01  The Solution to the Supply Chain Crisis

In recent years, the COVID-19 pandemic, the semiconductor chip shortage, and the war in Ukraine—combined with the alternating effects of scheduled power restrictions over the past two years—have dealt a severe blow to manufacturing supply chains. In 2021, the number of social media mentions related to supply chains reached 25,636, a 13-fold increase compared to 2019. The globalized world order that had fueled globalization, along with resilient and efficient supply chains, is now falling apart, as everyone seeks supply chain security within their own regions.

Therefore, it has become an excellent choice for companies to leverage technology to reconfigure their supply chains and achieve new levels of efficiency through intelligent manufacturing. In recent years, China’s smart manufacturing and industrial cloud platforms have been rapidly developing. Optimistically speaking, by 2035, supply chains will be fully digitized and automated. Consequently, companies should focus on the integration of technologies to reshape their supply chains and achieve lean and self-sufficient operations—but how can this be accomplished?

To answer this question, let’s first imagine a scenario: In a bustling automotive parts manufacturing workshop, an automated production line is running smoothly and efficiently. The planner releases production tasks from the ERP system, and the production supervisor, taking into account constraints such as capacity, assigns specific workshop schedules. But before that happens, the process engineer has already shared the process specifications with the manufacturing department. Then, workshop operators take control of the equipment and begin executing the production tasks. Parts are assembled one by one and sent down the production line. Once production is complete, the relevant data is fed back to the planner. The entire process is highly efficient and accurate—and most importantly, it doesn’t involve the dense staffing levels typical of traditional workshops. And making all of this possible is the most important component in today’s smart manufacturing software—MES.

02  A market where many contenders vie for supremacy.

As the “brain” of the workshop, the MES sits between the higher-level planning and management system (ERP) and the lower-level industrial control systems. It provides operators and managers with real-time visibility into plan execution, tracking, and the current status of all resources—including personnel, equipment, materials, and customer demands.

Driven by the nation’s smart manufacturing strategy, the overall MES market has seen a significant growth rate in recent years. In 2017, 2018, and 2019, MES experienced relatively rapid growth, partly due to the resumption of projects in industries such as petrochemicals, chemicals, metallurgy, and tobacco, which made substantial contributions to the overall market. However, as the growth rates of traditional industries slow down over the coming years and the MES market becomes increasingly mature, its growth will stabilize within a certain range.

In the vast majority of smart manufacturing projects, MES is employed, and the MES system itself can also be implemented as a standalone project. Over the past few years, nearly 30% of MES projects have been part of smart manufacturing initiatives.

Since MES—and indeed the entire smart manufacturing sector—is an emerging industry still in its early stages of development, each company’s MES system has its own unique applications and designs. Consequently, in 2019, China had over a hundred local MES suppliers, with relatively low supplier concentration and a highly fragmented brand landscape. Many foreign-invested manufacturers, leveraging their long-standing expertise in industrial automation, entered the Chinese smart manufacturing market and gradually became leading players; however, none of these companies managed to achieve a market share exceeding 10%.

Among other suppliers, some are manufacturing companies that were originally MES customers. However, due to their high level of IT expertise, these manufacturers independently develop MES software tailored to their specific business processes and operational needs, based on the actual conditions of their factory operations. While initially satisfied with their own in-house applications, they have gradually begun to promote their self-developed MES products externally.

Take STEP as an example: As a veteran automation manufacturer, in recent years it has also responded to the broader trend of smart manufacturing by starting to develop software systems related to intelligent manufacturing itself. On September 28, 2022, STEP launched a new-generation workshop manufacturing management system—eMES. The "E" in eMES stands for evolution, reflecting STEP creative philosophy behind this next-generation system. With this launch, STEP aims to convey a key message: whereas traditional MES systems merely achieve the goal of production informatization, STEP new eMES system takes things to the next level—enabling intelligent production.

The eMES system features eight core functionalities, with equipment management and energy management being the two most prominent. These functionalities enable analysis of equipment energy consumption differences and energy-saving improvements, preventive maintenance, equipment ledger management, and real-time equipment monitoring. The eMES has been thoroughly validated at STEP’s factory and has now reached maturity and is ready for commercial deployment. It will be integrated into comprehensive smart manufacturing solutions to be offered to customers.

The reason these functions can be achieved is that eMES integrates processes such as SCM, CRM, ERP, PLM, and WMS. Specifically:

1. The production order data required for eMES planning and scheduling will be obtained in real time from the ERP system through system interaction, providing a complete data source for eMES’s subsequent production operation management.

2. The material requirements planning data generated by eMES scheduling is synchronized with the WMS to guide logistics personnel in delivering materials, thereby ensuring the continuity of production.

3. By synchronizing the PLM system with eMES, the company can achieve lifecycle management from product development to product realization. The PLM system provides the process BOM data required by eMES, while eMES, in turn, uses this data to verify information and provide feedback to the PLM system, thereby helping the company’s technical departments refine and improve their technologies.

4. With this ingenious architecture, thanks to the presence of OPEN APIs in eMES, we can seamlessly integrate numerous systems such as ERP, PLM, and BI, thereby providing the necessary technical support for STEP’s highly collaborative digital transformation.

A major pain point in industrial intelligent manufacturing has always been the difficulty in seamlessly connecting various links and processes. The approach taken by STEP eMES is to leverage OPEN APIs for connectivity, enabling smooth integration among multiple systems and thereby avoiding potential bugs or other adverse issues that might arise during data import, export, or integration. Furthermore, the presence of OPEN APIs prevents other systems from directly interfacing with the ERP system, thus safeguarding the integrity of the ERP system and reducing the risk of failures. Finally, OPEN APIs facilitate highly coordinated collaboration among STEP numerous systems and enable real-time data synchronization across different systems, alleviating employee workload and reducing operational intensity.

In addition, STEP’s eMES system not only enables information-based and readable production in the workshop but also performs quality inspection and provides real-time feedback under AI-powered visual inspection, making the entire workshop operate more intelligently—rather than becoming “dumb” or merely “mechanized.” This is precisely one of the major drawbacks of traditional so-called automated production. Moreover, STEP pays special attention to equipment energy consumption management and real-time equipment monitoring, thereby reducing equipment wear and tear. Of course, all these functions are supported by a visual data platform, truly realizing a “workshop brain” that is both controllable and manageable.

Some perspectives

Overall, as an intelligent manufacturing software system positioned at the forefront of production, MES has been widely adopted for a considerable period in process automation industries such as petrochemicals and metallurgy. Currently, MES enjoys a high penetration rate in these process automation sectors, leaving limited room for future growth. However, discrete automation industries—including electronics manufacturing, lithium batteries, and home appliances—have experienced rapid development in recent years and are poised to become the primary drivers of MES growth in the coming years, making them the focal point of competition among relevant enterprises. Moreover, the automotive industry, with its relatively high degree of automation, has already widely implemented MES systems. In this sector, companies that possess strong competitiveness can continue to tap into untapped market potential by offering more refined workshop solutions and smarter, more user-friendly operating systems, thereby gaining a competitive edge in the market.

It is expected that, as China’s manufacturing sector accelerates its transformation and upgrade, manufacturers will increasingly demand greater efficiency and security in their supply chains. This creates an opportunity for a number of outstanding domestic companies specializing in intelligent manufacturing to rise to the occasion, gradually shifting toward domestic substitution. For companies like STEP and others, this represents a “blue ocean market” that they should seize with both hands.

Source of this article: Rui Industry

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