Why Are We Still Talking About MES–ERP Integration?

Every few months, I still come across discussions about how to integrate MES and ERP. And every time, I find myself asking: why are we still talking about this?

It’s a bit like asking whether a boat floats. The answer is obvious—yes, it does. The real question is where is it going and why are we on it?

Integration Isn’t the Problem

Let’s be clear: integration between MES and ERP is not new, nor is it unsolved. For decades, manufacturers have been connecting these systems to exchange the information that keeps their operations running. I challenge you—have you ever heard of an MES system that couldn’t integrate to ERP?

The technology is there. APIs, middleware, standardized data models, cloud-native platforms—the tools have only gotten better. Integration is no longer the hard part.

As I wrote in an earlier post "About Accountants and Production", ERP and MES have always been about different things. ERP is designed for financial management (order-to-cash) - transactions, costs, compliance, reporting. MES is built for the shop floor—real-time visibility, control, and execution. Each system has its domain. Integration ensures they don’t talk past each other.

But the value doesn’t come from whether or not you can connect the two. It comes from what you do with that connection.

From Technical to Value-Driven

When integration conversations remain technical—what middleware to use, which API calls to expose—we miss the bigger picture.

The true conversation should be:

• What processes, operations and decisions do we want to improve?
• What outcomes are we aiming to achieve?
• What value will the integration unlock for the business?

For example, integrating to have a streamlines and effective work order execution from ERP to MES is not valuable because the two systems are connected. It’s valuable because it eliminates manual re-entry, reduces errors, speeds up production scheduling, and ensures financial systems reflect operational reality in near real time.

Integration is the means. Value is the end.

Enter the Age of Digital and AI

We’re well into the era of digital, transformation is ongoing and constant, and AI in manufacturing is becoming a reality. Advanced analytics, machine learning, digital twins, and agentic AI are reshaping how operations are managed and humans work. Against that backdrop, spending time debating MES–ERP integration feels outdated.

The real opportunity is to ask: how do these systems, together, create the digital backbone that enables AI to bring operational insights that deliver business value?

ERP knows the plan. MES knows what actually happened. AI thrives when it can see both and spot patterns across them—optimizing schedules, predicting disruptions, and suggesting interventions. That’s the conversation worth having.

Time to Move On

So let’s put this to rest: MES and ERP can integrate. They do integrate. The technical questions have answers.

The real debate—the one that matters in the age of digital and AI—is about value. How do we design our digital architectures, processes, and cultures so that integration serves as the foundation for smarter, faster, and more agile manufacturing? Shift the focus from can we integrate? to what value will the integration deliver?

About Accountants and Production Managers: ERP vs. MES

This is a rewrite of a whitepaper that I published in 2004 based on a long and frustrating MES selection process where the "can I use my ERP as MES" misunderstanding went rampant. I find that the discussion is still very relevant today and the topic gets even more confusing with some of the emerging digital technologies in this space. So this is an attempt to bring more clarity...

About ERP and MES

With today’s increasingly accelerating manufacturing technology innovation, digital transformation is critical for staying competitive. Among the key systems that have traditionally driven manufacturing operations are Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) systems. The myriad of opinions and discussion on these concept in the context of digital transformation and therefore understanding the differences between these two systems is crucial. In addition, as digital technologies continue to advance, the lines between MES and ERP are increasingly blurring, especially with the advent of No-Code democratization and Frontline Operations Platforms. I have found that and effective ways to conceptualize this is through the analogy of a production manager and a company accountant.

The Accountant: ERP’s Role in Manufacturing

In the last decade ERP systems have seen massive proliferation into many businesses, including manufacturing businesses. These businesses have invested heavily in ERP systems and today struggle to realize payback from these investments. In the case of manufacturing businesses, realizing ROI is logically focused on the production floor, an area in which ERPs are traditionally considered weak.

As the ERP market becomes increasingly saturated, vendors are looking for ways to increase revenue and expand their footprint. ERP vendors have turned their attention to shop floor management and manufacturing execution systems (MES). By adding MES functionality, they can increase license revenue. 

Consider the role of an accountant in a manufacturing company. The accountant manages financial records, oversees budgets, handles payroll, and ensures that all financial transactions comply with regulations. Their work involves high-level data analysis, financial forecasting, and strategic decision-making that influences the entire organization. This is akin to the role of an ERP system.

At their core, ERP systems are advanced accounting information management systems, they are enterprise-wide management tools designed to integrate various functions across a business. In manufacturing, ERP systems handle tasks such as procurement, inventory management, finance, human resources, and supply chain operations. They provide planning tools like Material Requirements Planning (MRP) and Manufacturing Resource Planning (MRP II), which help companies predict future resource needs based on historical data and forecasts.

However, despite their comprehensive nature, ERP systems are not designed to manage the real-time, dynamic environment of the production floor. They excel at providing a broad, strategic view but lack the granular control needed to manage the intricacies of manufacturing processes. Just as an accountant isn’t equipped to manage the day-to-day operations on the production floor, an ERP system isn’t designed to handle the real-time demands of production management.

The Production Manager: MES’s Role on the Shop Floor

MESs have evolved to address the inherently complex production management functions. An MES is a specialized system focused on the shop floor, where it manages real-time production activities. It coordinates equipment, workers, materials, and processes to ensure that production is carried out according to plan. Unlike ERP systems, MES operates in real-time, responding instantly to changes and ensuring that production goals are met. It tracks production data minute by minute, making it possible to identify and correct issues as they arise.

Imagine the role of a production manager. This person is in the thick of things, ensuring that production runs smoothly and efficiently. They manage workers, monitor machines, and make real-time decisions to keep everything on track. The production manager is intimately familiar with the production process, knows when to adjust schedules, and reacts quickly to any disruptions. This role exemplifies what an MES does in a manufacturing environment.

While ERP provides a high-level overview of production schedules and resources, MES is concerned with execution ensuring that production is executed as planned. MES is deeply integrated with the physical aspects of manufacturing, enabling it to manage the nuances of the production process that ERP systems cannot.

Differences Between MES and ERP

Aspect	ERP  (Enterprise Resource Planning)	MES  (Manufacturing Execution System)
Scope and Focus	Covers a wide range of business functions across the entire enterprise. Designed for strategic planning and resource management across departments.	Specifically focused on the production floor, with deeper engagement in executing production processes, equipment monitoring, and labor management.
Data and Time Frame	Deals with high-level, aggregated data, often historical or forecast-based and financially biased. Works on a broader timeframe for long-term planning and decision-making.	Operates in real-time, handling detailed, granular data from the shop floor, responding immediately to production needs.
Integration and Flexibility	Integrates various business functions but often lacks the flexibility needed for real-time adjustments on the production floor.	Highly flexible and adaptable to the dynamic environment of manufacturing. Integrates with machinery, sensors, and other shop floor systems.
Decision-Making	Supports strategic, long-term decision-making at the corporate level, focusing on overall financial business performance and resource allocation.	Highly flexible and adaptable to the dynamic environment of manufacturing. Integrates with machinery, sensors, and other shop floor systems.

Blurring the Lines: How Digital Technologies Are Redefining MES and ERP

As digital transformation continues to reshape manufacturing, the era of traditional monolithic MES may be coming to an end. New technologies and platforms are presenting a different way to solve the shop floor management coordination challenge. Based on the foundations of MES these new solution incorporate advanced digital technologies such as No-Code, IIoT (Industrial Internet of Things), machine learning, AI-driven analytics, Generative AI and enhanced user interfaces. They offer a more holistic view of manufacturing operations, providing real-time insights that empower workers on the shop floor to make data-driven decisions.

Unlike traditional monolithic MES, which focused solely on production execution, the new breed of technologies leading with the Frontline Operations Platforms encompass a broader range of activities, including quality control, maintenance, lab operations, inventory management, and workforce training. This transformation is a direct response to the growing need for systems that not only manage production but also integrate seamlessly with other digital tools and platforms to enhance overall operational efficiency. It also aligns with the broader digital paradigm, where the goal is not just to automate existing processes but to create a more connected, intelligent, and responsive manufacturing environment. The integration capabilities of Frontline Operations Platforms enable a seamless flow of information between the shop floor and the enterprise level, blurring the traditional lines between MES and ERP.

Several key trends are driving this convergence:

1. IIoT and Real-Time Data Integration:

The proliferation of IIoT devices on the shop floor allows for the real-time collection and analysis of data. This data can be fed into both MES and ERP systems, enabling more informed decision-making across all levels of the organization. For instance, real-time production data captured by IIoT sensors can be used by the ERP system to adjust supply chain logistics or by the MES to optimize production schedules on the fly.

2. Advanced Analytics and AI:

Machine learning and AI are increasingly being used to analyze the vast amounts of data generated by manufacturing processes. These technologies enable predictive maintenance, demand forecasting, and process optimization, functions that traditionally belonged to either MES or ERP. The use of advanced analytics allows these systems to overlap, as both can now contribute to strategic and operational decision-making.

3. Human Centric Platforms:

The new no-code platforms take a human centric approach that break down the traditional process centric solution. They allow to build solution that can be used across manufacturing modalities and also allow to combine MES and ERP functionalities blurring the lines between the two. The new solutions provide a democratized platform for managing all operational process. Workers on the shop floor, managers, and executives can all access the same platform, though with different levels of detail and control, depending on their role.

4. Cloud Computing and Edge Computing:

The shift towards cloud-based solutions and edge computing is enabling greater integration and scalability of MES and ERP systems. Cloud computing allows for centralized data management, making it easier to integrate MES and ERP data. Edge computing, on the other hand, brings computational power closer to the production site, enabling real-time data processing and decision-making that benefits both MES and ERP functions.

5. Interoperability and Open Standards:

Increasingly, manufacturers are adopting interoperable systems that can communicate with each other through open standards. This trend is making it easier to integrate MES and ERP systems, allowing for a more seamless exchange of data and better collaboration between different departments.

The Future: A Converged System for Manufacturing Excellence

The convergence of MES and ERP functionalities into more integrated platforms represents the future of manufacturing. As these systems continue to evolve, they will offer manufacturers the ability to manage both high-level strategic planning and detailed operational execution through a single, cohesive platform. This convergence will enable a more agile and responsive manufacturing process, better equipped to meet the demands of the modern market. The systems are working together more closely than ever, driven by advancements in digital technology that empower manufacturers to achieve new levels of efficiency, flexibility, and innovation.

In Summary...

In the rapidly changing landscape of manufacturing, understanding the distinct yet increasingly interconnected roles of ERP and MES systems is crucial. As digital technologies continue to advance, these systems are evolving and converging, offering manufacturers a powerful toolset for driving operational excellence. The transformation of MES into Frontline Operations Platforms exemplifies this convergence, blurring the lines between strategic planning and operational execution. By embracing these integrated platforms, manufacturers can unlock new opportunities for efficiency, agility, and competitiveness, setting the stage for a new era of manufacturing excellence in the digital age.

Yet, it is naive and risky to assume that one of these systems can be extended to effectively do the other’s job. Similarly, one would not assign an accountant to be a production manager, or vice versa. Each might be an expert in his own field, yet it takes a completely different set of skills, expertise and knowledge to effectively tackle each task.

A Brief Look at MES Products From a Historical Perspective

I am working with a number of Life Science manufacturing companies that have taken a strategic approach for their manufacturing systems landscape. There is a lot of buzz on this topic in the industry, which makes it that much more interesting but with some challenges. I am generally fond of using a historical perspective and so I decided to do the same for the MES software products in the life science industry. This perspective is just mine and I am sure there are many more that can be given by my peers in the industry – a subtle hint.

So let’s start in the 1980’s, the decade that gave us CIM and a growing awareness about the role that computers play in manufacturing operations. The focus at that time was how computer systems, aka software, can be used to increase efficiencies and manage complexity. In fact computer technology was gaining so much momentum that it was considered a major element in revolutionizing the manufacturing landscape in parallel to the advent of the Lean movement.

This gave birth to quite a few Manufacturing Execution System (MES) product companies in the 1980’s. The 90’s then followed by a massive development and spread of information technology, which is now at the core of everything we do today, not only in manufacturing. Manufacturing operations are becoming so dependent on information that these systems have to be considered at a strategic level. Initially this strategic focus was given to expensive business systems such as ERP however it is becoming evident that other systems, specifically MES, sometime have more impact on the bottom line and should be considered equally strategic.

MES software products evolved in different industries and their roots manifest themselves in both the functionality and the corresponding  MES vendor’s organization. Companies and products that currently serve the Life Science industry generally have their roots in the semi-conductor and electronics industry, and understandably also the Life Science industry itself.

In the industries outside Pharma and Bio-Pharma, MES was introduced to deal with the inherent high level of automation and complexity of the high volume manufacturing process where lowering cost and increasing production throughput were crucial. It was virtually impossible to manually manage the wealth and complexity of information and MES provided a solution. The  MES products were centered on a discrete workflow model that allowed rich modeling capabilities while at the same time allowing customizations. In fact early  MESs were merely toolboxes with a workflow engine, rich data modeling capabilities and tools to custom build user interfaces and business logic.

In the Life Science industry the main driver for introducing  MES was compliance or the electronic batch record and therefore the first such systems provided a “paper-on-glass” solution. The idea was to simply digitize the paper batch records, kind of like the old “overhead projectors”. These systems had simple modeling capabilities and did not allow for much customization. In many cases these “paper-on-glass” systems were supplemented with business logic built as customizations in the automation system. They were commonly implemented in pharmaceutical plants, where the focus on compliance meant low tolerance for customizations and a minimum of change after system were commissioned. This resulted in  MES functionality that was split between the heavily customized automation applications and a “canned” paper-on-glass system to deal with batch records. The Weigh and Dispense feature of these systems was used mostly for traditional pre-weigh activities where the materials are weighed and staged before the process.

In the 2000’s a consolidation started in which some of the independent  MES from vendors where acquired by the major automation vendors and positioned into the life sciences industry. This introduced the rich modeling capabilities that grew out of the semi-conductor and electronics industry to the  Life Sciences  industry accustomed to “paper-on-glass” systems. This leaves us today with a wide choice of  MES that are rapidly gaining maturity and sophistication in the form of advanced functionality and interoperability. I think that this maturity is an important factor and plays nicely into the strategic nature of most Manufacturing Systems initiatives that I have been involved in. There is still a long road ahead but I have not been so optimistic about the Manufacturing System domain, in a long time. It certainly looks like there are some very interesting and also challenging years ahead as we work to execute on these strategic initiatives.

Why Do We Still Use Spreadsheets?

Sometimes I find some unfinished article while cleaning up – something I should obviously do more regularly! So here is one of these excerpts that I found particularly relevant as I am discussing the topic of “Manufacturing Intelligence” with a number of companies.

Manufacturing systems software vendors continuously tell us that you cannot have visibility into your operations without a software application, which I have to agree is generally true. This forces us to sift through the onslaught of offerings full of buzz words such as “metrics”, “digital dashboards”, and “business intelligence platforms”. Yet, it is remarkable that one of the most commonly used tools to capture and manage information from the shop floor is The Spreadsheet - typically Microsoft’s Excel. In some cases, even with a major ERP system investment, the Spreadsheet is still the primary source of timely data collection about the manufacturing operations. In other cases, expensive solutions are put in place to capture and collect data from automation equipment but fail to provide the information in a useable context and once again users resort to the spreadsheet.

Why is it then that manufacturing organizations resort to solutions that are based on a spreadsheet? It is typically not because of lack of understanding about information systems or the skills required to use them. It is because a spreadsheet provides the flexibility and ability to manage and present shop floor information in the most useable and advantageous manner. (By the way the common term for “manage and use” is “information consumption”.) Remember that a manufacturing manager’s main focus is productivity and quality. They use this information to obtain metrics about the value stream that they are trying to manage because they need to know how they are performing in real time. This need is similar to that of a sport’s team, where you know where you stand at every second of the game. You don’t have to wait until tomorrow morning’s newspaper to know who won the game. Running a manufacturing operation without real time metrics is like bowling without being able to see the pins. You can see some of the action, you know that something happened, but you don’t know what the result was.

Of course in recent years, manufacturers have gained some visibility with the increased application of technology, but they are still far from what is possible. I also believe that most of the vendors are clearly aware of the needs and I hope that they we will soon start to see Manufacturing Intelligence applications with the flexibility and convenience that we really need.

Applying "Monkeynomics" To Manufacturing Solutions

Once again I am involved with a company that is being steered by the “ERP is all you need” approach. I thought that by now we have come to peace with the fact that different systems provide solution to different problems. That ERP has found its place and made peace with MES and other shop floor systems. Maybe it is just human nature and we cannot stop ourselves from making the same mistakes over again. I was just watching one of the TED talks about "Monkeynomics" (see embedded video below). It seems that we as humans have something called “Loss Aversion”, i.e. we will take risks in order to avoid loss rather than play it safe.  This is an interesting observation that in retrospect explains a few of the odd behaviors that I have seen from companies in the past.



Another phenomenon that I find intriguing is the flawed notion that general economic methods are universally applicable. In other words the perception from people with business (or more precisely financial) background that it applies in all domains and all situations, specifically when applied to Manufacturing Systems solution. This means that everything that is in the past is money already spent and that we have to consider future state with no regard to what we currently have. Never mind the sweat and tears that where shed in putting a solution in, the extra hours, the training, etc. The current solution may not be perfect (but who or what is?) but it works, people are trained, they are using it, the company knows how to maintain it, in fact it adds value!  Yet, from a business perspective, which I equate to “the accounting or CFOs perspective”, we should disregard all of this; it is all water under the bridge. Just imaging the disruptions that will occur when the solution is gutted and a new one put in place, time, money, sweat, and tears – I just do not get it? We are slaves to this economic theory, investment planning only looks to the future and all that we have done in the past is irrelevant – I guess I will go out and get my memory erased - problem solved.

The Difference Between Accountants and Production Managers

This is an excerpt from a white paper that I authored a while back. I was helping a company with selecting an MES where ERP (SAP in this case, before SAP ME) was included in the mix as if it would be able to provide MES functionality with no constraints. It prompted me to write about the differences between MES and ERP.

ERP systems are designed to be very effective accounting systems. MES systems are designed to aid in shop floor management. It is naive and risky to assume that one of these systems can be extended to effectively do the other’s job. Similarly, one would not assign an accountant to be a production manager, or vice versa. Each might be an expert in his own field, yet it takes a completely different set of skills, expertise and knowledge to effectively tackle each task.  

Industry experience and best practices, as well as academic literature, strongly suggest integration of ERP and MES rather than the extension of either. The best approach is to implement a best-of-breed MES that is easily integrated into ERP. The benefits that can be gained are immense. They are in fact what will truly and finally allow organizations to realize some return on the large ERP investment.

I wrote this back in 2004 and the reason I came back to it now, since a customer that I am currently helping is doing it again. Well it seem that history repeats itself, and I can only say here we go again....