As manufacturing goes global, initiatives to standardize processes and key performance measurements across the enterprise to unite the greater supply chain are emerging. The main catalyst? Driving down costs in response to customer and market pressures. However, mid-size companies in particular are driving performance improvements with a more proactive, strategic vision for improving performance than reactively responding to cost pressure.
Manufacturing August 8, 2006
For Mid-Size Manufacturers the Issue is Visible
Market Segment As manufacturing goes global, initiatives to standardize processes and key performance measurements across the enterprise to unite the greater supply chain are emerging. The main catalyst? Driving down costs in response to customer and market pressures. However, mid-size companies in particular are driving performance improvements with a more proactive, strategic vision for improving performance than reactively responding to cost pressure. By closing the existing gap between plant and enterprise and leveraging Manufacturing Execution Systems (MES) solutions to provide transparency throughout the supply chain, mid-size manufacturers recognize that the total view of production is essential for manufacturing performance to improve.
Key Findings
Cost concerns continue to manifest and demand an attentive eye from manufacturers (Figure 1), but not all pressures appear to hinge on bottom-line reconciliation: mid-tier companies are also acknowledging enhancing equipment effectiveness and visibility as motivating factors for improving manufacturing performance. However, complexity arises as processes scale outside the four walls, and global standards and visibility are required to effectively govern overall performance. To add to this complexity, nearly 50% (not shown) of mid-size companies are faced with standardizing processes and systems across locations without unifying processes in place. In order to effectively scale a manufacturing program globally, all plants at all locations will all need to be enabled with a common platform and language to standardize processes. Seventy-one percent (not shown) of these mid-size manufacturers are following suit and responding with a Best in Class approach to establish a centralized data repository, and actively deliver real-time data powered by MES to decision-makers with KPIs standardized throughout the supply chain to breakdown the visibility barrier.
Click here to download the Announcement Global Manufacturing: MES and Beyond Benchmark Report For Mid-Size Manufacturers the Issue is Visible
Sector Insight Page 2 Figure 1: Factors Driving Company to Improve MFG Performance
36%Respond to pricing pressure (customers/competitors) 49% 59%
52%Decrease costs: do more w ith less 32% 48%30%Offset higher operating costs (e.g. energy, labor costs)· 21% 31%
16%Improve OEE (overall equipment effectiveness) 30%14%
Improve visibility into factories and plants (company- 21%ow ned) 26%14%
0% 10% 20% 30% 40% 50% 60% 70%
Small Mid-Size Large Source: AberdeenGroup, May 2006
The Transparent Factor The visibility barrier has been a longstanding issue. The Manufacturing Transparency Benchmark Report provided a deep dive view of the benefits of transparency, or the totalistic view into processes for delivering actionable data to decision-makers. The specific enabling solutions providing visibility included MES and manufacturing intelligence solutions (Mii) with adoption levels on the rise. MES is comprised of a relatively mature group of applications designed to manage production workflow from beginning to end, operation by operation. These applications generate work instructions for operators, ensure the right materials are available, and communicate operator and set-point instructions to factory systems. As specific tasks are performed, outputs and results are measured against parameters for quality, cycle time, and throughput. MES have evolved over time to become mission critical systems that maintain the bill of process, 'as built' bill of material, and full product genealogy. While suitable for many environments, MES delivers the largest dividends to those companies that build complex discrete products, process manufacturers that manage variable recipes/ batches, plants or mills in the paper or steel industry, and those that have mass customization or complex packaging requirements. Factories and plants fully utilizing MES typically have it well entrenched in the culture and rely on it to drive the flow of work and information. Alternatively, manufacturing intelligence solutions are relatively new entrants to the market, designed specifically to provide visibility into selected tasks and pieces of equipment rather than manage mission critical production processes. Web portals provide direc... [download for more]
