Illustrative scenario—not a client case study.
The manufacturer operated two production lines with MES capturing output, scrap, and downtime. ERP held work orders, material consumption, and cost allocation. Finance needed production data to close the books. The plant manager needed cost data to explain variances.
Every month, the same pattern: Finance requested production figures. The plant provided spreadsheets. The numbers did not match. Material consumption in MES did not align with ERP backflushes. Scrap was recorded at different times in different systems. Yield calculations used different denominators. The finance controller and plant manager spent five to ten working days reconciling before the close could be signed off.
Overtime increased. The close deadline drove stress. Leadership assumed the problem was system integration. A diagnostic was commissioned to identify what was blocking a faster close.
Interviews revealed consistent themes:
ERP sent work orders to MES. MES was supposed to return actual production, material consumption, and scrap. In practice:
There was no documented definition of which system was authoritative for which figure. No one owned the handoff. Reconciliation was the plant manager and finance controller negotiating until the numbers “close enough.”
Scrap was the largest variance driver. In MES, scrap was recorded by product and shift. In ERP, scrap was sometimes entered by work order, sometimes by general journal. The two were not reconciled before close—they were adjusted.
Yield was calculated differently: MES used actual output vs planned; ERP used standard vs actual for cost. When leadership asked “what is our yield?,” the answer depended on which report they looked at.
Material consumption suffered the same problem. MES had real-time consumption from the line. ERP had backflushed consumption, often with manual overrides for rework or spillage. No single definition existed for “actual material consumed.”
The reconciliation was done in a spreadsheet maintained by the finance controller. It matched MES exports to ERP figures, applied adjustments, and produced variance commentary. The logic was not documented. When the controller was absent, no one could replicate it. Adjustments had no clear traceability to source.
Integration would not fix this until governance was clarified.
Before any system changes, the manufacturer:
Defined the authoritative record — For production quantities, scrap, and material consumption, MES was designated as the source of truth. ERP would receive data from MES on a defined schedule. Manual overrides in ERP required approval and documentation.
Standardised definitions — Scrap, yield, and material consumption were defined in a single document. MES and ERP configurations were aligned to these definitions. Existing discrepancies were documented and resolved over one close cycle.
Assigned handoff ownership — The plant manager was made accountable for MES data accuracy by a defined cutoff time. Finance was accountable for ERP cost allocation. A single handoff point and validation checklist were documented.
Documented the reconciliation process — The reconciliation logic was captured in a procedure. Validation rules were written down. A secondary review step was added. The process could be replicated if the controller left.
The first close after these changes took six days instead of ten. Within three months, with refinement, the close was consistently completed in three days. The time savings came from:
If a similar pattern exists in your environment — production figures that require manual reconciliation, definitions that vary between finance and operations, or a close that depends on one person’s spreadsheet — the starting point is understanding where ownership and definitions are missing, not replacing systems.
See Manufacturing Data Strategy for the governance framework, or Production and Operational Data Strategy for how MES-ERP handoffs are addressed specifically.