29 Sep Extending MES value past a pilot
Well begun is half done– Aristotle
Most manufacturing organizations around the world now realize that in order to be Industry 4.0-ready, they need an MES application orchestrating their operations processes. Through collaboration with IT, manpower and the manufacturing landscape, the cyber-physical environment, which constitutes the basis of the new revolution, can be created across the value chain.
Establishing the need for an MES at the C-suite level is perhaps the first and most significant step in the long but highly rewarding journey of MES implementation. The drivers which lead to a decision of implementing an MES system are aligned with most strategic business objectives. MES systems can contribute to labor and material cost reduction, process improvement, quality gains, waste and lead-time reduction, improved maintenance and yields, better decision making, lower risk and most importantly, improved profitability.
However, from the time that the need for a MES is clear to the management, to the time an MES is deployed across the value chain and starts delivering on the improvements mentioned above, there will be a time lapse of at least 2 to 3 years. This is especially the case in organizations which have multi-site manufacturing, with complex supply chains and billions of transactions happening across the entire business process in a single working day.
It is imperative for any organization determined to adopt a modern MES and pursue a complete digital transformation to reflect on few critical factors to ensure that the implementation is actually a success and does not lead to user and board frustration, due to lack of tangible and qualitative benefits.
How to start your journey – Assessment and goal setting
First and foremost, start by understanding the level of complexity which exists within the organization’s supply chain, which means evaluating each and every site in terms of capability from an operational, IT systems maturity, scalability and of course, manpower capability perspective. Understanding the status quo will help reveal two vital facts, especially in case of multi-site operations: first, whether any standardization exists across the plants (lack of standardization increases the inherent level of complexity that you must deal with); and secondly, understand which areas can more quickly benefit from immediate improvements lead by process digitization.
An important input when evaluating the status quo is employee perspective. Engaging employees from all facets of a multi-site organization helps to appreciate the diversity of needs, and can make all the difference in understanding the complexity which exists in the current operation. Another critical factor is aligning deliverables across the plants to coincide with corporate and site-specific strategic initiatives, ensuring that key internal stakeholders support the digital transformation. Change should ideally be perceived as necessary, not disruptive or unneeded.
Implementing an MES leads to qualitative benefits of real-time decision making, mitigated compliance and quality risks, but these do take some time to reflect in the bottom line. As such, quantitative objectives based on operational and financial KPIs should also be defined.
Whatever goals are set, they need to be synchronized across the deployment sites. The objective is to capitalize on existing standardization and scalability. In cases where they don’t exist, you can identify and deploy specific, targeted projects to test prior to a large scale rollout.
Once a clear picture of the status quo is established, and areas are identified where management and process stakeholders envision they should see benefits, the next step is to establish the solution set. Industry experts who specialize in services for digital transformation and MES vendors that specialize in your specific industry segment, manufacturing style and match your culture need to be selected prior to project kickoff.
In most cases, the results of the initial assessment will reveal a reality that is much too complex to fully transform with a one-step initiative. The definition of one or more pilot projects is critical to mitigate the risks of process disruption and achieve a quicker return on investment by addressing high-benefit/low-effort opportunities, encouraging additional investment to achieve the long term business and process transformation enabled by MES systems.
Selecting an MES is not a trivial task. There are different strategies for ensuring that the solution you select matches your business style, type of industry you are in and budget, with a vision of future-proofing your organization. An important aspect is MES modularity—this means that the MES solution can be implemented iteratively, according to goals defined for the initial pilot projects.
At this stage, it is vital to target enough use cases across the plants. Identifying only one or two use cases may undermine your efforts, leading to frustration across plants and stakeholders if optimum results aren’t achieved. Companies who have managed to successfully implement MES for digital transformation pursued 10 or more use cases across plants, allowing for harmonized digitization to occur across the value chain.
For example, let’s consider a company with multiple plants across the world. While performing the status quo analysis to determine the current organizational complexity, it was uncovered that downtime in most plants has significantly increased over the past few years. Traditional downtime occurs due to unforeseen and/or frequent breakdowns in bottleneck equipment. The cascade effect of downtime is significant: lowering yield; increasing overall lead time, and increasing costs of dealing with the breakdown itself.
The MES implementation team, responsible for the pilot might target the establishment of predictive maintenance as a proof of concept, so that the ROI in the short run may be clearly demonstrated.
While there may be other use cases, such as quality improvements, WIP material reduction, scrap reduction or other quantifiable operational use cases, the project team should ensure the MES module pertaining to maintenance is deployed during the pilot. This will lead to maintenance practices becoming less reactive and more proactive or even predictive, if all goes well.
A modern MES is capable of analyzing data of past breakdowns, correlating it with present maintenance events and using ML to predict future failure occurrences. This in turn would help plant personnel better respond to events which avoid breakdowns (and the resultant downtime) from happening. The changed behavior regarding downtime and maintenance practices during the course of pilot review itself would make evident the fact that MES is indeed capable of delivering results across plants at scale.
Following the successful implementation of one or more pilot projects, the challenge is to scale the benefits organization-wide, expanding MES utilization to cover more processes and scenarios, or rolling out the solution across all sites.
Reap the Rewards
Gartner has shown that MES can bring improvements in as little as three months in key areas like quality, data visibility across multiple sites and compliance. Other improvements include reducing cycle time, improving asset performance and supply chain performance.
MESA International’s study on Metrics that Matter show financial improvements from MES on profits (10%); costs per unit (13%); on-time delivery (12.5%) and EBIT (8.5%).
What these metrics reflect is quite simple: if the MES pilot is deployed, with focused use cases which are of highest priority, and if the team implementing and the application itself are capable enough, short term results will most likely be achieved within a short time period to justify the initial investment. Again, these results are dependent upon the support of your manufacturing infrastructure—management and the teams which own and operate the process—to ensure the digital transformation will succeed.
A long-term view is vital in determining whether the MES implementation succeeds in your value chain. In the short run (meaning less than 12 months duration) the MES will lead to efficiency gains, cost reductions and improved quality, In the medium term (12 to 36 months) you will experience lower inventory costs, shortened cycle times and large-scale process improvements; while in the long run, the benefits increase in depth and become all-encompassing from a business perspective, ranging from improved, fact-based decision making at a strategic level to reduced time to market and develop new products, to higher asset utilization and value chain agility (Gartner).
The modern MES is the driver for industry 4.0, as it not only integrates the whole value chain, it also enables technologies which form the basis of Industry 4.0 within its functionality. This MES, when deployed, will deliver short term gains, which satisfies the ROI goals. The decision to pursue MES has to be strategic, with a long-term vision of what ‘success’ means if the MES is to truly lead to the desired transformation of the current business. The MES breaks down the separate silos of information to a highly digital, integrated value chain, which is robust and agile. And the MES pilot then accomplishes its goal—as a proof point that MES can be used for organizational improvements on the path to achieving Industry 4.0’s digital transformation.