The decision to purchase a Manufacturing Execution System or MES, can be quite complicated, time-consuming and political. The reasons are obvious – an MES system has a huge impact on how operations are executed; how well production can be managed, and how well a manufacturer is poised for future product innovations requiring new business process management. While discussing a potential MES system, a company can face a multitude of questions that might be overwhelming, but are important to clarify in advance.
Do we need an MES solution?
Understanding and carefully assessing why you need an MES solution, will help guide the selection process. There are numerous potential reasons why manufacturers look for MES solutions, including:
- Enabling more control over production – MES solution ensures accurate information, it collects quality production data, and manages an accurate archive of as-built information, enabling better control of production operations, and faster response to problems when they occur.
- Integrating production with company operations – an integrated MES system ensures the company has timely and accurate product information to make effective decisions.
- Standardizing information across company operations – a cost-effective software solution which standardizes operations, and is optimized to meet the unique process needs of each location, will lower the cost of support and training.
- Meeting customer requirements for record keeping – many industries require archived production documentation for the lifetime of the product. New FDA regulations also require companies to manage document production more precisely. MES can automatically record and archive production data.
- Implementing sustainable quality improvements – Lean initiatives, lean manufacturing, and Six Sigma initiatives improve shop floor efficiency, but can be difficult to sustain. An MES can ensure procedural enforcement to sustain process improvements.
What do we want the system to do?
Once you have identified the shop floor challenges, you will define the necessary functionality of the system. Define the contributions to your business process in the MES, and determine the RoI of each. Prioritize items which quickly add to the RoI, and make positive contributions to the business.
The core functions of an MES solution could include:
1. Real-time, accurate information needed during manufacturing process
2. Complete shop floor data in one database
3. Rapid, accurate communication between stakeholders
4. Archival of production information and creation of an accurate, complete as-built record
5. Real-time analysis of current production
What will this cost us?
The initial implementation investment cost includes the purchase of the software, purchase of services from the provider, purchase of hardware for your shop, and the cost of internal staff in planning, training, and implementing the solution. Other costs, such as software maintenance, service fees, and staff support costs, will add to the investment. In addition, upgrades may be needed as your processes change. The grand total of your investment up to the time you replace the software with another solution, is the Total Cost of Ownership (TCO), a more accurate way of studying potential costs of an MES solution. Once the TCO is calculated, compare this to the RoI you developed to generate a net benefit of the MES, which will be used in finding funding for the project among Executive Leadership.
As a general rule of thumb, OOTB (Out-of-The-Box) solutions should meet at least 80% of all process needs before additional functionality and code is necessary. If a solution does not meet this standard, look for more robust software in the market.
There are a few points to consider as you look at TCO. If the MES solution has a low initial investment, but will need expensive upgrades or becomes obsolete quickly, the TCO will be very high. Study potential service charges that may be incurred for maintenance of the solution. Many times, companies will offer a lower cost for the initial investment, but require costly service charges.
Look for solutions that offer a low cost initial investment that delivers an adaptable -solution that is easily upgraded and requires little service provider support – keys to a low TCO.
Beware of service providers that offer a software license fee with an open-ended time and material proposal. These are often used to provide functionality and compatibility, but could potentially lead to a high-risk project that misses schedule and budget goals. Look for fixed-fee service contracts that meet your process requirements.
What is the best solution?
Once you have defined the shape of the solution, you’ll find yourself confronted with an array of options. One option is using your current ERP (Enterprise Resource Planning) or PLM/CAD (Product Lifecycle Management/Computer Aided Design) system to provide MES functions. Unfortunately, in most cases the transaction-based software of an ERP cannot efficiently meet the design and work flow-based needs of manufacturing. Because it was not designed to manage the work process flow of manufacturing, an ERP system will constrain efficiency, and add risk and complexity to the manufacturing process. A fully-functional MES was designed to meet these specialized needs.
Another option you will face is whether to use Custom Code or an Out-of-the-Box (OOTB) MES solution.
Advantages of custom code include:
- System with exactly the features and functionality you want
- No extra features, with a focus on your current processes
- System in use by no other manufacturer
There are three types of MES solutions – Out of the box (OOTB), Tool Sets linked to a solution using custom code, and Custom Code solutions. An OOTB solution is a ready-to-install-and- configure application to meet your process needs, while Tool Sets and Custom Code are applications written to meet your specific process needs.
Watch out for “least common denominator” solutions which potentially reduce, rather than increase, the efficiency in some locations. Your MES should quickly and easily allow local optimization at each location or production line without the need for custom code.
However, there are disadvantages to custom code. Changing custom code and adding functionality once the solution is developed, is time-consuming, expensive, and adds complexity. Support for custom code is usually outsourced, and the cost of services to enhance or upgrade the system is high, especially if different code must be written and tested for multiple sites.
An OOTB solution offers benefits that include:
- Quick installation
- Shortened learning curve for end users
- Ability to “see and touch” features before purchasing
- Less expensive
A point to consider – an OOTB solution may not have 100% of the functionality you need, requiring additional coding to address this issue. The solution may also use proprietary code that requires service from the provider. When considering an OOTB solution, investigate the service charges that may be required of the solution, and how much capability will internal IT resources have, to optimize the solution.
Another point to consider is cloud-based solutions. Many companies are moving slowly toward cloud-based with SaaS (Software as a Service) pricing model. There are advantages to a cloud-based MES, including less need for internal IT services and security of data and system back-ups.
There are risks and challenges as well. Many times, cloud-based solutions mean company data is held offsite by a third-party vendor. There are challenges to integrating a cloud-based solution, with enterprise systems that aren’t cloud-based. As you evaluate possible MES solutions, study more than the functionality of them. Look at other benefits and potential challenges of each, before making a final selection.
I have had the privilege to work with some wonderful and effective change leaders during my…
The O&G industry is particularly information-intensive, and managing large volumes of data…