Can IoT eliminate the need for ERP and MES in manufacturing?

How a simple understanding of how systems work can pave the way to IoT and manufacturing success.

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The Internet of Things is a major driver of Manufacturing 4.0—also known as the Fourth Industrial Revolution—a digitalization initiative that began in Germany in 2015 and has propelled thousands of sensor, robotics and automation projects in manufacturing and warehousing. The ability to obtain real-time information about an imminent failure of a machine on a production line or to use a robot instead of a human to cut metal, plastic, wood or granite to size, has enthused manufacturers so much that some are beginning to wonder whether they can get rid of what they perceive as old and clunky enterprise resource planning and manufacturing execution systems.

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Unlike ERP and MES, IoT that is hooked into every manufacturing and warehouse operation can report on real-time events. It can issue alerts and affect machine-to-machine communications to facilitate production line automation. So, if IoT can do all of these things and in real time, why use older legacy systems that can't?

The ERP, MES and IoT combination

The feeling that IoT could supplant traditional systems like MES and ERP began with users on shop floors who got excited about all of the real-time automation and reporting IoT systems could do. It was natural to wonder if IoT could do even more.

IoT can and will do more in the future that it does today, but that doesn't mean that it can supplant ERP or MES because these systems were built to do different things that IoT can't do well.

Often referred to as the "drive chain" of enterprises, an ERP system is all-encompassing. ERP has software modules that support manufacturing, engineering, planning, purchasing, accounting, service, HR, etc. ERP's value rests in its ability to integrate enterprise information processing across all departments. The security in ERP systems is extremely robust. ERP's reporting and analytics capabilities are well developed. Most ERP systems also have middleware that assists ERP in integrating with IoT.

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MES is also a series of software modules that are closely linked with each other—only MES focuses exclusively on manufacturing and shop-floor operations. Like ERP, MES systems have robust security and extensive reporting capability. They can also communicate with IoT devices. 

The advantages that IoT has over ERP and MES are its ability to communicate with edge sensors and services, capture and process unstructured data, trigger events in real time and communicate between different devices and networks on the manufacturing floor. 

The advantages that ERP and MES have over IoT are much sounder security, large data repositories that can handle a variety of queries and analytics, and the ability to interface with myriad business processes across the company (e.g., manufacturing, planning, finance, service marketing, HR and more).

At the end of the day, IoT is a more specialized technology that can automate business processes that use robotics and other IoT end devices, and it can deliver results in real time—but ERP and MES are still the mainstay systems of organizations, with IoT being a critical real-time data "feeder" network into these larger systems. 

Why system explanations matter

Explaining how different systems work together and why they are all necessary is an important talking point for IT leaders as more organizations adopt IoT because if the different roles of IoT and other systems aren't clearly explained, there is a risk that people could expect more out of IoT than it can deliver.

If IT can give executive management and business users a better understanding of overall IT architecture and its different system components—including IoT—these plain-English explanations will go a long way in furthering general understanding of systems and paving the way for IoT project success.

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