Manufacturing Execution Systems: What You Don’t Know Can Hurt You
Smart Manufacturing is the manufacturing of the future, and, at its core, works to save time, money, and resources. One valuable tool in the move toward Smart or Smart(er) Manufacturing is the implementation of a manufacturing execution system. A Manufacturing Execution System (MES) is an automated system that utilizes real-time data to assist you in measuring how your production equates with financial performance.
As we continue on the path to a data-driven culture, it is imperative for manufacturers to have systems in place equipped to collect and analyze facility-specific data. Implementing an MES is a way to connect your current operations to your output and performance levels, leading to a more efficient and productive manufacturing facility.
Historical Data
For years, manufacturers managed this need to apply metrics to facility improvement by scouring their month-end books to determine their areas of profitability. However, the skills that provided them with successful business operations and production were not the same skills required to best analyze the data available.
This led to a cycle of continual problem finding rather than proactive problem solving. This was especially true for small and medium-sized manufacturers (SMMs). Until recently, this cycle was the status quo, but with the benefits now available through MES, all manufacturers can better assess operations to increase financial performance at an expert level – but without the cost of expert-level resources.
Make the Most of MES
A system that gives SMMs access to top-of-the-line reporting and analysis that results in an efficient, effective, and real-time evaluation of your performance will far outweigh any potential front-end learning curves.
Put simply, implementing an MES will allow you to hone in on profitability and provide the freedom to devote more resources to areas of greatest return. Its ROI can be quickly measured against any financial or resourcing costs by the production and revenue increase you will see. Here are a few ways that an MES can support your operations:
Linking Production to Actual Costs
You might have met your overall output goal for the month and delivered products as promised, but you may have had to overcome down time and run machines longer or faster than preferred, or skipped preventive maintenance. You might have had large amounts of overtime. Or you met a quality control goal of not delivering bad parts but in order to do so you added a layer of inspection, additional material handling or scrap. An MES measures inputs and outputs, so it is able to deliver a more holistic and detailed report of how production impacts finances.
Resource Allocation
By utilizing a management software system to collect and analyze significant data points and report the outcomes, you are able to allocate your workforce in ways proven to boost your productivity. First, your current workforce can focus on their areas of expertise – letting them do the work that has brought you success. Secondly, with the knowledge gained through your MES, you can begin to plan ways to diversify your offerings.
Confirming KPIs
Your KPIs should be based on inputs, not just outputs. Even if you meet your delivery goals, you may still have room for growth. Using an MES helps you to focus your mindset on defining, measuring, analyzing, and controlling what is actually driving your business. An MES gives you the data to make operational adjustments, breaking the cycle of problem finding and paves the way to problem solving.
Schedule Attainment
Schedule attainment is proactively planning to ensure that you are meeting all internal and external expectations, leading to a highly efficient operation. Operating your facility through the schedule attainment lens of an MES allows you to more easily accommodate scheduled maintenance, adapt to unexpected staffing issues, and remain agile if a rush order arises.
Challenge the Challenges
There are common challenges to MES implementation and knowing what some of these challenges may be can help you proactively address any issues.
Be Prepared
Before selecting a MES solution, be sure the provider best fits your needs. Not all MES providers are created equal, so it is important to be sure that your provider will be able to upload all of your current historical data into the system.
Another area to be prepared for is the mapping of your value stream, a representation of all activities required to produce your product, from design to marketing to getting your product into customers’ hands. This level of mapping workflow will be integrated into the MES system.
Potential Resistance
The systems and institutional knowledge you have in place have contributed greatly to your success, so it can be difficult to implement new processes and behaviors. Small changes – such as using new reports rather than data spreadsheets – can slow adaptation. Even automating scheduling can cause anxiety for some employees, but there are ways to overcome this fear and hesitation that comes along with any change.
The depth and detailed visibility that data provides can shine the light on weaknesses within the organization. Even though greater productivity leads to greater success, the added visibility can be interpreted as a threat to current employees and the systems with which they are accustomed.
It can be easy to put off a new investment. However, we have seen the return on investment an MES can provide. One company we worked with quickly recouped its MES investment by identifying an $800,000 loss in materials each year. Another manufacturer learned a sales priority had been placed on the product with the lowest margin.
Getting started is as simple as a phone call to your local MEP Center. If you aren’t sure who to contact, you can find out here. Our sole goal is to support the needs of SMMs across America. We’d love to help you determine how an MES or other advanced technologies can boost your bottom line.
Chuck Werner
Manager of Operational Excellence
Michigan Manufacturing Technology Center
Chuck Werner has vast experience in the areas of design, communication, implementation, and leadership of operational systems to provide a consistent return on investment for an organization. He takes his results-driven approach to work alongside SMM assisting them in reaching their growth and profitability goals.
