Deliver ROI through the Production Process with an Effective MES
By Jeff Miller and Brian Briggs
Avid Solutions, Inc
Operations leaders continue to be frustrated by challenges related to departmental collaboration, supply and demand chain coordination, and disparate systems and data sources. Manufacturing execution systems (MES) address these challenges by bridging the world of corporate IT to the near real-time world of automated operational technologies. Still, operations leaders often struggle to make a compelling ROI justification for the MES improvements their manufacturing facilities urgently require. This paper provides a business overview of how MES offers greater visibility into the production process, which in turn leads to improved operational efficiencies and ultimately, a stronger bottom line
In our experience working with manufacturing teams, operations leaders continue to struggle with disparate systems and data sources that limit collaboration between departments and make it difficult to coordinate across supply and demand chains . A recent study by LNS Research reinforced these findings. Operational efficiency, product quality, and the company’s profits suffer as a result. Though these problems are obvious to those involved in the day-to-day operations of the plant, it can be difficult to identify and articulate the ROI justifications required to gain approval for muchneeded system improvements.
A modern manufacturing execution system (MES) provides a functional layer of information technology that links business planning and shop floor control systems to provide manufacturing with an achievable and realistic production plan. Specifically, an MES connects data systems to facilitate near real-time coordination across supply and demand chains and better collaboration across departments. As a result, companies that implement a shop floor MES gain greater visibility into all operations throughout the production process. In this paper, we’ll examine a number of MES components in the context of plant operations and explore the potential ROI from implementing an MES.
MES Components Discussed in this Article:
- Production Planning Material
- Management Scrap Tracking
- Geneology Tracking
- WIP Material Tracking
Optimize Production Planning
Many companies continue to have limited visibility into the operational details at different plants at different times, which severely limits their ability to maximize plant output. But by implementing an MES, they can streamline many aspects of production planning. For example, consider a company that uses a centralized enterprise resource planning (ERP) system to take customer orders, but doesn’t use an MES in its plants.
When the company receives a product order, it goes into the automated ERP system, but the ERP doesn’t provide comprehensive data about each plant’s current availability. Instead, someone from the corporate office has to look into this on a case-by-case basis. Once the order has been transferred to the appropriate plant’s production system, the plant supervisor must determine how and when to work it into the schedule. Without an MES, it’s difficult for supervisors to maintain an accurate picture of what’s being produced and on which line at any given time. So, scheduling each new order becomes a challenge.
An MES automated work order system addresses these challenges by eliminating the duplicate work of creating work orders on both the ERP and production systems. In the process, it reduces the opportunity for human error, such as keying in an incorrect work order number. It also allows plant operators to modify and share the schedule in near real-time, which reduces the need for in-person communication and frees both corporate and plant employees up to do more value-added tasks. Automated work orders support better coordination across multiple locations by making it easier to roll out new schedule methodologies, while also minimizing the amount of retraining or coordination that’s required at the line level.
Automated work order systems also enable more efficient shop floor communication. Typically, the production schedule is created first thing in the morning and then revised manually throughout the day. By the time you’re on your third or fourth revision, it’s nearly impossible to be sure everyone has the same information. If one line is looking at version C of the printed schedule, but another has already received version D, inefficiencies are unavoidable. For instance, materials may end up in the wrong place, an unexpected repair may delay a priority order, or an open line may be idle longer than necessary.
On the other hand, with an MES a supervisor can get a clear picture of the plant’s current capabilities—including time or resource requirements and available lines. He can look at a week’s worth of orders in the ERP system and then set work order priorities in the MES accordingly. An operator can then go into the system, review the orders and priorities, and get to work. As an added benefit, automated work order systems increase accountability for both supervisors and operators. By allowing for efficient investigations into incidents, they minimize the amount of time spent interviewing personnel regarding what actions they did or did not take.
The Manufacturing Enterprise Solutions Association (MESA) has defined a number of key performance indicators (KPIs) and expected improvement ranges that are useful in determining the effectiveness of MES implementations. You can evaluate automated work orders and multiple location coordination in terms of how successful a plant was in meeting the deadline for a scheduled order. According to MESA, an MES typically generates a 3.5% improvement in the adherence to schedule KPI. Improved shop floor communication can be evaluated in terms of process variability, a measure of how repeatable a process is. On average, you can expect a 5-10% reduction in process variability after implementing an MES.
Expect a 5 – 10% reduction in process variability with an MES.
An effective MES allows you to get a clear picture of the plant’s current capabilities.
Refine Material Management
Material management ERPs are transaction-based and don’t sit on the production floor, but an MES can provide insight into the execution layer. You can use an MES to track raw materials receiving both by verifying quantity delivered against quantity ordered and by validating quantity on hand. An MES also supports raw materials testing, including quality testing to ensure that the available materials are suitable for the production line.
In addition, an MES can provide product definition by location. Typically, ERP systems generate a material master that includes item ID, description, and amount. An MES can use this information to control different labelling information for each plant, control item attributes at a local level, and generate local batch numbers that make it easier to organize both materials and finished goods. Similarly, an MES simplifies centralized product definition. For example, a company with 10 plants that doesn’t use an MES likely maintains 10 stand-alone labelling systems that must be updated manually. But with an MES, plant supervisors can interface with the company’s ERP system to update the data once and then push the information out to all plants simultaneously. This kind of accuracy and timeliness is particularly valuable when it comes to product recalls.
- Stand Alone Control Room System
- New MES Enabled Control Room
Use your MES to track WIP or internal ingredients to allow for better asset utilization
Inventory synchronization with ERP also plays a critical role in recall situations by enabling you to link raw material usage to specific batches and locations. For instance, if your production process requires consumption of the same material in multiple places, you can stage each inventory usage location and batch in your ERP system. The ERP can then communicate this information to the MES. If one batch later fails quality testing, you can easily determine where it was used and limit the quantity of recalled product to that specific batch.
Likewise, you can use an MES to track WIP or internal ingredients. This allows for better asset utilization by letting you know what material is available, when it is ready to use, and where your focus needs to be in creating these items.
The relevant MESA KPI for raw materials and product definition is materials per standard unit, which measures how much of each ingredient was necessary to create a standard unit of finished good. With an MES, you can expect to decrease materials per standard unit by 7.5% or more. The inventory synchronization MES component is best evaluated in terms of on-hand raw, work in progress (WIP), and finished goods inventory. An MES typically reduces inventory by 10-20%.
Track Material Movement
An MES plays a critical role in both the consumption and production aspects of material movement through a plant. By providing accurate consumption records, it allows you to tie the amount of material produced over a given time period to the relevant production processes. You can also combine hand-metered consumption and automatically generated data from instruments to develop a more accurate picture of your material movements. You can expect a 2-3% decrease in consumption and production and at least a 7.5% decrease in materials per standard unit after implementing an MES.
As stated previously, using your material movement data (genealogy), you can limit the scope of a recall to the affected finished products, instead of determining an arbitrary time window and withdrawing all product created during that period. This not only saves your company money, but it also increases consumer and regulator confidence. Because you can quickly produce accurate information to establish all possible paths that unacceptable raw materials and finished goods may have taken, you can demonstrate that nothing is ending up on the shelf when it shouldn’t.
Scrap and waste tracking is another important MES component that can be used when calculating yield and efficiency. With an MES you can expect to reduce losses by 3-10%.
After implementing an MES you can expect a 2-3% decrease in consumption and production and a 7.5% decrease in materials per standard unit.
Manufacturing execution systems promise to bring outdated facilities into the 21st century world of digital manufacturing. They offer a number of benefits, ranging from improved product quality and operational efficiency to reduced waste and inventory. Implementation requires experts with domain knowledge of both manufacturing automation and business systems to fully maximize the out-of-the-box features typically found in vendor products. It also requires deep understanding of your company’s specific problems and the ability to design a flexible, custom MES that can evolve with your company’s changing needs.
To be truly successful, an MES implementation also has to act as a change agent that leads to new, data-driven practices across your company. In the same way that a glass of water won’t quench your thirst until you drink it, simply collecting data has no intrinsic value. In other words, when companies fail to realize ROI on their MES investment, it’s typically due to the way the data was handled. By working with a solutions provider with intimate process knowledge across a range of industries, you gain not only MES expertise, but insight into the best practices that will help your company jumpstart a shift to data-driven operations.
To learn more about the ROI your business can expect from
implementing an MES, contact a member of Avid’s Information
Solutions team at 1-888-771-1774.
About Avid Solutions
Avid Solutions is a fast-growing system integrator specializing in industrial automation and information solutions. We collaborate with clients to identify and select best-in-class platforms, and design and implement comprehensive information systems. Our company has developed exceptional depth in PLC, HMI, DCS, and information applications such as tiered historian, advanced data analysis, manufacturing execution systems, and industrial networking in the following process industries: chemical, food and beverage, life sciences, power generation, and pulp and paper. Avid Solutions can provide turnkey solutions from the plant floor to the corporate office.
Vendor-neutral and flexible, at Avid Solutions we pride ourselves on maintaining long-standing customer relationships that are built on technical acumen, two-way communication, and mutual trust. With over 100 employees and office locations in Winston-Salem, Raleigh, Atlanta, and São Paulo, Brazil, Avid Solutions has provided industrial automation and information solutions across the U.S. and globally for almost 30 years.