Jürgen Kletti (Ed.

)
Manufacturing Execution Systems – MES
Jürgen Kletti (Ed.)

Manufacturing
Execution Systems – MES
With 100 Figures

123
Editor

Dr.-Ing. Jürgen Kletti (Ed.)

MPDV Mikrolab GmbH
Römerring 1
74821 Mosbach
Germany
j.kletti@mpdv.de

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ISBN 978-3-540-49743-1 Springer Berlin Heidelberg New York

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Foreword

The transformation of the classic factory from a production facility into

a modern service center has resulted in management problems for which
many companies are not yet prepared. The economic efficiency of modern
value creation is not a property of the products but rather of the process.
What this means is that the decisive potentials of companies are to be found
not so much in their production capability but in their process capability.
For manufacturers the requirement for process capability, which has in
the meantime become the basis of the certification codes, gives rise in turn
to the requirement that all value-adding processes be geared to the process
result and thus to the customer. A necessary condition of process transpar-
ency is the ability to map the company's value stream in real time, without
the acquisition process involving major outlay – a capability which is be-
yond the dominant ERP systems.
Today modern manufacturing execution systems (MES) can offer real-
time applications. They generate current and even historical maps for pro-
duction equipment and can thus be used as a basis for optimization proc-
esses. As early as the beginning of the 1980s work started on methods of
this kind which were then known as production data acquisition or ma-
chine data collection. But while the main emphasis in the past was on
achieving improvements in machine utilization, today the concern is pre-
dominantly to obtain real-time mapping of the value stream (supply chain).
Here the increasing complexity of production calls for a holistic view of
production and services equipment and facilities: detailed planning, status
detection, quality, performance analysis, material tracking and so on have
to be registered and displayed in an integrated manner.
In the mid-1990s the concept of the manufacturing execution system
developed in the USA from out of these exigencies. A non-profit organiza-
tion with the name of MESA (Manufacturing Execution System Associa-
tion) started standardizing these applications and thereby raised three ap-
plication layers of a production facility into a principle. MESA defines the
level of production itself, the level of production management (in other
words, MES), and the level of corporate management.
Further works of standardization relating to this subject area are already in
the process of development. Accordingly, an ISA S95 has been approved,
VI Foreword

whereby NAMUR, an association of process manufacturers, has come up

with its own guideline for its own particular area of manufacturing.
Very recently too the Verein Deutscher Ingenieure (VDI) has picked up
this topic and is working on issuing a guideline tailored to the particular
concerns of European manufacturers.
The expectations placed upon a manufacturing execution system for in-
creasing performance are correspondingly high. The practitioner will have
a particular interest in topics such as TQM, SIX Sigma, operations plan-
ning or optimized material movements.
Even today the growing interest in this area is indicated by the increas-
ing use of the term “MES” in specialist literature and market surveys not to
mention in work on standardization in which a number of committees are
involved.
The term MES should be methodically systematized in order to give
manufacturers the broadest overview possible of the capabilities and the
different practical possibilities of an MES and thus put them in a position
of exploiting this overview to orient themselves within the broad supply of
goods to the market. In the present book, experienced specialists in the
field throw detailed light on different aspects of an MES without which it
is not possible to run a modern company profitably today.
Gaining control of the processes is more and more becoming a central
requirement for companies if they are to be able to produce profitably even
in a location such as Germany.

Professor Johann Löhn

President of the Steinbeis-Hochschule Berlin
Government commissioner for technology transfer
Baden-Württemberg
Table of contents

1 New ways for the effective factory...................................................... 1

1.1 Requirements for tomorrow’s manufacturing............................. 1
1.2 Production structures .................................................................. 4
1.2.1 Orientation towards metrics ........................................... 4
1.2.2 Control methods ............................................................. 5
1.2.3 Combinations of production structure
and control method......................................................... 7
1.2.4 Weaknesses in traditional PPS systems.......................... 7
1.2.5 Function levels ............................................................... 8
1.2.6 Types of production ....................................................... 10
1.3 Classic IT support in production ................................................ 11
1.4 Manufacturing Execution Systems (MES) ................................. 13
1.4.1 Emergence of the MES concept ..................................... 13
1.4.2 Current standards ........................................................... 17
1.4.3 The ideal MES................................................................ 23
1.4.4 Technical requirements .................................................. 27
1.5 Vertical and horizontal integration ............................................. 29
1.6 Use of an MES system in the company ...................................... 34
1.6.1 Organizational requirements .......................................... 34
1.6.2 Technical requirements .................................................. 34
1.6.3 Economic efficiency....................................................... 34
1.6.4 Support for CIP and current certifications ..................... 35
1.6.5 Definition and tracking of objectives ............................. 36
1.7 Practical examples of potential benefits ..................................... 37

2 MES for process capability ................................................................. 41

2.1 Economic efficiency as a process property................................. 41
2.1.1 The process-oriented approach
of ISO 9001/TS 16949 ................................................... 42
2.1.2 The process potential in figures ..................................... 43
2.2 The process capability of the organization ................................. 44
2.2.1 Identification of systematic errors.................................. 45
2.2.2 Systematic failure processing......................................... 46
2.2.3 Tracking corrective action.............................................. 47
VIII Table of contents

2.3 Process capability in collaboration.............................................. 48

2.3.1 Wasted work ................................................................... 48
2.3.2 Operational target agreements ........................................ 50
2.4 Process capability of information flows ...................................... 50
2.4.1 The company as a paper factory ..................................... 51
2.4.2 Interfaces without value generation ................................ 51
2.4.3 The way to paperless production .................................... 52
2.5 The process capability of flow control ........................................ 54
2.5.1 Deterministic control....................................................... 54
2.5.2 Control with feedback (closed-loop control) .................. 55
2.6 Summary ..................................................................................... 58
Literature ................................................................................................ 60

3 Added value from software.................................................................. 61

3.1 The company as information system ........................................... 61
3.1.1 Information as a production factor.................................. 61
3.1.2 Re-engineering and integration....................................... 62
3.1.3 Information processing in production ............................. 63
3.1.4 Machines as information-processing systems ................. 64
3.2 MES in the capital goods industry .............................................. 65
3.2.1 Characteristics of the capital goods industry .................. 65
3.2.2 MES in the IT software landscape .................................. 66
3.2.3 MES in the technology life cycle .................................... 67
3.2.4 MES as seen by the user ................................................. 69
3.2.5 MES as seen by the market ............................................. 70
3.3 Preparations for MES-implementation........................................ 71
3.3.1 Identification of objectives ............................................. 72
3.3.2 Systematic process development..................................... 72
3.3.3 Estimation of a return on investment .............................. 73
3.3.4 System tuning.................................................................. 74
3.3.5 Introduction of MES in the company.............................. 75
3.3.6 Operation of the MES solution ....................................... 76
3.4 Innovative technologies in the MES environment ...................... 76
3.4.1 The digitized factory ....................................................... 76
3.4.2 The digital factory........................................................... 77
3.4.3 The factory with real-time capability.............................. 78

4 MES: the new class of IT applications................................................ 81

4.1 Introduction and motivation ........................................................ 81
4.2 The current situation in the manufacturing company.................. 82
4.2.1 Tools and systems for the operative level ....................... 82
4.2.2 Manual information procurement and other tools........... 84
4.2.3 Problems in bringing together the data ........................... 86
4.3 The situation as it ought to be ..................................................... 86
4.3.1 Gapless automated data acquisition ................................ 87
4.3.2 The information point for production ............................. 88
 Table of contents IX

4.3.3 The concept of the “manufacturing cockpit” ................. 89

4.3.4 Escalation management and workflow........................... 95
4.4 Outlook and further development of MES systems.................... 97
Literature................................................................................................ 98

5 Building an MES system ..................................................................... 99

5.1 Software architecture of an MES system.................................... 100
5.1.1 Basic functions ............................................................... 101
5.1.2 Data layer ....................................................................... 103
5.1.3 Application layer: business objects and methods........... 104
5.1.4 Process mapping............................................................. 105
5.1.5 The advantages of ESA architecture
for MES systems ............................................................ 106
5.2 Interfaces of an MES system ...................................................... 107
5.2.1 Interfaces with higher-level systems .............................. 108
5.2.2 Interfaces for horizontal integration............................... 111
5.2.3 Interfaces with production facilities ............................... 111
5.3 User interfaces of an MES system.............................................. 114
5.3.1 Technologies for user interfaces .................................... 114
5.3.2 User interfaces for configuration, monitoring
and reporting .................................................................. 115
5.3.3 User interfaces for data collection.................................. 116
5.4 Outlook ....................................................................................... 117

6 Integrated production management with MES................................. 119

6.1 MES systems make production management possible ............... 119
6.2 The MES model.......................................................................... 119
6.3 Data analysis: information in an MES system............................ 121
6.4 Operating resources: machine or installation section ................. 122
6.4.1 Order/operation .............................................................. 123
6.4.2 Material .......................................................................... 123
6.4.3 Resources and production tools ..................................... 124
6.4.4 Process values ................................................................ 124
6.4.5 Personnel........................................................................ 125
6.4.6 Inspection and testing characteristic............................... 125
6.5 MES data acquisition functionality ............................................ 126
6.5.1 Data acquisition terminal equipment.............................. 127
6.5.2 Information for the worker............................................. 129
6.5.3 Modularity supports the diversity of data
acquisition dialogs.......................................................... 131
6.5.4 Plausibility in the data acquisition process..................... 132
6.5.5 Which interfaces with the process are best used? .......... 133
6.5.6 Data correction in the MES system................................ 134
6.5.7 Availability and reliability of the MES system .............. 134
X Table of contents

6.6 MES information for production management............................ 135

6.6.1 Transparency due to MES actuality ................................ 136
6.6.2 User-focused analyses..................................................... 137
6.6.3 Production-related target definition ................................ 138
Literature ................................................................................................ 139

7 Detailed planning and control with MES ........................................... 141

7.1 Overview and goals..................................................................... 141
7.1.1 Incorporation of detailed planning and control............... 141
7.1.2 Tasks of detailed planning and control ........................... 143
7.2 Use of MES for detailed planning and control............................ 144
7.2.1 Overview......................................................................... 144
7.2.2 Dealing with primary capacities in MES ........................ 146
7.2.3 Modeling the processes in the MES................................ 149
7.2.4 Personnel: the especially valuable resource.................... 152
7.2.5 Modeling technological aspects ...................................... 152
7.2.6 Strategies for resource allocation.................................... 154
7.2.7 Conflict resolution by simulation and optimization........ 156
7.2.8 Monitoring order execution ............................................ 160
7.2.9 Reactive planning with MES .......................................... 161
7.3 Management of the means of production (resources) ................. 162
7.3.1 Status management ......................................................... 164
7.3.2 Anonymous and individualized resources ...................... 165
7.4 Summary ..................................................................................... 166

8 Quality assurance with MES ............................................................... 169

8.1 Quality in practice ....................................................................... 169
8.2 Planned quality............................................................................ 170
8.2.1 Quality master data in an MES ....................................... 171
8.2.2 Proactive defect prevention with FMEA ........................ 172
8.2.3 Inspection and testing planning: the foundations
of product quality............................................................ 172
8.2.4 Inspection equipment: reducing measurement
uncertainties .................................................................... 175
8.2.5 Supplier rating: optimizing the procurement process ..... 176
8.2.6 Setting up workflows with escalation scenarios ............. 177
8.2.7 Quality planning within production preparation ............. 178
8.3 Integrated quality......................................................................... 180
8.3.1 Quality via information management.............................. 181
8.3.2 Securing supplier quality ................................................ 181
8.3.3 In-process quality assurance ........................................... 182
8.3.4 Optimization of inspection equipment monitoring ......... 183
8.3.5 Transparent complaints management.............................. 184
 Table of contents XI

8.4 Documented quality.................................................................... 185

8.4.1 Networking of information ............................................ 186
8.4.2 Using quality data appropriately .................................... 187
8.4.3 Traceability .................................................................... 190
8.5 Analyzed and evaluated quality.................................................. 192
8.5.1 Potential for improvement in production ....................... 193
8.5.2 Learning from complaints .............................................. 194
8.5.3 Six Sigma: putting a stop to waste ................................. 195
8.5.4 Quality information: added value in the MES................ 196

9 Personnel management with MES ..................................................... 199

9.1 Overview .................................................................................... 199
9.2 Staff work time logging.............................................................. 200
9.2.1 Tasks of staff work time logging.................................... 200
9.2.2 Time management in the MES or ERP system .............. 201
9.2.3 Flexibilizing work hours ................................................ 202
9.3 Motivation and personnel management...................................... 204
9.3.1 Performance- and bonus-based wages ........................... 204
9.3.2 Employee qualifications ................................................. 206
9.4 Short-term manpower planning .................................................. 206
9.4.1 Vacation and shift planning ........................................... 207
9.4.2 Checking labor capacities during detailed planning....... 208
9.4.3 Allocating employees to work centers ........................... 209
9.5 Security in the manufacturing company ..................................... 210
9.6 Outlook ....................................................................................... 211
Literature................................................................................................ 212

10 MES with SAP...................................................................................... 213

10.1 Motives ....................................................................................... 213
10.2 Integration of the MES into the SAP environment..................... 214
10.2.1 Development of the MES in SAP history ...................... 214
10.2.2 Requirements for an MES in the SAP
system environment........................................................ 215
10.2.3 Representation of levels in a manufacturing company... 216
10.2.4 Corporate processes in mySAP ERP
and the MES system....................................................... 217
10.3 MES as an integrated solution in the SAP system...................... 221
10.3.1 Importance of SAP NetWeaver for integration
of the MES ..................................................................... 222
10.3.2 Interfaces with mySAP ERP applications ...................... 225
10.3.3 Integration of MES functions via the SAP portal........... 228
10.4 Support for SAP’s Adaptive Manufacturing initiative ............... 230
10.4.1 Scalability of the MES solution ..................................... 230
10.4.2 MES for horizontal integration ...................................... 231
XII Table of contents

10.4.3 Interfacing on the machine and control levels ................ 232

10.4.4 Examples of the integration of MES and mySAP ERP .. 233
10.5 Summary ..................................................................................... 239

11 MES in plastics processing................................................................... 241

11.1 Special features of the plastics industry ...................................... 241
11.2 Usable MES modules .................................................................. 242
11.3 Control station ............................................................................. 244
11.4 Acquisition of machine and production data............................... 245
11.5 Connecting the injection-molding machines ............................... 246
11.6 Visualization and evaluation ....................................................... 247
11.7 Connection between quality assurance and process data ............ 249
11.8 Tool making ................................................................................ 250
11.8.1 Using an MES system to monitor
the maintenance intervals................................................ 250
11.8.2 PDA and control station in tool making.......................... 251
11.9 DNC, batch tracking and mandatory
in-process documentation............................................................ 252
11.10 Management Information System (MIS)..................................... 253
11.11 Return on investment................................................................... 254
11.12 Summary ..................................................................................... 256

Abbreviations................................................................................................. 257

Checklist ......................................................................................................... 259

Preliminary note for the user .................................................................. 259
General criteria ....................................................................................... 260
System concept ....................................................................................... 260
Production............................................................................................... 260
Quality .................................................................................................... 261
Personnel ................................................................................................ 261
Data acquisition ...................................................................................... 262
MES in the SAP environment ................................................................ 262
Updating ................................................................................................. 263

The authors .................................................................................................... 265

Index ............................................................................................................... 271

1 New ways for the effective factory

1.1 Requirements for tomorrow’s manufacturing

The classic factory has been defined by its manufacturing of goods. The
goods and their value have been measured primarily by their material
components. This is no longer adequate today. Increasing globalization is
necessarily leading towards more anonymous products out of long supply
chains and with an increasing complexity to track their origins. This im-
plies a shifted focus from control of production creation (vertical integra-
tion) to control of product perception by the customer (OEM). Customers
today take it for granted that products will be of first-class quality. Anyone
wishing to stand out from the competition in the future needs a strategy
which offers the customer an additional added value, such as, for example,
high flexibility, short delivery times, high delivery reliability, wide range
of variants, shorter product life cycles – properties which are not created
by production but by the processes. The term “adaptive manufacturing”,
which is heard more and more often these days, describes this approach as
“connecting the machines to the markets.”
For this reason many classic manufacturers today already define their
production facilities as a service center, thereby signaling to the customer
that they understand the processing of material into a finished product as
also being a service for the customer. This increase in closeness to the cus-
tomer initially results in cost increases. Modern producers attempt to cancel
out these increased costs by rethinking their vertical integration, in some
cases by using standard components or by sourcing suitable components on
the global market. The modern producer is thus faced with forces which
can be referred to as networking, dynamization and individualization .
The term “networking” means the increasing inter-company coopera-
tion. In today’s public discussion is principle is named globalization.
Thanks to this networking the manufacturer can purchase on the market
the components he needs thus leaving him able to concentrate on his core
competences which he then, in a supply chain management strategy, in-
corporates effectively into the total product manufacturing chain.
Dynamization originates in strong market fluctuations which, driven
by more information and ever more rapidly disseminated information,
2 1 New ways for the effective factory

encourage customers to make rapid changes in their purchasing habits. The

ever faster turning wheel of technological development makes a further
contribution to these effects. Errors are more likely in complex, collabora-
tive processes than in simple, closely coupled processes. The failure man-
agement resulting from this and also the frequent and faster changes in
customer orders further stimulate the dynamics.
The change towards buyer’s markets and greater focusing on the cus-
tomer demands more individualization from manufacturers. What the cus-
tomer wants is a product which is tailored to his requirements. The logical
consequence is an increase in the range of variants which the producing
company must offer to its customer.
Networking, dynamization and individualization create increased risks
and complexities in the production facilities and demand that producers be
capable of change. This turbulence is characterized by new requirements in
the internal processing of orders and also in external market dynamics.
These changed requirements are characterized by stronger external net-
working, by collaboration with multiple and/or with new partners, and by
faster internal structural and technical adaptations. This new process insta-
bility makes manufacturing close to an economic optimum more difficult
and also fosters not only inefficient information management but also out-
dated business processes. The consequence for the customer is poor deliv-
ery reliability and lead times as well as unsatisfactory product quality. In
many cases the manufacturer experiences long delivery times which in
turn result in excessive inventory levels. The consequence is that more
capital is tied up.
The list of effects generated by turbulence and changeability can be con-
tinued. These effects impact on every level in a manufacturing company,
often in different ways with different effects. The consequences of these
effects can be resisted by creating more transparency within the levels and
between the levels, by improving reaction capabilities, and by securing
cost-efficiency.
To increase transparency, there must be greater integration of the busi-
ness processes affected. Impediments and obstructions which still exist
today in communications between the corporate levels of management,
production management and also the production department itself must be
dismantled and removed. Information will need to flow faster and more
effectively within the levels. The vertical integration or continuity from
management to production so often required today should be supplemented
by horizontal integration. Improved reaction capability will develop on this
basis of increased transparency. Faster information means that problems
and unplanned events will be detected faster. This makes faster reaction
possible and remedial action can be taken faster. With these resources,
 1.1 Requirements for tomorrow’s manufacturing 3

production planning can be set up which is characterized by short reaction

times and which thus earns its description as a fine planning control sys-
tem with short control cycles.
With this set of tools, deliveries or services can be modified at short no-
tice in an economic and cost-oriented manner thereby complying with
customer for flexibility. But the efficient introduction of changes, a satis-
factory level of adaptability to the changing needs of the company, and the
ability of existing technologies and systems to be readily integrated also
have to be developed and refined in a manufacturing company.
The potential benefits which emerge from these elements – such as bet-
ter customer service due to improved delivery reliability and delivery ca-
pability, as also product quality and information capabilities, cost savings
due to inventory reductions, improved workforce position, motivation aris-
ing from control of production, and so on – supply decisively important
key performance indicators for the current competitive environment.
These three elements in an improvement process – transparency, re-
sponsiveness and cost efficiency – have been partially put into practice in
industry in recent years. Some advances have been made here, particularly
on the level of corporate management. In the commercial departments of
corporate management, changes do not come into effect in seconds, min-
utes or hours but rather in days, weeks or months. The situation is com-
pletely different in the field of production management and automation.
Many short-term activities are required here and they in turn call for tools
that support online ad hoc decisions. Every minute of downtime for a ma-
chine or part of a plant costs money. Every minute of these production
problems eats into profits. In cases of this kind it is very easy to demon-
strate a clear relationship between the benefits and the costs of measures
and tools for preventing or reducing breakdowns.
Today, particularly in production management, the aim of “increasing
transparency, responsiveness and cost efficiency” means that new paths
must be taken and increased effort applied to measures which have already
been introduced. One tool which supports these objectives is the so-called
MES system (manufacturing execution system). MES is a method that has
developed from what tend to be the classic disciplines, such as production
data acquisition, staff work time logging, quality assurance and finite
scheduling. The homogenized and compacted version of these techniques
can be grouped under the heading MES. The aim of an MES is to make the
value-adding processes transparent and on the basis of this transparency to
create not only horizontal but also vertical control cycles. The cycle time of
these control cycles will depend on the tasks being performed and, to take
the example of production, be measured not in days or shifts as is normal in
a traditional ERP environment but rather in multiples of minutes. In this
4 1 New ways for the effective factory

way production can react quickly and cost-effectively to meet new re-
quirements.
The present book is intended to throw light on various aspects of MES
and the use of MES and should also describe how potentials for improve-
ment can be identified and exploited, even in a heavily automated industry.

1.2 Production structures

The aim of achieving an improvement in economic efficiency is not, of

course, a new demand but is rather a permanent process which has increas-
ingly challenged manufacturing industry over the last few decades. In the
media we only hear about particularly major pushes made in this direction
(such as the case of Ignazio Lopez or jobs being exported from Germany).
Alongside the improvement in processing technology and the reduction in
material and labor costs, this striving for greater efficiency has initially
been met by an improvement in production structures and control methods
with the aim of improving the passage of an order through production. For
this reason new approaches have been developed in recent years which
satisfy demands for shorter lead times and greater flexibility, particularly
with regard to the increasing number of product variants. Some of these
production structures and control methods will be dealt with briefly below.

1.2.1 Orientation towards metrics

Different factors must be taken into account in the selection of suitable

production structures. One important criterion is the production quantity
planned. Due to the high degree of automation, the line structure delivers
the highest productivity but recouping the high investment costs necessi-
tates producing large quantities over long periods. Other important criteria
are flexibility with respect to product change, production of variants, vol-
ume changes, work in progress inventory, working conditions, and so on.
Here it is necessary to identify the maximum benefits by making an
evaluation of the various structures with regard to these criteria.

Shop production
In shop production all machines which carry out the same tasks are
grouped together into shops – for example, all lathes and turning machines
in the turning shop, all milling machines in the milling shop (layout by
machine). In this case the time flow of production is tied to batches. Not
until the last workpiece in a batch has been processed are all members of
 1.2 Production structures 5

the batch sent on to the next operation. The result of this in a multi-step
process is an unclear flow of material with long transportation paths, queu-
ing and waiting times, large work in progress inventories and poor compli-
ance with scheduled times. Shop production originated in the pursuit of
high flexibility and simplified layout planning.

Production in decentralized structures

Product- or customer-oriented organizational units are grouped into decen-
tralized structures which include several production stages (the factory in
the factory). The objective is to combine the cost and productivity benefits
of line or continuous production with the high flexibility of shop produc-
tion. The assumption underlying the decentralized structures approach is
that it is easier to coordinate small units since all of the units needed to
carry out the task are grouped together in one area. Decentralized struc-
tures can thus be intensively aligned to specific competitive strategies.

Line flow production

Here machines and operations are organized in accordance with the order in
which a product is processed (layout by product). Due to the fine time coor-
dination and interlinking required for the individual operations (cycle timing)
this structure is very sensitive to breakdowns as well as inflexible product
variations. In addition, installations of this kind have high investment costs
which is why they can be used economically only in large-scale production.
Here line flow production does, however, offer the greatest productivity ad-
vantages over other production structures since queuing and waiting times,
work in progress inventories as well as transportation paths are minimized.

1.2.2 Control methods

The selection of suitable control methods depends to a considerable extent
on the production structure (for example, shop production or flow produc-
tion). However, the type of orders to be processed (for example, customer
or stock order, quantities, number of variants, spread of the orders, and so
on) also plays an important role. In principle a distinction can be drawn
here between the push principle and the pull principle.

Push principle
The push principle means that production orders are generated in a central
production planning and control facility and are then executed in the pro-
duction department. Examples of push methods of this kind are:
6 1 New ways for the effective factory

 MRP II (manufacturing requirement planning)

The MRP II method developed out of MRP I (material requirements
planning) by the incorporation of manpower and machine capacities in
calculations. It is used primarily in normal and small series production
on the shop principle since multistage production structures require an
increased level of planning.
 Cumulative number concept
With the cumulative number concept, material movements are recorded
cumulatively over time (actual CN) with the aid of a cumulative number
(CN) and compared with the planned value (target CN). Use of the cu-
mulative number concept requires large production quantities and a lin-
ear production structure. For this reason this method is primarily suit-
able in full-scale and mass production with line or flow production.
 Load-dependent order release
Load-dependent order release was developed in particular for one-off
and quantity production on the shop principle of products which have
a large number of variants. It regards machines as hoppers whose fill
levels (number of orders) are controlled.

Pull principle
With the pull principle, items are only produced in response to a customer
demand for them. The customer order generates a requirement in the final
assembly department. This requirement in turn generates a requirement in
pre-assembly, and so on – in other words, the sales order works its way
backwards through production until it reaches material procurement. The
aim of the pull principle is to reduce the control overhead and to make
production more transparent and less inventory-hungry. Examples of pull
methods of this kind are:
 Kanban
The kanban method is based on autonomous control cycles between
a consuming station and a producing station. Here the producing station
receives a signal which tells it what parts are needed in what quantity at
what time by the consuming station. The signal is given by means of
kanban cards. Kanban is used predominantly in mass production on
a flow production basis.
 CONWIP (constant work-in-process) is based on the kanban system but
still includes the control cycles of several stations found in flow pro-
duction.
 Synchronous production
In synchronous production the ideal production line produces with the
same work cycles as the customer or in accordance with customer call-
 1.2 Production structures 7

offs. Chaining the work steps means that it is only necessary to control
a single process step in the entire process chain. The pacemaker process
is the process which is directly controlled by the customer. The aim of
this method is to achieve a continuous flow (one-piece flow).
 Agent control
Higher level IT systems determine star dates on the basis of the cus-
tomer dates. On the basis of this information, work pieces, installations
and transportation systems negotiate the process flow decentrally and
autonomously while taking the current state of production into account
at all times.

1.2.3 Combinations of production structure

and control method

As has already been said, not every control method is suitable for every pro-
duction structure. In practice the following combinations are encountered:

Fig. 1.1. Control methods in relation to the production structure (Fraunhofer IITB,
2005)

1.2.4 Weaknesses in traditional PPS systems

Despite some sophisticated control methods, traditional production plan-

ning and control has serious weak points in the planning and scheduling of
production orders. This is why we can see a trend towards pull approaches.
These weak points include:
8 1 New ways for the effective factory

 Planning with uncertain planning input data (processing times, machine

utilization, etc.)
 Planning split too coarse due to planning by the week or at best by the
day
 Planning without an updated load horizon
 Missing or excessively late feedback about progress towards comple-
tion, faults and so on; this means only delayed control is possible
 Inflexible as regards rush orders or changes in requirements or dates
 Does not take actual capacity utilization into consideration
In the PPS strategies a tendency towards planning can be seen – in other
words, towards a one way street principle without feedback. Transparency
and responsiveness are thus not achieved. In principle an improvement
process involving better planning must end at a specific point. Without
real-time confirmation of completion, the control cycle consisting of the
production plan and production itself will in the best case be run through
once a day since inputs first need to be checked, corrected and incorpo-
rated into the new plan.

1.2.5 Function levels

The production structures and control methods considered in the previous

section are coordinated and organized by the higher levels in a manufactur-
ing company. For a closer examination it would be advisable to subdivide
a company of this kind into its different levels.

Corporate management
The level of corporate management will, of course, be concerned primarily
with commercial duties. From sales and design activities emerges product
range planning and the associated quantity planning. Once quantity plan-
ning has been completed on a customer-, order- or stock-oriented basis, the
order release will be given. As a result of this, or even dependent on it, the
time scheduling and capacity requirements planning must start for produc-
tion. In virtually all cases this planning step will be rough planning – in
other words, using a rough grid commensurate with the processing time
period, the capacities available are examined and also the units to be
manufactured on these capacities. On the basis of the information flowing
back from production the inputs for the next production period or for the
next planning section can be changed if necessary.
 1.2 Production structures 9

Production management
Production management receives the order loading and the corresponding
dates from corporate management and carries out sequencing and loading
planning. This planning step should be referred to as “finite planning”.
Here the orders or operations are scheduled out to the available capacities
with the most exact start dates possible being determined and passed on to
the actual production department. This production management level also
includes collection of the production data with whose help a real-time tar-
get/actual comparison can be carried out between input requirements and
the real information.
All types of resource management are normally carried out on this level.
The preparation of personnel deployment plans is a special task which is
usually performed by production management. Even quality assurance with
its wide range of functions regarding data acquisition and evaluation is
normally a task which falls under production management.

The production level (automation level)

Machine and system control and also stock control are now assigned to the
actual production department. In the same way, transportation control,
maintenance and the actual manufacture of goods are tasks for the produc-
tion level. Further on in this book this level will also be frequently referred
to as the automation level.
Within the context of the present book, examination of production man-
agement plays a central role. This is where flows of material and of infor-
mation intersect decisively in a manufacturing company. Production man-
agement also makes a substantial contribution to value creation. At this
point unsuitable mechanisms may mean that not only no money is earned
but also burned.
Production management determines the logistical performance of a com-
pany, particularly regarding its responsiveness to market influences. More
recent control methods tend to be decentralized and responsibility dele-
gated to lower hierarchy. In this way production management gains more
and more responsibility and importance. Inter-company networking in the
supply chain management environment takes place today more and more
often on the level of actual production or of production management.
Within this book this particular arrangement of levels is intended to serve
as a model for all types of production departments.
10 1 New ways for the effective factory

1.2.6 Types of production

Three different so-called production types are to be distinguished. These

are: discrete or shop production, process-line production or mass produc-
tion, and the make-to-order manufacturer or plant and equipment manufac-
turer. The distinction is important at this point as further on in the book.
We intend to show how these types of production require MES functional-
ity. A brief summary of the basic characteristics of the three types follows.

Discrete or shop production

Here we have production orders from a series of operations which in some
cases can be regrouped into assemblies. The discrete manufacturer would
prefer transitions between his processing steps to be as short and smooth as
possible. The availability of intermediate products is an important variable,
as is organizing these intermediate products in interim storage facilities.
Specific variables here are resource availability and above all flexibility in
the processing of orders.

Process lines or mass production

The mass, process or line manufacturer links together his systems and ma-
chines to form lines which normally produce large quantities of a product.
Flexible changes in order processing are only possible with qualifications.
The fact that a line runs permanently is of central importance. Due to the
complexity of installations, shifting orders to different resources is often
impossible or if so, only to a limited extent. This means that a special logic
will also have to be taken into account in production planning.

Make-to-order production/plant and equipment manufacturing

The make-to-order manufacturer or plant and equipment manufacturing
typically has comprehensive bills of material which are often processed in
manufacturing cells or in dedicated shops. These manufacturing cells have
a certain amount of independence which means that sometimes there can
be transitions between them which are not time-critical. Depending on the
products being manufactured this kind of manufacturer may also have full-
scale or small-series production facilities.
The relative closeness of deadlines shown in the diagram is intended to
provide a qualitative representation of the different time horizons within
which the three levels carry out their tasks. The range extends from long-
term in ERP production range planning to virtually real-time or online on
the automation level.
 1.3 Classic IT support in production 11

Fig. 1.2. The three principle types of production in manufacturing industry. Each
of these types has an ERP, an MES and an automation level.

1.3 Classic IT support in production

In the early years of information technology, manufacturing enterprises

were mainly “controlled” by commercially oriented systems. It was a gi-
gantic step forward to automate classic manually oriented commercial
services and to manage bookkeeping, inventory and orders received elec-
tronically. In the next stage of this process of automation it was possible to
provide some of the above-mentioned production structures and control
methods with support from so-called EDP systems. The milestones here
were detailed planning of orders, resolution of orders into individual op-
erations or sequences of operations, and the breaking down of products
into individual assemblies. Supervisors in production were supplied with
lists which contained sales planning information and the customer orders
to be produced. Consumption of time, materials and other resources were
reported back to the EDP system from production and this information
recorded there – a complex method which was also likely to be encum-
bered with errors. Simpler and better was to send a status report once indi-
vidual departments started to be equipped with dedicated data collection
systems. In this way the EDP side was provided with a production data
acquisition facility, the personnel department with staff work-time logging
and the quality assurance department with a so-called CAQ system. It was
12 1 New ways for the effective factory

possible to achieve considerable reductions in the cost of data acquisition

and the different expenditures on this could be assigned to individual
products or production orders more accurately than previously as regarding
their origins.
These mechanisms, however, only covered the tasks to be performed by
corporate management. Production management itself continued to be
supplied as before with the corresponding lists, order-accompanying
documents, material-accompanying documents, and so on. Although status
reports no longer had to be manually recorded, checked for plausibility and
corrected, they were however only available in a limited scope for produc-
tion personnel.
As has already been described in our first section, there have been dras-
tic changes in recent decades in the requirements made of the production
department. Process instability and the compulsion towards fast change
have an effect on the manufacturer to position his production close to an
economic optimum. They demand that he has a powerful information
management capability. If the manufacturer cannot provide these capabili-
ties fast enough, the result will be inefficient business processes which in
turn lead to poor on-time delivery performance, poor delivery times, unsat-
isfactory product quality, long lead times and excessively high inventory
levels. In this regard, ERP/PPS systems have retained a high proportion of
their old characteristics even until today. They do not, for example, sup-
port hierarchization and separation into levels as would be required in
a production facility. The focus of all instances of optimization relates to
planning – in other words, the “one-way street principle” and neglects
control capability. Even now, the control cycles of an ERP system are
longer than a shift while the production scheduler on the spot actually
needs control cycles of the order of several minutes. Control cycles this
fast are not to be found in an ERP-supported manufacturing organization.
For this reason open control chains are predominant. The information
flowing back from production is in some cases not available in a processed
form until the next shift which means that it cannot be used as online in-
formation by the persons in charge in production.
Certain aspects of this problem area are defused into APS functionalities
(Advanced Planning and Scheduling). Here the control cycles do not even
last a week but can be reduced to one or two days. However even with
APS we still are faced with the problem that control mechanisms within
a shift or a day are only possible to a very limited extent and that the focus
still remains on load planning and less on the control of production.
What we can compare with the APS functions are industry specific con-
trol stations. Here planning can be carried out not only almost in real time
but also oriented to a certain extent to the technology. A typical control
 1.4 Manufacturing Execution Systems (MES) 13

station takes into account aspects relating to the particular branch of indus-
try such as, for example, the color sequence in injection molding or the
suitability of tools and machine combinations for producing specific arti-
cles. But this control station approach still can only deliver a limited
amount of improvement. If the current actual situation is not included in
the corresponding new planning, we do not have a control facility here but
rather a planning facility, as previously. If ERP-based planning is referred
to as rough planning, the use of APS or control-station–oriented planning
means that so-called detailed planning can be achieved.
More detailed and dedicated functionalities, such as online display of
current states, display of utilization ratios, online interpretation of regis-
tered and unsatisfactory qualities, and also the display of incorrect states
are missing in control station. Evaluations which tell you tomorrow what
you could have done better today are only of interest in a statistical respec-
tively historical view.
At this point even the term “transparency” takes on a new meaning.
Transparency in modern production no longer only means the ability to
comprehend past history without omission or gaps and from this to derive
recommendations for future actions. Today, transparency also means visu-
alizing realities in real time, drawing conclusions from this, and then
communicating recommendations to the appropriate persons in order to put
an immediate end to incorrect states.

1.4 Manufacturing Execution Systems (MES)

1.4.1 Emergence of the MES concept

The origins of the MES concept are to be found in the data collection sys-
tems of the early 1980s. The various disciplines in corporate management
such as production planning, personnel, and quality assurance were fur-
nished with dedicated data collection systems. This situation is shown in
the following diagram: task areas which are almost mutually independent
are equipped with special data collection systems.
With the rise of the CIM concept (Computer Integrated Manufacturing)
a start was made on reproducing the interdependencies of these task areas
in the IT systems as well. Production, personnel and quality were no
longer seen as completely independent but rather data crossovers were
permitted from one task to another. Unfortunately this approach, correct as
it was in principle, did not emerge as a real and strong IT discipline. Trivi-
alization of the problem definition and a misuse of the term by smaller
system vendors in the sense that with time every data collection terminal
14 1 New ways for the effective factory

Fig. 1.3. Each area of activity in corporate management has a particular data col-
lection method assigned to it which is also independent of the others

was labeled a CIM system. In this way CIM had spoiled its standardization
potential as a problem-solving IT discipline for production.
In the early and mid-1990s the manufacturers of data collection systems
commenced upgrading their in some cases specialized systems (labor time,
PDA, CAQ, DNC, and so on) by adding features from associated fields
(for example: staff work time logging with PDA, PDA together with
MDE). With a small number of combination systems of this kind it was
already possible to put together a data collection (and sometimes a data
evaluation) system for many functional areas of a manufacturing company.
The system components were, however, independent of each other and
synchronizing them required major work on interfacing. Over the course of
time three groups of data collection/evaluation systems formed. From the
independent data collection systems, combination systems emerged, some
of which performed several tasks. All in all, the functionality of these
combination systems describes the functional scope of MES today:
 For production matters: PDA, MDE, DNC, control station;
 For personnel matters: staff work time logging, access control, short-
term manpower planning;
 For quality assurance matters: CAQ, measured data acquisition.
In the real world of production these three task areas cannot be sepa-
rated from each other. Production accordingly needs suitable personnel to
 1.4 Manufacturing Execution Systems (MES) 15

Fig. 1.4. MES integrates originally separate data collection systems

Fig. 1.5. Mutually independent data collection systems were networked and in
some cases connected to corporate management and automation via uniform inter-
faces
16 1 New ways for the effective factory

be able to produce and must know as fast as possible about the level of
quality it is producing. If mutually independent systems exchange their
data via interfaces or if data exchange actually takes place via systems on
the corporate level, too much of the time is lost which really ought to be
available to allow an effective reaction. Therefore the demand arose that
systems must be more connected or even horizontally integrated. To point
out straight: only a few systems available on today’s market support this
kind of deep horizontal integration.
Networked data acquisition and evaluation systems make it possible to
homogenize data exchange with the ERP system or with the automation
level. Here data is received from or sent to external systems via standard-
ized interface mechanisms. Provided these basic conditions of networking
and of unified interface technology are satisfied, data collection systems
are already coming close to the MES concept. Systems of this kind thus
support manufacturing operations by complying with the so-called 6 R’s
rule which states:

A product will not be created in the most economically efficient

manner unless the right resources are available in the right quantity
at the right place at the right time with the right quality and with the
right costs throughout the entire business process.

If the networked data collection systems are supplemented with elements

of quality assurance, document management document preparation and
also performance analysis, the whole can already be regarded as a powerful
MES system. It is now possible to evaluate unexpectedly arising production
problems to be evaluated in real time and with the appropriate counter
measures. As long as this condition is not satisfied cannot have a well-
grounded production control system on the basis of an online image of pro-
duction. Figure 1.6 shows technology- and situation-dependent decision-
making requirements as a function of processing time. The more closely
the delivery date for an order approaches, the higher will be the require-
ment to make “corrector” decisions faster and as a function of available
resources. This is therefore less a planning task but rather one of short-term
control, and this shifts the responsibility from the ERP to the MES level.
Accordingly, at the beginning of processing, the ERP system plans an order
load on the basis of an average capacity. The extent to which planning deci-
sions are dependent on situations or technology is relatively low. The closer
the delivery dates of an order load approach, the more it will become neces-
sary to make adaptations in response to unforeseen problems. The closer
the delivery date approaches the more this control function will be depend-
ent on technology, situation and remaining capacities.
 1.4 Manufacturing Execution Systems (MES) 17

Fig. 1.6. Dependence of control requirements on planning time

1.4.2 Current standards

The subject of MES has been taken up by a number of institutions which

are attempting, to protect the term MES against trivialization. Various
implementations types may be found and in the present context only the
two most important ones here. MES for the process industry and MES for
discrete industry. In the first case, machine and plant control systems will
form a very great part of MES. In the second case, MES is more an online
information system, a feedback and control system for production. Of the
attempts to achieve standardization which we have mentioned, only a few
need to be discussed here:

MESA
MESA (Manufacturing Execution Solutions Association) already has the
concept as part of its name and as the first organization to adopt this con-
cept is probably the most experienced to report on it. MESA’s approach
here is a very pragmatic one and describes twelve function groups which
are required for an effective support of production management. These
function groups are: