downtime. Our integration strategies aim to keep production running smoothly and ensure that your business always operates at peak efficiency.
Future-Ready, Scalable Solutions
Our systems are adaptable to future changes, new business or manufacturing processes, and additional locations, allowing your operations to expand without requiring complete overhauls.
Comprehensive Support and Maintenance
From the initial setup to ongoing support, we stand by our clients. Our team provides continuous post-implementation support to resolve issues before they become problems, ensuring your systems continue to perform optimally.
CorrEx: ERP and MES Integration for the Corrugation Industry
One of our flagship offerings, CorrEx, is a comprehensive add-on for Microsoft Dynamics 365 Business Central, explicitly designed for the corrugation manufacturing industry.
Here's a quick overview of its unique features:
Finished Goods Specification: Record technical details of finished products, including material specs, flute types, dimensions, and durability calculations.
Process Routing: Standardize operations with pre-set templates, quality checklists, and inspection sheets to ensure uniform product quality.
Subcontracting Management: Track outsourced tasks, monitor subcontractor performance, and maintain real-time visibility into work progress.
Gate Inward/Outward Management: Enhance logistics security by capturing material receipts, shipments, and vehicle details for improved inventory tracking.
Reel Management: Track paper reels used in production, optimize stock, reduce waste, and improve inventory efficiency.
Dispatch Scheduling: Plan shipments based on order priority and production status, and optimize delivery routes to ensure on-time deliveries.
Machine Integration: Automate communication between ERP and production machines for real-time monitoring, reducing downtime, and improving efficiency.
With CorrEx, you don’t just get an ERP extension, you get a complete digital backbone that links high-level business planning (ERP) with on-the-ground production control (MES). This two-way data exchange ensures:
Smarter production decisions based on real-time ERP data
Accurate cost and inventory tracking from the shop floor
Faster response to operational changes or delays
Contact our experts to explore how ERP-MES integration can align your manufacturing processes and business operations and drive growth.
Conclusion
Integrating ERP and MES systems is a powerful strategy for manufacturers looking to streamline their operations and improve overall efficiency. By combining ERP's strengths in managing business processes and MES's strengths in controlling shop floor operations, businesses can enhance data visibility, reduce hindrances, and ensure smoother production workflows.
However, successful integration requires overcoming challenges such as disparate systems, complex manufacturing processes, and cost constraints. With the right approach and strategic planning, these challenges can be addressed, leading to significant improvements in productivity, quality control, and cost management.
If you’re looking to implement ERP-MES integration for your business, consider working with a partner who understands not just ERP and MES software but the realities of your industry. This will ease things for your business and improve ROI in the long run.
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