Today, 93% of manufacturers already have special systems for shop floor management (MES), but only 23% have been able to combine them with office programs. Because of this gap, sales data and the actual operation of the equipment exist separately. As a result, managers promise customers impossible deadlines, but production does not have time to produce. To restore order, it is important to clearly define the boundary: where “sales” ends and “production” begins.
The ideal scenario for each production: a clear demarcation of functions between the three main systems: CRM (customer management), ERP (resource management) and MES (production management) within one universal platform.
Each of them has a narrow area of responsibility, and their correct demarcation is the key to stable work in production.
CRM: the zone of external obligations
CRM (Customer Relationship Management) is a system that works exclusively with data until the order is launched into production.
- Functions: customer registration, specification fixing, price and timing agreement.
- Responsibility boundary: the sales manager fixes clear agreements: what exactly the customer wants, when and for what money. As soon as the order in CRM moves to the “Paid” stage, the process moves to ERP.
ERP: Resource Management Zone
ERP (Enterprise Resource Planning) acts as the central hub of the enterprise. It is a bridge between the office (sales) and the shop (production).
- Functions: accounting for raw materials and materials, procurement formation, cost calculation, financial and accounting.
- Responsibility boundary: at this stage, the focus shifts to resource analytics. Heads of departments, financiers and supply specialists must clearly understand whether the company has enough capacity and materials to fulfill the order. The responsible manager uses the ERP system to obtain up-to-date data on warehouse balances, available resources and order fulfillment status in real time. If raw materials are lacking, the purchaser forms an order with suppliers directly through the system interface. As soon as the resource balance is confirmed, the order is approved and transferred for execution.
MES: Physical Execution Zone
MES (Manufacturing Execution System) is a system that works directly in the production facility.
- Functions: detailed planning of shifts, equipment loading control, recording of operations, accounting for defects and real time of execution of each technological operation.
- Boundary of responsibility: at this level, the focus shifts completely to the shop floor, where raw materials are physically transformed into finished products. Here, production managers, technologists and line operators manage the processes. Having received a planned task from ERP, the dispatcher or foreman uses the MES system to monitor the operation of the equipment in real time. Their task is to comply with the technology, control quality and record actual production. The system helps to instantly see a failure on the line, analyze the causes of defects and record the exact quantity of manufactured goods before transferring them to the warehouse.
Distribution of data flows (sequence)
In order for production to work without rush hours, information must move along a clear route:
- CRM transfers to ERP: a customer order with a list of requirements.
- ERP transfers to MES: a production task, which includes a technological map (what to do) and deadlines (when it should be ready).
- MES returns to ERP: data on the actual raw materials used, time worked and the result obtained (number of finished products). This allows ERP to accurately calculate the cost price.
- ERP returns to CRM: the order readiness status. Now the manager sees in CRM that the product is ready and can be shipped to the customer.
Do not try to make one system functionally different.
- When ERP tries to be MES (without detailed operations planning), the shop floor runs "blind".
- When CRM tries to manage production, unrealistic promises to customers arise because the system does not see the physical limitations of the equipment.
The boundary between the systems is the point of automatic reconciliation. If a lack of metal is recorded in ERP, the order simply will not pass the filter and will not enter production. This stops a mistake in the office, preventing it from turning into a simple one on the shop floor.
Example:
Case Study: Custom Manufacturing of an Industrial Fan
Stage 1: CRM (The Entry Point)
A client requests a fan with non-standard power specifications.
- Action: The manager enters the parameters into the CRM.
- Outcome: A price calculation request is generated.
Stage 2: ERP (The Resource Planning Point)
Once the price is confirmed, the order is transferred to the ERP.
- Action: The procurement manager checks the system: "Is a motor with the required power rating in stock?".
- Scenario A: The motor is out of stock. A purchase request is created and sent to the supplier.
- Scenario B: The raw materials are available. The manager reserves them so that another manager cannot sell this motor to a different client.
- Outcome: A "Production Order" is generated in the ERP, containing a list of materials, manufacturing tasks, shifts, and employees scheduled for the shift.
Stage 3: MES (The Physical Execution Point)
The ERP transfers the production task to the MES.
- Action: The shop floor planning system detects a queue at the CNC laser cutting machine. It schedules our order for Thursday, during supervisor Petro's shift.
- Process: Petro views the task on the shop floor terminal: "Cut housing parts (2 mm steel)." The machine sends a signal to the MES: "Part completed." The MES logs the electricity consumption and machine runtime.
- Outcome: As soon as the final part is manufactured, the task status in the MES changes to "Completed." Following the workflow outlined above, the order status is sent back to the ERP, and from the ERP to the CRM.
What would happen if the systems were integrated poorly?
- CRM without ERP: The manager sells items that are unavailable (e.g., discontinued components) because they lack visibility into real-time warehouse inventory.
- ERP without MES: You calculate profits based strictly on ideal theories, failing to notice how actual time and energy consumption on the shop floor erode your profit margin.
- MES without ERP: Shop floor operational data remains isolated. Even if tasks are transferred via Excel, you cannot determine the actual profitability of each batch, as real material consumption and labor hours are not automatically logged into financial accounting. This creates a "blind spot" where unmonitored waste drains your profits.
Examples of Data "Handover Points" (Integration Points)
1. From CRM to ERP:
- Product specification (technical parameters).
- Deadline (Delivery date).
- Delivery address and shipment terms.
2. From ERP to MES:
- Order number (for shop floor tracking).
- Drawings or a link to the routing card (routing sheet).
- Number of units (Quantity).
3. From MES to ERP:
- Actually consumed raw materials (weight, meters, pcs).
- Time spent (man-hours and machine-hours).
- Defect rate / Scrap rate (materials sent for rework).
4. From ERP to CRM:
- "Ready for shipment" status.
- Final cost of goods sold / Final cost basis (for the account manager's report).
Conclusion
Segmenting CRM, ERP, and MES into logical blocks prevents departments from passing the buck. Each level maintains its own distinct "Source of Truth":
- CRM: The client source of truth.
- ERP: The financial and resource source of truth.
- MES: The technological and production source of truth.
Efficiency is achieved not when you collect a "software zoo" of disjointed applications, but when the entire company operates within a unified digital environment. When CRM, ERP, and MES modules each have their own clear logic and area of responsibility, yet all operate on shared, real-time data. This eliminates information gaps, which currently prevent 77% of manufacturers from fully synchronizing office and shop floor operations.
Data synchronization within a unified system acts as a solid anchor for your profitability. When an order passes through the ERP, the system automatically cross-checks it against real-time stock levels and reservations. If raw materials are insufficient, the task will not proceed to production (MES). This is critical, considering that currently only 23% of manufacturers worldwide have achieved such full integration, while the rest continue to lose resources due to information gaps.
This material was prepared based on the ISA-95 system integration standards and the general principles of Enterprise Architecture.
