Why Integrate ERP Software with the Shop Floor PLC System?

Benefits of ERP Software Integration with Shop Floor PLC System

As a manufacturer, you understand the importance of finding new ways to save time on labor and money on material while increasing productivity. The main goals for any business when implementing ERP software (enterprise resource planning system) are to cut costs and increase performance.  ERP software helps businesses accomplish this with the following capabilities:

• reduced operational costs
• increased company profits
• improved ease of use with process automation
• more accurate data with real-time information
• better management of company assets, inventories, capacity, schedules, forecasts, orders, etc.

Economic realities are making ERP software implementations almost compulsory for every business in every industry. However, manufacturing is one of the sectors that benefit the most from the use of ERP software. This is because ERP software provides manufacturers with tools and functions that make daily work easier, faster, and more accurate.

ERP software helps manufacturers with the following capabilities: 

• improved product costing
• sales and operations planning
• demand management
• material requirements planning
• long-term planning
• production order creation
• capacity requirements planning
• production execution, etc.

In a manufacturing environment, the ideal set up of an ERP software system is where business operations are integrated with the manufacturing processes that take place on the shop floor or production line. All too often, the shop floor programmable logic controller (PLC), which is an automated control for plant floor machinery lines is not connected to the ERP system.

The shop floor has numerous entities, devices, and equipment that generate different types of data; it is safe to assume that a big percentage of that data is essential for company management.

Shop Floor PLC systems often gather data such as:

• time per job
• time per machine
• idle times and downtimes
• setup and cycle times
• number of units produced or rejected

Considering how important this data would be to a manufacturer, it’s understandable as to why combining the two systems would be beneficial.  Combining systems, however, is no easy task, and you might be thinking “Why can’t we just take the data from the PLC directly and avoid the hassle of integrating two systems?”

And the answer is: because the PLCs cannot store data. They collect data and give real-time access to plant-wide information, but they do not keep a record of the data.

Another answer is: because unlike ERP systems, PLC systems can’t convert the data into comprehensive reports relating to production or break the data down into useful information for the management, which improves the decision making process.

Many departments would benefit from the integration of ERP software and PLC systems – management and production, of course, but also the maintenance department. The ERP system has a Plant Maintenance module, which stores information about the various pieces of equipment, and the PLC system detects when machines need updating or fixing; combined, this information would offer the ability to create proactive and preventive maintenance plans. The maintenance schedule for each machine, as defined in the ERP system, would be synchronized with the PLC system’s knowledge of the actual machine condition and operations, keeping the technical staff one step ahead of the possibility of a costly equipment breakdown.

Providing real-time/current information in addition to historical information, the integration of an ERP system with a PLC system would increase the transparency and visibility of information, allowing company management the opportunity to make smarter, more informed decisions.
The end-users would also gain a significant advantage from the automated data generation, as it would lessen the amount of time-consuming manual work and lower the possibility of errors.

In short, the integration of ERP systems and PLC machines would help a company:

• meet and/or exceed quality standards
• reduce equipment breakdowns
• cut maintenance costs
• maintain regulatory compliance
• increase operational efficiency
• improve data transparency and visibility
• create comprehensive reports
• execute real-time monitoring and control
• automate data generation and collection
• store historical data
• improve the decision making process
• reduce labor cost and human errors

Integrating ERP systems and PLC systems is essential to businesses because it increases productivity, company profit, and operational efficiency and decreases costs and losses – universal goals among companies.

Please contact John Shepperson at 800-320-0210, email john@oatesco.com or visit www.oatesco.com and a member of our ERP software consultant team will help answer any questions you have about this article or your ERP evaluation. For more information about Sage ERP X3, Sage 100 ERP, Sage 500 ERP, Sage CRM and Intacct. We offer a free needs assessment to help you get started.

Oates & Company helps businesses remain competitive in today’s market through the effective use of technology and processes. Oates & Company is a group of former accountants and technology professionals and we’ve walked in your shoes and conquered similar challenges. If you consider your critical business applications a strategic initiative, Oates & Company is here to help.

Another version of this blog was posted on Oates and Company’s Blog on April 1, 2014 - Benefits of Integrating the ERP System with the Shop Floor PLC System