Contributions of MES (Manufacturing Execution System) to

improve manufacturing competitive priorities

José Manoel Souza das Neves – [email protected]

Centro Paula Souza – MSc Program – São Paulo – Brazil

Getulio Kazue Akabane – [email protected]

Centro Paula Souza – MSc Program – São Paulo – Brazil

Fernando Augusto Silva Marins – [email protected]

São Paulo State University - Brazil

Abstract
Describe MES contributions for manufacturing performance as a cost reduction, quality
improvements and flexibility, conformity and reliability issues. From steelworks company case
study with production process tracking as fast, standardized, reliable and precise information,
MES contributes to improve shop floor performance to get manufacturing competitive
advantage.

Keywords: MES - Manufacturing Execution System; competitive manufacturing; organizational

factors; aluminum rolling company.

Introduction
Global competition has caused changes characterized by manufacturing products with
shorter and uncertain life cycles demand, so enterprises have adopted innovative technologies for
attending the customers that are requiring fast supply, low cost, and greater customization. The
ability to quickly and effectively respond so as to meet the needs of customers has become a
competitiveness feature for many companies (Dowlatshahi and Cao, 2006).
In the search of differentiation and increased production processes efficiency, the industrial
sector made major investments in the automation of the plant floor in recent years, especially
regarding the acquisition of hardware and software to support and to implement sensors,
actuators and PLCs (Programmable Logic Controllers), updating the machinery and the
supervisory systems SCADA (Supervisory Control and Data Acquisition).
With the new generation of information technologies, specifically the enterprise systems -
ERP - Enterprise Resource Planning, this information mismatch between the areas of the
company management could be solved and several problems can be avoided.
In this context, maybe the greatest aspect is related to the lack of a crucial link between the
information technology systems adopted by the enterprise, like an ERP, whose lack or deficiency
is evident between the automated processes with the other areas, ranging from production

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management (Programming and Production Control, Logistics, Supply), the purchasing area, as
well the financial and the human resources areas.
A solution to solve this lack of communication between the productive area and the ERP is
to adopt the MES - Manufacturing Execution System that provides the necessary links to
improve these relevant relationships, and improving the manufacturing process competiveness.
Unfortunately there is few published works on the contributions of the MES system use,
and this paper is focused on this literature gap. This way, this research was developed with the
intention of contributing to the knowledge expansion about the process of implementing the
MES, and how it improves the competitive dimensions of manufacturing. The research also
aimed to analyze what organizational factors can support the MES implementation, and for that
it is presented a case study in an aluminum rolling company.
So, in short, this paper has aimed answering the following questions: What is the
contribution of the implementation of the MES information technology to improve the
competitive priorities of manufacturing? How did the organizational factors contribute to the
implementation of the MES? To what extent the MES contributes to the competitive priorities of
manufacturing?
The paper is organized as follows: a short background on Information Technology Systems
and, in particularly on ERP and MES, is presented, and in the sequence are described the
research method and the case study in an aluminum rolling company; finally are commented the
results and are suggested future works related to the theme.

Background
Several studies discussed the implementation of the ERP in several kinds of companies,
focusing on its advantages, difficulties to its absorption by the professionals, critical success
factors, impacts into the organization and its collaborators, the relationship of the IT with the
business strategy, the increase of the competitive potential of the companies, and also the
possibilities for adopting it in small and medium enterprises (Al-Mashari and Al-Mudimigh,
2003; Bendoly and Schoenherr, 2005; Gupta 2000; Nicolaou, 2004).
Some related applications on Information Technology (IT) Systems literature have gained
importance in the business area. So, technologies such as CNC, CIM, MRP and MRPII, and
CAD/CAM systems are the main examples, and they are leading the companies, where they were
deployed, to a qualitative leap and competitiveness advantages in the global market. Particularly,
in the manufacturing area, the efficient and effective work as well as the use of information
became essential for an economic vitality and growth of the enterprise (Molina and Santaella,
2006).
Several providers offer MES systems in the market, which are suitable according to the
company needs. They are used in enterprises that already have ERP systems as well as
significant automated processes on the plant floor that will be integrated into the MES system.
The MES system ensures a more efficient management because it allows decision making
based on relevant, current and reliable information, allowing you to check what is happening in
the manufacturing company. The MES also consolidates the planning and the mapping to the
implementation of all production stages, processing applications connected to the control of the
production systems, optimizing the production processes, democratizing information and
integrating information, and in this way the MES provides a global view of production area and
in real time.

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 Figure 1 shows the desirable schematic view which comprises the integration, the MES,
the various organizational levels, from plant floor to business management.

SSM MES – Manufacturing Execution System

SSM – Sales & Service Management
ERP SCM – Supply Chain Managem ent
Management
SCM
ERP – Enterprise Resources Planning
P/PE – Product and Process Engineering
MES P/PE Controls – PLC, CSS, line and machine control

Controls

Figure 1 - The integration of MES among plant floor ITs and Enterprise Management Systems
Snoiej (2006)
According to Hayes and Wheelright, (1984), manufacturing companies have established
their business strategies based on a hierarchical structure. As an example, the operational
strategy arises from the need to meet the functional strategies that, in the case of the
manufacturing area, generate competitive priorities to cope with the market needs (Santos,
2000).
Each of the company's strategic areas was embedded with the IT solutions to improve its
efficiency and reach its goals. The main feature of these information technologies is to support
the fulfillment of the functional areas objectives. So, technologies such as CAD, CAM, CAE,
EDI have supported the competitive priorities of manufacturing, the ERP systems have provided
the business management strategy.
Company Strategy

Competitive Strategy ERP

Business
Strategy
Functional Strategies

Human Marketing Manufacturing Finance

Resource Strategy Strategy Strategy
Strategy

Operational Strategy

Competitive
MES Priorities of
Manufacturing

CAD, CAM,
CAE, Robotics,
EDI
Figure 2 - Integration of business management strategies with the priorities of manufacturing
from the IT systems and MES - Adapted from Hayes e Wheelright , (1984)

Figure 2 shows the structure of the company's strategies and the acting of the various IT
solutions, it should be observed that the IT resources used in functional areas, such as in the
manufacturing area, do not generate available information to the top management. The some
occurs with IT solutions for management business that do not reach to manufacturing. The MES

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system fills this gap, involving all functional areas, and integrating the plant floor to the top of
management level of the company.
The MESA - Manufacturing Execution Systems Association International -, an association
of companies which provide integrated MES system, has defined as a system that generates
information and facilitates the optimization of production activities since the costumer order to
finished product.
Kall (1999) and Choi et al (2002) define the MES, as a functional layer that integrates ERP
systems and controls the plant floor in order to manage the manufacturing production planning in
a feasible manner. MES fills the gap between the ERP system and the automated systems on the
plant floor.
According to Blackstone Jr. and Cox III (2004), the MES is a system of information and
communication for the production environment of a company. The MES has the purpose to
monitor and to improve all aspects which influence the production process, in order to achieve
high flexibility of production, as well as low production costs. It has also important features such
allows production records, production reports, product tracking and details of the planning and
scheduling process.
For Hwang (2006), the MES is a process information system that collects data, processes
and analyzes materials, semi-finished and finished products, equipments, time and cost, at the
production site in real time, i.e. it monitors the work while it is occurring. Concluding, the MES
system operates as a hub for distribution of data on the plant floor to all the other enterprise
systems.
The MES system include an information center composed of 11 elements or functions (see
Figure 3), which are joined to other databases. These include the main functions of the MES
(Hwang, 2006; Kletti, 2007; Snoeij, 2006; Yu et al., 2009). The central idea is to measure in
order to control so the performance indexes are used to compare the results of the production
lines within the same plant, company or with other known results.

Operations and Resource

Detailed Allocations
Sequencing and Status

Dispatching Document
Production Control
Units

Product Performance
Tracking and Analysis
Genealogy

Labor Management Process

Management Maintenance Management

Data
Quality Collection
Management and
Acquisition

Figure 3: Schematic of relationship between the various functions of

MES - Snoij (2006)

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 The functions shown in Figure 3 are integrated with sales and services (MSS), supply chain
management (SCM), enterprise management system (ERP), Engineering (PPE), and controls,
which can generate the mechanisms for production management by means a fully computerized
information, in a quick, safe and reliable way for the company (Vinhais, 1998; Hwang, 2006).
The integration of the management system with the operating systems is crucial for the
companies whose primary business is the manufacture, since the key information such as
financial activities and accounting, inventory management and asset management, are taken from
the plant floor date.

Method
In this research goals were to investigate the implementation of the MES system in the
production process of an aluminum rolling company and to assess the resulting improvement of
the competitive priorities of manufacturing having as supporters the organizational factors.
The method of case study concerns the study of a problem seen through multiple
perspectives and in its original context. The research was conducted by the method single case
study, and the object of study consisted of a multinational company, market leader in aluminum
products.
The main way of collecting data was through semi-structured interviews, additionally, the
research method included visits to the factory and plant floor observation. Internal documents
were consulted and selected to elaborate the questions for the interviews.

Case study
The studied company is a multinational, market-oriented and global leader in rolled
aluminum with respect to revenue, production volume and market share. Company has its
headquartered in Atlanta - USA, and through its subsidiaries and affiliates located in Asia,
Europe, North America and South America in the areas of mining of bauxite, alumina refining,
power generation, production of primary aluminum, in rolled aluminum and aluminum recycling,
as well as it has invested in research and technology.
It is a leading global supplier of aluminum rolled products, the largest single buyer of
aluminum and the world leader in aluminum recycling, has a presence in four continents, 11
countries, with 34 operating units, and approximately 12,900 employees worldwide. The
company is the largest on laminates in the world and one of the biggest producers of primary
aluminum in Asia.
The productive capacity of its plants is divided into the following main products: plates,
sheets, discs, sheets, billets, and finishing chemicals, beverage cans, household utensils, civil
construction, and in the automotive, transportation and packaging segments.
The interviews ware conducted with seven professionals of the studied company, with
great experience and involved in the implementation of MES.

Problems of the studied company and MES implementation

The implementation of MES in the studied company began in the early 2005 in the
remelting area, but effectively began operating in 2006. The MES was implanted, at the same
time, in three production lines for plates and recycling products in order to provide a unique
solution for the plant.

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 Considering the cold mill, the MES project started in 2007, and its operation at the plant
began in October 2008. The MES replaced the existing system that was based on an Oracle
system; its implementation is still running and it is being made in a web environment.
There was an interest in the area of remelting in the installation of the MES, because the
sector is very much automated and works with very large machine cycles, with at least 2 to 4
hours each. Particularly the hot-rolling mill requires that several variables that have to be set in
order to have more stability in the final product.
It was verified that the problems like lack of an adequate interface with the automation
resources, the need of performing nonconformity tests and the defect analysis, among other
problems were creating many difficulties and complexity for the operator. With the MES, the
operator can insert information data in the system without too much difficulty and without
spending a long time, in fact all areas started to have facilities for real time analysis, as for
example informing whether the forecasted production time was used or whether some product
nonconformity was observed in the period.
The remelting area is responsible by the process, its reliability and the people training.
There was already an automation structure focused on the process, but machine interruptions had
occurred and the information, like the stop machine indicators, of these facts were not accurate.
In the metallurgical process cycles there is the need of giving to the metal a rest during some
time, depending on the its size, kind of alloys, or even depending of its position on the
production list. The cold rolling mill needs a lot of information such as chemical composition
limits of thickness and width, as well as a lot of information for each batch to be produced.
Often, the equipment requires around 20 to 30 different parameters to machine setup in order to
make a specific product, and it is very difficult to machine operators perform a manual data
entry.
The remelting area produces in batches, not in a continuous process, and a production
order comes from the customers needs. The ERP chooses which line will be used for
manufacturing the product and what product characteristics, while the MES contributes with the
information where is located the product (which furnace stage) and information on which will be
the next product to manufacture. The MES does not choose the product position in the
manufacturing order, but it monitors the progress of the manufacturing order chosen. Monitoring
the operators’ decisions, it checks if the batch has satisfied the efficiency standards, and if this
does not occur it reprograms the production in order to increase the efficiency over time.
In the hot-rolling area, the existing manufacturing modules of the ERP were without
appropriate adjustments, and so they did not meet the information needs and the appropriated
integration level with automation. Therefore, for it be able to provide the same MES
functionality, and offer the same level of integration with the automation, several adaptations
would be necessary.
The implementation of the MES enabled increased accuracy of the input data on the ERP.
One example was the production of monthly closings, which was made very slowly and,
therefore, the production data and the observations on the process in real time made by the
operators that could avoid production errors are sometimes lost.

Final considerations
This section reports the results of the performed qualitative research based on theoretical
aspects and the case study. In this section it are presented the improvements observed in the

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studied company areas with respect to their competitive priorities of manufacturing, as well as
are identified the organizational factors that can adequately support a MES implementation.
In the theoretical framework available in the literature, seven competitive priorities of
manufacturing were identified (Costs, Quality, Delivery, Flexibility, Reliability, Product
Conformity, and Manufacturing & Strategic Business Integration). These priorities, and the
actions that are implemented by the company areas, are tacitly established between the
employees and the managers in the studied company, i.e., produce the set out quantities (and
achieve the goals) have precedence in relation to these priorities.
Interviews with those managers responsible for the manufacturing areas shown that the
concern for cost reduction and conformity attendance were clear, it also showed that had a large
integration in the manufacturing by means of the use of IT resources. In fact, the whole managers
training process and their involvement in the design and the implementation of MES, it was
made by the manufacturing area, by the IT department, and by the MES developer (external).
There was a significant decrease in gas consumption in the remelting area, not only by the
performance of the MES, but also by other lean manufacturing tools applied. With the double-
checking of the data entry of raw materials made by the operators and verified by the MES
system, there was a reduction of the non-conformity of the manufactured products. This
reduction increased the reliability of the area, and through a data log of product manufacturing,
enabled the tracking of the whole process in a retroactive period of up to two years. With the
reduction of failures in the setup of the equipment, the quality of the product area had a
significant improvement. Table 1 shows these improvements in the remelting area.

Table 1 – Improvement of competitive priorities in the remelting area

Priority Remelting Observations
Costs a) Reduced consumption of natural gas The reduction was also due to
(Approximately 5%). Natural gas is the the implementation of other
second largest cost to the company. quality tools with the MES that
b) Rework reduction contributed to the reduction of
gas.
Quality a) Reduction of failures in the setup. Only contribution of MES in
b) Reduction of errors in the introduction into order to implement double
the furnace of the chemical composition of checking.
the plates.
Delivery There was no change.
Flexibility Increased the flexibility of changing a Only contribution of MES
production line to another.
Reliability a) Registration data are available online, with Only contribution of MES
the possibility of tracking the entire process.
b) More transparent information
Product Reduction of non-conforming signs. The reduction was also due to
Conformity the implementation of other
quality tools with the MES.
Manufacturing Existing in the whole process. It is essential
integration with for business.
strategic
business

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 The hot-rolling mill area had as its goals the reduction of the production costs and
improving the productivity with the implementation of MES, as well as could obtain a better
lineup of the equipment with a consequent reduction of gas consumption. There was also a
significant reduction of rejection in the products leaving the mill, and with the reducing the setup
time from 10 to 15 seconds per product (plate) was increased the area productivity and its
flexibility. The best ability to track and control the production, in addition to the online
availability of performance indicators (charts, productivity, and use level) quickly led to a greater
reliability in the area. Table 2 shows the improvements with the implementation of the MES in
the hot-rolling mill of the studied company.
Besides that, in the hot-rolling mill area, it was performed a further study on the
implementation of the MES, which offer more accurate quantitative information on the
competitive priorities of manufacturing. In an interview with the hot-rolling mill manager, it was
observed that there was a reduction in gas consumption in the transformation process of the
plates coming from the remelting area.
After the implementation of the MES, it was reduced the use of gas from 24.4 m³ per ton of
coil production to 23.7 m³ in the first year, and to 22.6 m³ in the second year. These numbers
show a total reduction of 252,070 m³ of gas use in the first year of implementation of MES, and
of 690,120 m³ in the second year. This reduction generated savings values of US$68,500 on the
first year and of US$188,000 on the second year.

Table 2 - Improvement of competitive priorities in the area of hot rolling area

Priority Hot-rolling mill Observations
Costs a) Better furnaces scheduling, gas consumption reduction.
b) Elimination of discards in the wrong setup for the reverse
rolling mill.
c) Reducing the time of data appointment for operators
(1.5 min/pointer/plate).
Quality a) Reduction of rejection in the reverse rolling mill. 1.7% to 0%
rejection.
b) Improving the quality of information on the plant floor. Improvements
Delivery There was no change. achieved only
Flexibility Reduced setup time from 10 to 15 second per card laminated. with the
Reliability Traceability and control of production, besides the online implementation
availability of the performance indicators (charts, productivity, of MES
use level) more quickly.
Product Reduction of coils nonconforming.
Conformity
Manufacturing Existing in the whole process.
integration
with strategic
business

With the implementation of MES in the setup of scalping machine, the time was reduced
from 6 to 5 hours, and this reduction is due to the automatic registers allowed by the MES,
before these registers were made manually by the operator.
Since the MES implementation, the hot-rolling mill began to receive data on the products
to be laminated, performing automatically the equipment setup and significantly reducing the
possibility of errors, in fact there were no further rejections due to setup. Besides the

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improvement of competitive priorities of manufacturing, it was unanimously reported by the
three areas that a great gain was the possibility of tracking the entire process, from the its
beginning (receive the product orders) including the handling of raw material (remelting area),
the finished products manufacturing (hot-rolling mill and cold mill areas), and the final delivery
to the customers.

Conclusions.
The few studies, available in the scientific literature, did not characterize the importance
of the MES systems for the manufacturing area, and they showed that, in general, the
implemented MES systems have not relationship with the enterprise management systems.
During this research, it was evident the fact that ERP is not a system designed to help in the
manufacturing process improvements, mainly the automated and computerized processes of the
plant floor.
The case study also allowed verifying that the implementation of the MES in the studied
company improved the competitive priorities of the productive areas, as well as allowed
identifying the organizational factors, which can support this implementation.
A relevant contribution of this research was increasing the perception of the MES as a
system of integration of manufacturing with the system of business management. The vision of
the consulted areas of the studied company showed the importance of the MES system related to
the reliability of the information about production processes and the information dissemination
across the functional areas of the ERP.
The MES was identified to be a complement to ERP systems and focused on the
manufacturing areas allowing have traceability on their processes. In fact, this research showed
that traceability can be a competitive advantage for the company because, with it anyone can
immediately identify the entire route of a given product, from raw materials coming from
suppliers to the final product sent to the client. Additionally, this ability to track the product
position by the Web allows the final client knows where is your order.
By the case study, it was found that several organizational factors were important to
support the implementation of MES, such as: organizational culture, organizational learning,
teamwork and training. Also it was observed that in all implementing process, the support of
senior management was very significant to secure funding the acquisition system (including the
interfaces, the hardware and the people training) that allowed obtaining the returns on the
investment due to the performance improvements.
Therefore, the IT resources of the company, including the MES, should be integrated with
the company's business organization to ensure efficiency and the achievement of strategic
objectives.
In the case study, for the successful implementation of the MES and to reduce the impacts
on the people who were directly connected to the system, it was fundamental the formation of
teams comprised by leaders and area operators who were responsible for the IT resources and the
MES developer. These teams were multiplying in the areas where the MES was implemented
creating a value network to obtain positive results with the system implementation. The
observations and results obtained using MES were converted into procedures and new
knowledge for the company collaborators. Also these experiences meant that the company has
created an own process of organizational learning in the implementation and in the use of MES.

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 Other contributions to the business generated by this research are linked to the importance
of the MES for the manufacturing area and its importance in integrating with the business and
the organization.
The case study had shown the improvement of productivity with the MES and the
reliability of data and information available. The possibility of having a digital database allowed
the traceability of the products. With the support of WEB technology, the company can compare
the projected manufacturing time with the real-time obtained, and with these information can
improve the decision making process on manufacturing and the equipment utilization.
Usually, the MES consolidates the planning and maps all production stages, it allows
improving the production processes, and the MES disseminates reliable and important
information, integrating the factory as a whole and in real time.

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