The Global Assembly Journal for SMT and Volume 11 - - PDF document
The Global Assembly Journal for SMT and Advanced Packaging Professionals Volume 11 Number 9 September 2011 ISSN 1474 - 0893
Rob Boguski & Matt Holzmann Interview Inside
www.globalsmt.net
10 – Global SMT & Packaging – September 2011 www.globalsmt.net Manufacturing execution systems vs. ERP/MRP
Introduction
In today’s complex electronics assembly environment, plant managers have an ever-increasing need for greater manage- ment insight and control over all phases
Manufacturers are constantly being chal- lenged to find new and better ways to meet changing production demands and sched- ules, automate manual processes, reduce
costs,
production throughput and achieve new efficiencies that ultimately lead to greater profitability. Realizing these outcomes requires new technologies, tools and processes that can deliver significant new capabilities for production improvement, materials man- agement, traceability, process enforcement and quality management. A comprehensive, integrated approach is crucial for provid- ing real-time visibility and effective utiliza- tion of shop floor data for better planning, decision-making and execution across every aspect of the production process. Te question is…can manufactur- ers achieve these outcomes through their enterprise resource planning (ERP) and manufacturing resource planning (MRP) systems alone—or does it require the spe- cialized functionality that only a manu- facturing execution system (MES) can provide?
ERP and MRP: The
ERP and MRP systems have traditionally provided the essential operational back- bone for manufacturing companies. While ERP systems are key for facilitating the flow
inside the boundaries of the organization, as well as the company’s connections to
the production planning and inventory control capabilities needed to effectively manage manufacturing-specific resources. Tese systems offer an array of capa- bilities for enabling companies to effec- tively and efficiently control many critical aspects of their operations, with signifi- cant inherent value for finance and supply chain departments. More specifically, ERP/ MRP systems typically help companies standardize and automate key business practices, gain visibility into mission-crit- ical data, manage customer relationships, achieve compliance with financial report- ing requirements, maintain better inven- tory control and more efficiently manage company resources. Companies typically implement ERP/ MRP systems to alleviate major business pressures, such as lowering operational costs, increasing scalability for accommo- dating growth, and improving customer service and satisfaction. More specifically, an ERP system effectively translates a cus- tomer order into a “sofware roadmap” for monitoring the various steps along the path to fulfilling that order—while the MRP system helps the company plan and manage the manufacturing resources asso- ciated with that order, such as materials purchasing, bill of materials processing, and overall inventory control. By establishing standardized opera- tional procedures and automated processes, manufacturing can be better integrated with logistics and delivery, and real-time visibility can be gained into the status of processes from “quote to cash”—which in turn enables better management insight and decision-making. Te following sum- mary provides a high level snapshot of some of the main motivating factors that drive companies to implement ERP/MRP systems into their core operations: Integration of financial information: By providing a consolidated repository for all financial information, to be used by all
Can manufacturers achieve greater management insight and control over all phases of the manufacturing production process through their enterprise resource planning (ERP) and manufacturing resource planning (MRP) systems alone—or does it require the specialized functionality that
a manufacturing execution system (MES) can provide? This paper explores the key considerations and issues that surround this
to dispel the myths, realities and misunderstandings regarding the roles each of these systems play in today’s electronics manufacturing environment.
Bill Crowley, Optimal Electronics, Austin, Texas, USA
Global SMT & Packaging – September 2011 – 11 www.globalsmt.net Manufacturing execution systems vs. ERP/MRP
departments and functions, the company can establish what could be called a “single version of the truth” that cannot be ques- tioned. Integration of customer order infor- mation: With a centralized place for customer orders to “live,” companies can more effectively track and manage an
service rep receives it) to fulfillment (when the loading dock ships the mer- chandise) to completion (when finance sends the invoice). Tis enables the effective coordination of manufacturing, inventory and shipping across multiple locations, simultaneously. Standardization and integration of manufacturing into business processes: Te implementation of ERP/MRP systems provides some basic management controls, workflow capabilities, and visibility into the manufacturing processes—especially as it relates to the integration of manufac- turing with other business processes, such as finance, supply chain and inventory management functions. Reduced inventory: By improving the visibility into customer order fulfillment, plant managers can reduce the inventory
in-progress inventory)—and improve planning for order delivery, thereby reducing finished goods inventory in the warehouse. Standardized collection and delivery
By establishing a simple, unified method for tracking employee time and deliver- ing information regarding benefits and company-provided services, an organiza- tion can establish valuable standardized HR processes and data access for all employees.
MES: The manufacturing execution foundation for electronic assembly
Also known as “shop floor control systems”
, manufacturing execution systems (MES) can be defined as dynamic information systems that drive effective execution of manufacturing oper-
cesses are ofen manual and “open loop” to the company’s ERP/MRP systems, which is inherently a sub-optimal approach. In most manufacturing environments, an MES is essential for providing the manu- facturing-specific functionality companies need to gain greater control and visibility at the shop floor level—far beyond the functionality that ERP/MRP systems pro- vide. However, some of the larger ERP/MRP solution providers have identified this “gap” in their offering and have incorporated MES-related capabilities in an attempt to
Funcitonality MES ERP/MRP Comments Inventory Control
adequate capabilities are not provided for effectively tracking materials
materials, they provide only aggregate materials data (i.e., 20,000 total parts vs. 10,000 parts on two reels each). Pre-production Control
however, no additional capabilities are provided for other important pre- production activities.
ing online/offline setup verification processes. Production control
ments, machine control, and optimized production scheduling achieved via direct machine interfaces on the production line.
are free to ignore). Material/Component Traceability
reference designator for each circuit
ments, machine control, and optimized production scheduling achieved via direct machine interfaces on the production line.
are free to ignore). Process Traceability & Control
tion & traceability
control for machines or manual scan stations, and data capture to verify completion of each step.
Quality Management
etc.) and automatically collects process, quality and defect data.
and returned product.
Legend: = full functionality, = partial functionality, No = no functionality Table 1. ERP/MRP vs. MES comparative summary
12 – Global SMT & Packaging – September 2011 www.globalsmt.net Manufacturing execution systems vs. ERP/MRP
MRP companies have generally added these capabilities by acquiring successful MES solutions and integrating those solu- tions into their existing systems. While these integrated capabilities provide signif- icant value for electronics assembly com- panies, securing this functionality from the ERP/MRP provider ofen requires an investment level that is only afforded by the industry’s largest manufacturers. Securing manufacturing execution capabilities from a third party MES solu- tion provider offers a variety of key advan- tages:
provided in a modular fashion, which allows manufacturers to purchase and implement these capabilities incrementally over time. Tis not only reduces the need for major upfront capital expenditures, it also reduces the transition barriers that can be cre- ated by a comprehensive, “all-in-one” system exchange.
systems can be a relatively straightfor- ward process; therefore, the required information can be easily shared across the systems, resulting in signifi- cantly lower overall investment levels.
turing execution capabilities; therefore these companies are better positioned to offer the precise functionality required to meet the unique needs of specific manufacturing verticals. As a result, MES-specific solutions ofen provide an added level of value that ERP/MRP solutions simply cannot provide. Utilizing a centralized database, the foundational capabilities delivered by a quality MES system include the full range
need to effectively control, monitor and manage all phases of the electronics assem- bly process:
inventory and warehouse manage- ment, materials tracking throughout the plant, and materials serialization, and MSD control, bar code and RFID data collection.
ing kitting, offline and online setup verification, feeder management and work-in-process tracking.
uling, programming, optimization, single component library, assembly modeling, production line monitoring, finished goods tracking, scrap report- ing, materials issues, manual assembly processes, machine setup and down- time, electronic setup instructions and routing control.
including process definition and enforcement, multi-level routing, full process traceability, verification and data collection across the production facility.
ity and defect data collection for automated equipment and manual processes, to support for repair and returns processing.
tion access and visibility across the production process, as well as histori- cal reporting.
Since ERP/MRP and MES systems offer varying types of functions and features, their most basic functionality differences and overlap should be clarified. At a high level, it is important to note that ERP/MRP systems generally do not provide some of the most critical capabilities needed for effectively managing key manufacturing processes, data and activities. For exam- ple, typical ERP/MRP systems lack the machine interfaces needed to enable data collection from manufacturing equipment; they offer no traceability, process control,
they provide no modeling capabilities for plant equipment or processes. Te ERP/MRP vs. MES comparative summary shown in Table 1 provides a more detailed view into the specific role that these solutions play in the overall pro- duction process.
A closer look at MES capabilities
Te following overview provides a more in-depth look at the key functionality and additional layers of value that an MES solu- tion offers, beyond the basic capabilities delivered by traditional ERP/MRP systems. Production scheduling In many production environments, the critical task of production scheduling is done in a manual fashion using a white- board or a simple spreadsheet. Tis is due to the fact that companies who rely solely
ity to automate and optimize the overall scheduling process, since these systems deliver work orders into the production process on a one-by-one basis. Given the myriad variables and data involved, sched- uling is an inherently complex challenge—
with a manual approach. Te primary issue that manufacturers need to address in the scheduling phase is “how can machine utilization be fully maxi- mized?” Te key is to shif the production paradigm away from the manual one-by-
mated job clustering approach that aims to
Snapshot: Rockwell Automation
Case Study Metrics
Award Before MES implementation
Afer MES implementation
14 – Global SMT & Packaging – September 2011 www.globalsmt.net Manufacturing execution systems vs. ERP/MRP
extract maximum equipment capacity. Te clustering capabilities provided by an MES solution enable manufacturers to increase utilization by automatically grouping as many work orders as possible into a single production run, based on the maximum capacity the line equipment can support. By creating larger work-order group- ings, the clustering approach enables pro- duction lines to run longer, drastically reducing the number of changeovers and minimizing machine downtime, as well as streamlining and reducing kitting require- ments. New dynamic scheduling optimiza- tion technology takes this approach one step further by allowing the production schedule to be dynamically adjusted and re-optimized as new work orders enter the production stream. By optimizing the fixed feeder setup, rather than just the groups, the range of assemblies that can be included in a group is much broader, fur- ther increasing production and flexibility. Tis new automated dynamic optimization approach enables manufacturers to maxi- mize production capacity far beyond the gains that can be achieved with basic work
Kitting With traditional ERP/MRP-centric approaches, the kitting process is initiated by the plant’s production control depart- ment, based on the shop floor order as generated by the ERP/MRP system. Te production control department verifies the materials availability for each part number and orders additional parts when short- ages are identified. Te kit is then released to the stockroom for picking and is typi- cally routed to the offline setup area within 48 hours. Te primary issue with this approach is that ERP/MRP systems are ineffective at maintaining accurate and real-time inventory information, as materials move throughout the shop floor during kitting and restocking. In most cases, a plant’s ERP/ MRP system only contains data regarding the total quantity of a part type, and does not capture how the material is delivered (i.e., 20,000 total components vs. four reels
larity, combined with frequent stockroom errors, leads to kitting problems such as insufficient or excess component quanti- ties, wrong components, incomplete kits, insufficient quantities of component pack- ages (quantity of reels for split parts, for example). Manufacturers can utilize the auto- mated capabilities of an MES solution to dramatically reduce, or eliminate, kitting
capabilities provided by an MES solution streamlines the kitting process by identi- fying components that can be lef on the shop floor for the next production run, and directing kitting personnel to only pick the remaining components required. Tis approach provides additional production
counts on the line being displayed in real- time in the stockroom, part outages on the production floor can be eliminated. Also, automated part usage counting on the line can totally eliminate the need for manual part counting afer reels are returned to the stockroom. Setup verification With the implementation of an MES, man- ufacturers can achieve new levels of pro- duction efficiency by streamlining offline and online setup verification processes. Automated setup and verification enables materials traceability data to be collected in real-time, machine setup time dramati- cally reduced, and component tracking significantly improved. Additionally, the possibility of wrong component place- ment can be eliminated and advanced part outage warnings can further reduce machine downtime.
ties are used in the stockroom or the point-of-use setup area to associate materials license plates to the feeders for each setup. Offline setup function- ality that can be provided by an MES includes such capabilities as parts and substitute parts verification and feeder unloading and checking.
setup verification to be automatically performed on the assembly machine, at assembly time. Te system verifies that the assembly machine program- ming matches the specified materials and their designated slot locations. Online setup capabilities provided by the system include such functions as initial setup and feeder changeover verification, setup and component moving, splicing, print setup configu- ration, setup and materials history viewing, feeder unloading history, machine status and scanned panels listing. Process traceability and quality management A comprehensive MES provides process enforcement and traceability capabilities for the electronic assembly line portion
PCB and panel serialization through ship-
is enabled by placing electronic scanners at strategic points along the assembly line to scan serial numbers of board assemblies
Snapshot: Automotive Contract Manufacturer
A major auto manufacturer was experiencing costly machine down- time due to lack of offline setup capa-
this challenge by implementing an MES which provided fully auto- mated offline setup and verification capabilities. Before MES implementation
Afer MES implementation
33%
eliminated
16 – Global SMT & Packaging – September 2011 www.globalsmt.net Manufacturing execution systems vs. ERP/MRP
and panels, allowing specific activities to be tied to the assemblies and their work
Te overall system goals for this aspect
process enforcement, validation and veri- fication, but also complete traceability for capturing and reporting process param- eters for each routing step for each panel
capabilities are key for minimizing defects, improving quality consistency and certify- ing process conformance. With regard to quality management, MES solutions can deliver significant functionality that enables manufacturers to effectively capture and manage defect information, address repair conditions, manage defect codes, and view quality metrics reporting including the identifica- tion of boards with frequent defects. An MES typically provides for defect inputs from quality inspections and repair, as well as for defect tracking. Defect data collec- tion is integrated with work order routing and typically includes such information as status, defect, component part number, reference designator, operation, quantity, log time and component placement on the board.
ERP/MRP meets MES: From coexistence to integration
Until recently, it could be said that “what happened on the plant floor, stayed on the plant floor.” While the company’s MES managed the manufacturing plan- ning, processes and information at the plant level, ERP/MRP systems hummed along, operating independently, back on the corporate side of the world. However, as a rapidly growing number of companies have realized, to be profitable in today’s competitive environment, a manufactur- ing organization must not only leverage the strengths of each system, they should be tightly integrated. Trough the integration of these sys- tems, manufacturers can establish a more powerful, holistic view across all the key functions of the organization—from over- all business operations to the myriad man- ufacturing-specific aspects. Tis provides much greater agility and better data to aid in decision making and forecasting, from sales and purchasing to asset utilization, hiring and manufacturing planning. However, it is important to note that while both MES and ERP/MRP systems can provide a view into what is happening within a the specific aspects of the business, ERP/MRP systems can only provide a snap-
agement a way to utilize, react to and con- trol the manufacturing processes and events being tracked. While ERP/MRP systems are essen- tially a reporting technology, an MES pro- vides real-time visibility into shop floor
respond—and monitor the immediate results that occur from adjustments. MES systems can feed accurate, timely informa- tion in the ERP/MRP system, such as pro- duction levels, work-in-process status, and part and serial numbers for tracking pur-
dard database protocols, an MES can pro- vide effective synchronization with MRP/ ERP systems by importing and exporting such information as inventory and BOM data, storage locations, customer and work
and scrap reporting. Tese integrated capabilities are espe- cially valuable in today’s competitive envi- ronment, where the marketplace demands faster and leaner manufacturing response times—and where visibility into the plant floor system is increasingly important for responding to customer questions regard- ing delivery times and parameters. Also, the return on an ERP/MRP investment can be significantly increased by integrating it with the accurate, real-time, plant level information that an MES provides.