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www.epiem.org I Proceedings of the 15th EPIEM Conference 2022
ERP and Digital Planning in Learning Factories for Increasing Digital Resilience
66
ERP and Digital Planning in Learning Factories for Increasing
Digital Resilience
Tanel Aruväli (tanel.aruvaeli@unibz.it)
Free University of Bolzano, Faculty of Science and Technology, 39100 Bolzano, Italy
Erwin Rauch (erwin.rauch@unibz.it)
Free University of Bolzano, Faculty of Science and Technology, 39100 Bolzano, Italy
Abstract
Enterprise Resource Planning (ERP) software systems have a crucial role in planning and
management of manufacturing plants. The level of efficiency in ERP usage is strongly related
with the architecture and hierarchy designed in its implementation. Additionally, manufactur-
ing long term values as digital resilience should be taken as precondition in the designing
process. Therefore, in this paper digital resilience supported ERP architecture design is pro-
posed through a use case of an ERP implementation. Results present the digital resilience
supported architecture of tangible machining and assembling resources, hierarchy of ware-
house locations in an environment of limited resources and routing for sample product. Fur-
thermore, the research covers preparation for further digital twin integration to the worker
assistant systems as well as a didactic purpose.
Keywords: ERP, digital resilience, Learning factory, Manufacturing system, Business pro-
cesses, Digitalization
Introduction
Enterprise resource planning (ERP) has become the core of manufacturing company soft-
ware systems. Due to wide implementation of ERP systems, the standardization of manage-
ment of manufacturing processes has reached a high level. However, each company needs
to make multiple selections how to implicitly approach the processes that are covered by
ERP. For instance, make-to-order and make-to-stock producers have different functionality
requirements based on different decision-making processes (Aslan et al. 2015). In most
modules and submodules of an ERP, there are different complexity levels provided. Addi-
tionally, the design of the architecture for resources, capacities, material movements, ware-
housing, reporting, etc. must be followed by company specific long-term values as digital
resilience to decrease the influence of disturbances. Thus, ERP provides standardization of
processes through large scale of modularization.
The paper is structured as follows: theoretical background consists of literature overview
on advances of ERP focusing on advantages regarding to resilience. The method section
explains the underlying ERP implementation use case for digital planning. Under results,
the proposed resilient architecture and hierarchy together with sample product routings are
presented and explained. Finally, the discussion section argues about redundancy cost
Proceedings of the 15th EPIEM Conference 2022 I www.epiem.org
ERP and Digital Planning in Learning Factories for Increasing Digital Resilience
67
and ERP impact for resilience overall. The research covers design of architecture and hier-
archy of (1) physical manufacturing resources and (2) warehouse locations in implementa-
tion of ERP considering the preventive quality of resilience only, namely absorption.
Theoretical Background
ERP is an industrial information and decision support system (Bayar et al., 2016) that covers
planning and management of several business processes in a company. While ERP stands
for planning of resources in the level of a company, predecessors for ERP in manufacturing
companies were Manufacturing Resource Planning and later Manufacturing Resource Plan-
ning II.
Implementation of ERP is an important task as it influences multiple qualities of manufac-
turing including productivity, resilience, and sustainability. According to the report (Panorama
Consulting Group, 2021), the average ERP implementation time is 15 months. Restructuring
of an already implemented architecture and logic of ERP management influences also other
departments and integrated software systems. Despite that majority of ERP providers have
added a Software as a Service (SaaS) solution in addition to on-premises solution (Ongowar-
sito et al., 2021) they still need support from manufacturing side for company specific imple-
mentation. Hankin et al. (2021) identified that one critical success factor for ERP implemen-
tation is top management support. Many challenges and impediments in implementing ERP
have led to relatively high failure rates of ERP implementation projects (Mahendrawathi et
al., 2017), whereas risk is especially implied to small companies without specific knowledge
and experience in ERP implementation (Svensson et al., 2021). To decrease the risk, Alas-
kari et al. (2021) have developed a 9-phase implementation framework for small and medium
enterprises.
Researchers have given different definitions to the term “resilience” (Gasser et al., 2021).
In general, a common definition is that resilience includes three focal components: (1) an
ability to absorb impact of disruptions (absorption), (2) adaptation to disruptions (adaptation),
and (3) recovery to its normal regime (restoration). Traditional methods to manage disrup-
tions are inclusion of redundancy in component level and preventive maintenance in system
level (Uday and Marais, 2013). In manufacturing, redundancy basically means having
backup machineries, tools, or workforce to absorb disturbances.
Method
The ERP system Microsoft Business Central was implemented in the Smart Mini Factory
(SMF) laboratory of Free University of Bozen-Bolzano. This is base for the development of
further digital twin integrated worker assistance and additionally it supports students in prac-
tical manufacturing related exercises. The work with the ERP allows students to understand
the responsibility and further consequences when designing an architecture and hierarchy
of ERP related processes and resources. Furthermore, ERP helps to simulate and play dif-
ferent situations that can come up in manufacturing.
The SMF laboratory is endowed with different type of assembly stations that are equipped
with touch screens to get access to the ERP system on every workplace. SMF is in a close
cooperation with another laboratory – Bitz Fablab (BITZ), that is equipped with machining
equipment as milling machines, laser machine, polishing machine, cutoff saw, vacuum form-
ing and 3D printers. This leads us to define two plants in our low variety make-to-stock pro-
duction network - SMF and BITZ. Additionally, subcontractors are used for certain operations
on the product components.
www.epiem.org I Proceedings of the 15th EPIEM Conference 2022
ERP and Digital Planning in Learning Factories for Increasing Digital Resilience
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Our objectives in ERP implementation were: (I) increasing resilience in manufacturing, (II)
while holding overall upkeep cost; (III) covering wide variety of possible manufacturing re-
lated scenarios; (IV) enable seamless manufacturing. Constraint in design of the architecture
was the limited number of manufacturing resources as available space, machinery, and in-
ventory. In this use case, ERP implementation covers hierarchy and architecture of produc-
tion units, warehouse locations, number series planning and design of main/alternative rout-
ing for a sample mechanical engineering product – in our example a simple pneumatic cyl-
inder. Each forenamed step additionally covers number series planning. Decision in ERP
architecture planning were analyzed according to the resilience quality of absorption.
Results
Main production units as machinery and assembly stations are managed hierarchically in
three horizontal levels (Figure 1).
Figure 1: Architecture of WCG-s (divided into internal and external)
The highest level is work center group (WCG) that divides the management of them into
internal and external. External WCG covers subcontractors that can be viewed and planned
similarly with internal production. This gives a uniform approach for all manufacturing related
planning. Internal production units are divided into work centers (WC-s) and machine centers
(MC-s) based on their homogeneity in capabilities. If some units are equal in their capabili-
ties, they are viewed as MC-s and work can be planned on WC level. Still, we allow slight
differences in capabilities of MC-s that belong into one WC. The reason of differences can
be machinery from different manufacturers or just natural wearing caused by rate of exploi-
tation intensity. In this case, planning for certain items can be made in MC level.
Proceedings of the 15th EPIEM Conference 2022 I www.epiem.org
ERP and Digital Planning in Learning Factories for Increasing Digital Resilience
69
Vertically, WC-s and MC-s are divided based on their location. Highest level location (loca-
tion code) is given based on belonging to certain plant. In Figure 2, locations with their label-
ling structure in SMF are presented.
Figure 2: Labelling of bin locations in SMF plant
WC-s and MC-s remain the same code for location (type) as is their WC/MC code to avoid
calling the same substance with different names in different departments. Despite of having
multiple shelves in some production units, these are not divided into multiple locations as
every movement of goods between locations requires to enable tracking of goods. In internal
plants, locations architecture (except machining units) has three parameters, namely loca-
tion type, shelf, and bin. Location type defines the type of goods that are stocked. Consider-
ing limited resources and sustainability, many type of items can be stocked in the same rack,
but in different shelves. The smallest location unit location numbering consists of 6 digits (2
digits for location type, 2 digits for shelf and 2 digits for bin).
For pneumatic cylinders, main manufacturing routing follows an optimized manufacturing
plan (Figure 3).
Figure 3: Pneumatic cylinder - main and alternative routings
www.epiem.org I Proceedings of the 15th EPIEM Conference 2022
ERP and Digital Planning in Learning Factories for Increasing Digital Resilience
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Alternative routing is based on default available redundancy. For instance, based on opti-
mized scenarios, assembling is planned in SMF0100 that includes assembly line (three as-
sembly stations) to decrease work in progress time and to increase ergonomics. Alterna-
tively, all these parts could be mounted in SMF0200 in single digitally assisted assembly
station. Item numbers as inputs for every operation in specific WC/MC are presented. There-
fore, input for first operations is raw material that can be easily distinguished from other items
based on its labelling structure. Whereas raw material 9-FE-D14X6000 is sent directly from
material provider stock to subcontractor as length of iron bars is 6 meters.
Discussion and Conclusion
ERP provides several complexity levels for different modules and architecture options based
on manufacturing logic and objectives. In ERP implementation phase among other critical
decisions, planning of number sequences, warehouse locations architecture and manufac-
turing resources hierarchy have crucial role in latter seamless usage of ERP. Resilient ap-
proach in implementation emphasizes redundancy. Although, additional redundancy in-
creases the cost of a system (Youn et al., 2011) and decreases sustainability, usage of de-
fault available redundancy retains the cost level and even increases sustainability through
more efficient usage of resources. ERP enables to increase resilience through more detailed
and flexible planning. However, availability issues of the ERP system as crucial enabler for
smooth manufacturing workflow becomes a threat. Therefore, reestablishment of main man-
ufacturing structure in relation to planning must be ensured also without ERP. In this case,
digital twin integration can provide additional resilience by backing up most important ERP
information that is constantly used in relation with real time monitoring data to improve plan-
ning even further.
The bases for future digital twin realisation for worker assistance was realised through
the implementation of an ERP architecture and hierarchy of resources, processes, and logic
between them. The implemented solution supports a resilient approach through increasing
of redundancy without additional system cost. Additionally, the designed solution also covers
didactic purposes in SMF laboratory for teaching students how to design and to use ERP in
manufacturing companies. The proposed solution contributes to increase resilience of man-
ufacturing through increased absorption of impacts. Nevertheless, ERP integration with man-
ufacturing execution system, data visualisation software and a central database is needed
as well as deployment of real time monitoring, data analytics and bidirectional data exchange
to realise a digital twin for resilient workstations (Rauch and Aruväli, 2021).
Acknowledgement
This project has received funding from the Autonomous Province of Bozen/Bolzano, De-
partment Innovation, research, universities and museums (ASSIST4RESILIENCE: Increas-
ing Resilience in Manufacturing - Development of a Digital Twin Based Worker Assis-
tance).
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