Getting a payback of ten times the cost of a project, three years after deployment, seems almost too good to be true. Yet that’s the claim made by users of Manufacturing Enterprise Solutions (MES), according to some recent studies conducted by Boston-based AMR Research.
At last month’s Manufacturing Enterprise Solutions Association (MESA) 2003 Conference, held in a suburb of Chicago, Bill Swanton, vice president of research for AMR, talked about the value of MES in today’s manufacturing environment. Short-term paybacks for MES projects result from hard returns on investment, such as reduced inventory, rework and cycle times. Three times benefit/cost paybacks occur one to three years after deployment, with faster time-to-market, better traceability and improved flow manufacturing. And, post-three year results of ten times benefits are due to collaboration and supply chain visibility, according to Swanton.
With paybacks this good, why isn’t every manufacturer flocking to the MES fold? Why do some companies get great results, yet others flounder trying to apply the very same products? Answering these questions requires an understanding of what MES is, where it’s been and where it’s going in the future.
For the past dozen years or so, the term “MES” has been applied to a class of software products that link manufacturing plant-floor systems with business and logistics systems to improve enterprise-wide decision-making. It provides a range of functionality, from inventory management and quality control to supply execution. MES solutions determine what data to move from plant-floor to top-floor, why it should be moved, and how to automate that process.
This is no trivial task. Dennis Brandl, industry expert, founder of BR&L Consulting and a speaker at the conference, cites his experiences at Shell Oil Co. “In about two weeks time, Shell would generate a terabyte of manufacturing data. Of that, we exchanged just several hundred kilobytes of data with our business systems.” Determining what tiny percentage of data is critical to the enterprise is an important aspect of MES—and crucial to a successful project.
AMR’s Swanton notes, “If you’re simply automating the same processes that you previously performed manually, then you won’t get any benefits from MES.” Successful projects require an optimization of business processes before automating data exchange.
Most MES implementations have been concentrated in a few vertical industries—aerospace, electronics and, more recently, the life sciences. The MES vendors serving these industries have struggled to reach sales revenues that exceed $40 million.
Recently, some of the traditional automation suppliers, such as GE Fanuc and Rockwell Automation, have purchased smaller MES suppliers and merged their products into larger solutions’ portfolios. These acquisitions could translate into benefits for potential MES users, says Kevin Roach, vice president of global solutions business at GE Fanuc. Large suppliers offer global service and support capabilities, he notes, and can broaden the vertical markets served by MES.
Where is MES going? Comments made by Greg Gorbach, an analyst with ARC Advisory Group, suggest that MES is on the cusp of a major technological breakthrough based on the Internet and Web Services. “The technology sonic boom that is the Internet is changing the game. The more significant the technical advance, the less well understood is its impact.”
Clearly, the analysts at the MESA Conference would have us believe that MES is poised for massive deployment across a variety of industries. To gain its benefits, Julie Fraser, principal with Industry Directions, recommends getting intimate with your company’s financial statement and implementing MES solutions that address financial “pain points.”
Notes Fraser, if you’re working at a company that manufactures products, you’re ahead of the curve. Someone at the top of your organization still places a value on manufacturing. “Take advantage of that to implement solutions that speak to managements’ bottom-line concerns.”
