Manufacturers should routinely ask themselves: “How do I know what my problems are?” The old school way to answer this question was based on having the resources to produce spreadsheets of operational data and the expertise to analyze the data and understand how to respond.
This does not describe most small and medium-sized manufacturers (SMMs). They are often resource- and talent-challenged. But these conditions also are what should make the advancement of Manufacturing Execution Systems (MES) so attractive to SMMs. Using an MES helps focus on defining, measuring, analyzing and controlling what is actually driving the business. It will deliver a more holistic and detailed report of how production impacts finances.
It provides the equivalent of expert level resources to review operations in real time and make recommendations – but without the cost of expert-level resources.
An MES is manufacturing operations management software that accounts for inputs and outputs. Costs for the software vary greatly but begin with a cloud-based approach that is approximately the cost of a full-time equivalent (FTE).
Implementing an MES allows manufacturers to home in on profitability by linking production to actual costs. For example, meeting a production goal does not necessarily equate with profit or efficiency. A manufacturer might have delivered products as promised, but at what cost? Were machines down that required repair costs and overtime shifts to make up for lost time? Or, did they run machines longer or faster than preferred, skipping preventive maintenance for yet another month and are now flirting with a higher risk in the near future? Maybe they met a quality control goal for parts delivered but had an increase in scrap?
An MES allows a company to effectively acquire the real-time data needed to recognize when a defect or inefficiency occurs, causes variation and results in increased costs that become embedded in the process. It’s like a real-time audit of operations.
Ideally, an MES helps a manufacturer operate efficiently and allows some resources to be devoted to other priorities. Perhaps with the knowledge gained through the MES, the manufacturer can plan on ways to diversify offerings. This newfound efficiency allows operations to more easily accommodate scheduled maintenance, adapt to unexpected staffing issues and remain agile if a rush order arises.
The value of an MES is similar, in some ways, to preventive maintenance. Have you ever heard a manufacturing executive lament, “what we lost from the machine being down was more than the cost of the repairs,” or a machine shop floor manager imploring workers to “do whatever you have to do to get the equipment up and running?” An MES provides value as an ongoing service, helping manufacturers improve uptime, efficiency and quality.
An MES can help initiate a change from a legacy tribal leadership style to a data-driven culture. An MES can serve as a Quality Management System or a scheduling system. It has standalone value.
An MES collects data from many components, so it can feed data into an Enterprise Resource Planning (ERP) system. But the adage is true that software programs are only as good as the data they work with, and many manufacturers have struggled to leverage their ERP investment.
In many cases, SMMs are missing the comprehensive production data collected by an MES. With an MES providing production planning data and an ERP’s inventory and orders data, together these technologies can help SMMs respond more quickly to changes in demand and serve customers on a just-in-time basis – helping the manufacturer become leaner and more efficient. SMMs will also be able to more accurately forecast demand and avoid overproduction or underproduction.
Like any advanced manufacturing technology, there are common challenges to MES implementation and adoption. Manufacturers should be sure that the solution and provider are a good fit. For example, will the provider be able to upload all their historical data into the system?
Manufacturers also must be ready for such a change – from being able to map their value stream (a representation of all activities required to produce a product) to the work culture issues associated.
The systems and institutional knowledge that contribute greatly to success can make it difficult to implement new processes and behaviors. Small changes – such as using new reports rather than data spreadsheets – can slow adaptation. The depth and detailed visibility that data provides can shine a light on weaknesses within the organization, which can be interpreted as a threat by some employees.
Manufacturers will need to be data driven and have a continuous improvement mindset to meet growing demands amid shifts and disruptions in the supply chain. Lean manufacturing experts in the MEP National NetworkTM consider the entire organization and strive to embed lean philosophy and tools throughout the company. This holistic approach ensures that continuous improvement practices lead to more streamlined operations, reduced defects, shorter lead times and increased productivity.
With locations in all 50 states and Puerto Rico, your local MEP Center can help you assess your MES needs. Reach out today to schedule a consultation.