Benefits of Integrating Supply Chain Planning and Manufacturing Execution Systems (MES)

Supply Chain Planning and MES integration improves efficiency and reduces uncertainty.

Accurate, timely data drives efficient planning, but many manufacturers find themselves limited by traditional practices.

For decades, planning teams used data from ERP systems that was designed for financial analysis.

Yet, as the business landscape evolves at an unprecedented pace, it has become imperative for leaders to question the efficacy of these longstanding practices.

Outdated Practices

Why are so many manufacturers reliant on outdated methodologies like standard costing, run rates and material usage that use accruals to account for variances in financial results?

This practice undermines the accuracy of financial analysis, while hindering the supply chain’s ability to swiftly respond to market fluctuations and disruptions.

These antiquated practices lack accuracy and fail to provide the real-time visibility required to make informed decisions.

In an era where agility and adaptability are paramount, clinging to conventional approaches may prove detrimental to a company's competitive edge. It’s time to break free from legacy systems that hamper progress and take a leap forward.

Disconnects Between MES and Executive Decision-Makers

The disconnect between Manufacturing Execution Systems (MES) and executive-level decision-makers further compounds these challenges. Despite the wealth of data generated by MES, the failure to integrate and analyze this information into strategic decision-making processes creates inefficiencies and missed opportunities across the supply chain.

These conventional practices have given rise to various common challenges that cost money and impact customer fill rates due to poor schedule adherence, unexpected changeovers and production delays, driven from:

Limited visibility into Raw Material issues. Often, companies struggle to track the availability of raw materials in real-time, leading to delays and disruptions in production schedules. This lack of visibility impacts operational efficiency and increases the risk of missed delivery deadlines and customer dissatisfaction. For example, a raw material issue, such as receiving the wrong material or experiencing quality issues, can halt production lines and impact overall productivity. Furthermore, raw materials are sometimes stored or managed outside of the shop floor, complicating inventory management processes, especially when raw materials are in-transit or stored at supplier locations. This decentralized approach to raw material handling can result in inefficiencies, as operations teams may struggle to access critical materials when needed.

Limited connectivity between planning and operations teams. In many organizations, these two functions operate in silos, leading to misalignment and communication gaps. When there is a connection, it’s often a one-way street with supply chain pulling data from MES when it should be a bi-directional flow of information. When delays occur in execution, there is no option to quickly reassess the situation and respond via connected data, decision-making, and operations. Additionally, nuances in efficiencies and capacity are not accurately represented in strategic decision-making.

Unfeasible master production schedules. Production plans may not accurately reflect operational realities, leading to unfeasible master production schedules. Using standards from ERP for production run-rates and material consumption can cause significant variances between the labor, machine hours and materials planned and what is needed on the shop floor. Unplanned downtimes due to changeovers, raw material shortages, and production line disruptions represent another critical challenge for manufacturers. These downtime events can occur unexpectedly, causing delays and interruptions to schedules that lead to unsatisfied customers.

Inefficiencies due to limited visibility into existing capacity. While MES provides production rate data, there's often no direct feedback to planning systems, leading to inaccurate capacity assessments and manufacturers struggling to optimize production schedules. Relying solely on ERP for capacity information is insufficient, as these systems may not capture all relevant data, resulting in discrepancies between planned and actual capacity. An effective integration of MES and planning with real-time exchange of data is crucial for accurate capacity assessments and agile decision-making.

The Digital Thread

The integrated connection between John Galt Solutions’ Atlas Planning Platform and GE Vernova’s Proficy Smart Factory MES establishes a powerful digital thread that spans customer value chains. This digital thread can represent a real-time integration that can both connect disparate data sources and enable advanced analytics and machine learning algorithms to help derive actionable insights. The power of this bi-directional connectivity can enable companies to transcend the limitations of traditional accounting-centric approaches and drive better outcomes, primarily:

• Enhanced visibility, efficiency and schedule attainment​. The GE Vernova/John Galt digital thread delivers better visibility into various aspects of both the extended supply chain such as in raw material procurement and the manufacturing floor. With real-time data, teams across the business can make better informed decisions, for example, regarding RM sourcing and allocation, helping to ensure that the correct amount of raw materials is available when needed and at what node of the supply chain. This improved visibility can translate into greater efficiency and an improved ability to satisfy orders as promised, thereby enhancing customer satisfaction levels.

• Improved schedule adherence by accurately reflecting production realities. Seamless communication between planning and MES can mean companies have more closely aligned production schedules that can reflect operational capabilities. Now, it can become possible to attain new levels of production while minimizing disruptions. The enhanced schedule adherence can drive increased production yields and cost efficiencies, while supporting the potential to considerably boost service levels.

Less Uncertainty and Volatility

A significant challenge for many companies is the inherent uncertainty and volatility in their production environments. Now, leveraging the insights derived from this digital thread, companies can better anticipate and manage disruptions. For example, by analyzing historical data on plan changes and disruptions, companies can proactively adjust their plans to accommodate unforeseen events – minimizing the impact of disruptions while enhancing resilience.

The digital thread can enable companies to optimize their planning processes by identifying areas for improvement. Understanding the frequency and magnitude of plan changes helps develop more flexible plans that can withstand disruptions. It’s a significant step forward to planning that equips teams with the ability to more effectively navigate the complexities of modern supply chains and maintain a competitive edge.

Rethink Planning with a Holistic Approach

The integration of the Atlas Planning Platform and GE Vernova’s Proficy Smart Factory MES can empower companies to harness the full potential of their supply chains with real-time visibility, advanced analytics, and powerful insights that drive better decisions. As businesses continue to evolve and adapt to changing market dynamics, the digital thread can serve as a cornerstone for innovation and profitable growth.

Rethink planning processes and stop relying on outdated standard data from ERP systems which is no longer viable in today's fast-paced and dynamic business environment.

Instead, companies must pivot toward leveraging accurate, timely, and relevant data. Schedule a demo to explore how you can create a cohesive digital thread that connects disparate data sources and operations for better decision-making across the entire ecosystem, enabling your team to effectively anticipate and adapt to disruptions.

The power of MES and supply chain planning integration can accelerate value across the organization and decrease decision latency. Learn more about GE Vernova’s Proficy Smart Factory MES and John Galt Solutions’ Atlas Planning Platform.