When Is the Right Time to Install Paperless Manufacturing?

Too often, the benefits and ROI of shop floor improvement projects are lost as projects are delayed or postponed.  Learn how to maximize your benefit and discover the best time to install your system.

By David Oeters, Corporate Communications with CIMx Software

Don't wait to install.  Maximize the benefit from your shop floor system.   Photo by www.colourbox.com

Don’t wait to install. Maximize the benefit from your shop floor system. Photo by http://www.colourbox.com

Many manufacturers see the advantages of MES and paperless manufacturing, but struggle with the final decision to implement the system.  The process becomes a waiting game, where the implementation team knows something needs to be done, but they delay waiting for the “right” time or some confirmation or signal (a planetary or astrology alignment, perhaps?).  Sometimes it’s a budget or resource concern (when will IT have time to help, or when will Procurement be ready to release the purchase order), but other times, it’s indecision or doubt that the operation is really ready… or maybe it is some mysterious omen everyone is waiting for?

This sounds silly, but the truth is while you wait, shop floor problems continue.  Profit is lost, quality is sacrificed and production struggles during this period.

Overcoming Indecision

The truth is, there is no “right” time (other than now) to begin a paperless manufacturing or MES project, but there are a few simple questions that will help determine if your shop is ready:

  • How much are the challenges facing your shop floor costing you?

It’s important to determine your potential ROI before installing a shop floor solution.  This helps focus your system on your greatest challenges.  Once you have an ROI, it is a simple matter to see how much money a delay in the project is costing you.  Consider this, the solution may be an investment, but the delay is an expense with absolutely no return.

  • What benefit will your customers get from your shop floor solution?

Rolling out a new shop floor system, with features such as real-time WIP (Work In Progress) dashboard and ECO management is added value and benefit to your customers.  No other shop floor solution delivers as much benefit to production as MES or Paperless manufacturing.  Take the opportunity to reconnect with your customers and introduce them to the shop floor and production improvements you’ve made.  Often the additional benefit will be the “sign” you’re looking for to initiate the project.

  • Can you maximize your benefit by understanding your business cycle?

According to the concept of cyclical investment in a business from International Trend Research Group (ITR), the right time to invest is during the down cycle in your business in order to maximize your capacity as business picks up.   This may seem counter-intuitive, but investment during the down cycle ensures your shop floor is positioned to maximize production during a business boom.

  • Can you use a phased implementation during installation?

A phased implementation allows you to select the features and capabilities the project focuses on, minimizing shop floor disruption and maximizing the ROI.  If you have a system that allows a phased implementation, there is little reason (other than budgetary and IT support) to delay the project.  Determine where you can achieve the biggest benefit and dive in.  Roll out new features when you are ready.

The Next Step

In a perfect world, once a manufacturer has made the decision to upgrade their production to a Paperless manufacturing system, the hard work is finished and the implementation will be a breeze.  Unfortunately, we don’t live in a perfect world, but you can maximize your shop floor benefit by taking control of the implementation and working strategically to ensure a smooth transition from a paper-based to a paperless operation.

Want to know more, or learn how paperless manufacturing can benefit your shop floor?  Leave us a message or give us a call, we’re happy to help.

How to Win With a Manufacturing Shop Floor Pilot Program

Conducting a Pilot Program for your MES or Paperless Manufacturing system won’t guarantee project success, but there are clear benefits for the savvy shop floor.

By David Oeters, Corporate Communications with CIMx Software

Ever talk to someone in the manufacturing industry about a software pilot program?  Unfortunately, I don’t know of a topic more likely to kill a conversation at a dinner party (… “So, how’s your pilot program going?  Pass the biscuits, please!)  If it does happen to come up, you will quickly discover something we’ve come to accept.

Understanding the reasons and potential benefits of your pilot program will help ensure a focused project.  Image by www.colourbox.com

Understanding the reasons and potential benefits of your pilot program will help ensure a focused project. Image by http://www.colourbox.com

We call it the Shop Floor Pilot Program Conundrum – a strange place where multiple realities merge.

Here’s what I mean.  The vendor might see the pilot program as an extended demo, or as an easy way to get their foot on the shop floor and another step in the software sale.  The manufacturing executive sees it as an inexpensive vendor service and low risk way to confirm product selection.  The shop floor sees it as a pain-in-the-butt project from corporate.  Savvy shop floors, however, see it as a way to kick the wheels of a new toy and proof the sky is falling, and shop floor errors can be fixed with the right tools.  IT might be wondering how much work this will mean for them.

Benefits of the Pilot Program

The conundrum in all this… they may all be right.  In the end, there’s no “wrong” way to view the pilot program, but conflicting ideas can lead to missed opportunities that negatively impact the final project.  So, in our quest to de-mystify the conundrum, here are a few things a shop floor pilot program could (potentially) definitely do for you:

  • Define an achievable requirement list.  Many MES projects suffer from “requirement bloat” as everyone in the company offers their opinion on what the system should do.  A good pilot program will splash some needed reality on the requirement list.  It will focus the project on achievable requirements that make a positive impact on the business.
  • Build shop floor acceptance for the program.  Giving the shop floor team, who will be working with the new system the most, the chance to work with the software is a great idea.  Once they see the software won’t lead to robots replace people, but will help them do their job better, faster, and with fewer errors, they’ll work hard to make the project a success.
  • Low risk first step before a much larger investment.  Spending a little money to install the software on one line is much cheaper than buying all the equipment to install it everywhere before you know how it works.  This way, you can identify challenges early and will have a better idea of final cost of the total project.
  • Build a stronger case for an ROI.  Before you install the software, an estimated ROI will be mostly conjecture.  With a pilot program, you will have real shop floor data you can attach to the estimate to prove the ROI.  Plus, nothing can build an advocate for the project than an executive seeing firsthand the benefits of the investment and how it will work.

There are benefits to a pilot program.  They can help define a project, prove the ROI, and minimize risk.  But, if you begin your pilot project with false expectations, you end up with confusion.  The vendor isn’t sure what they’re offering, the shop floor isn’t sure what they’re getting and the executives aren’t sure what they’re buying.  No one is happy.

Eliminate confusion, and make sure you understand what the pilot program can do for you.  Have you been part of a successful pilot program in the past?  If so, what made it a success?  What did you do to eliminate confusion?  Let us know, we’d love to hear from you!

6 Tips for Shop Floor Training That Works

For many, shop floor training means production downtime with no benefit, but it shouldn’t.  We offer a few simple tips to create a training program that delivers results.

 By David Oeters, Corporate Communications with CIMx Software

Make your shop floor training work for you and your team.  Image by www.colourbox.com

Make your shop floor training work for you and your team. Image by http://www.colourbox.com

I went to a training session not long ago for a new computer program.  It was held in the library of the local school.  I sat beside a poster of a cat falling off a tree with the words, “Hang in there!” written on the bottom.  I used a keyboard chained to the computer, and my knees bumped into dried gum under the desk.

“Now, I know you all are wondering if this training will work,” the moderator asked.

Damn right, I thought to myself.  First off, I don’t work anywhere near a poster of a cat, and I don’t use a keyboard I can’t move.  Next, the files I use are never just sitting on the desk top waiting for me to work on them.  Plus, if I’m already wondering if the training will work, then you haven’t done a good job of preparing the training!

Truth is, all too often training is thrown together at the last minute and no one is excited to be there.  It’s doomed to fail from the beginning.  With a little thought and planning you can deliver training that delivers measurable benefits to the shop floor, here’s six tips to get you started:

Shop Floor Manufacturing Training Tips That Work

  1. Give your shop floor access to training materials:

Context is important.  I’ll admit, sitting beside 4 copies of Charlotte’s Web and that kitten poster did not help me focus on ingesting digital files into an ERP.  In the same way, if you conduct training in a classroom or even as a webinar, are you giving the shop floor the right context for the training?  Training on the shop floor will always deliver a bigger benefit than training in other places.  Give them access to a library of training materials they can use when they need it most, not when it’s convenient to shove everyone in a classroom.

  1. Attach training to your work instructions:
Process Improvement graph.

Improve production results with visual work instruction and anchored instruction. Illustration by http://www.colourbox.com

Even better, you can offer training through your MES or paperless manufacturing system.  Attach training materials directly to the work instructions.  When the need for training comes up, users can go through the training as they work.  This is known as “Anchored Instruction,” or placing instruction in a meaningful, problem solving context.  Studies have shown knowledge and skills taught using Anchored Instruction are used quickly and more appropriately, with users developing expertise faster.

  1. Develop an accessible library of best practices:

The truth is, no book or instructor can deliver the real-world best practices of actual users, and all too often this knowledge is lost, becoming tribal knowledge totally dependent on the employee, not the organization.  A library of best practices will help capture this knowledge, ensure the information is not lost, and will become the basis of training that delivers real shop floor benefit.

  1. Utilize existing shop floor practices in the training:

Many times, it’s not the shop floor developing the training.  The instructor will develop “sample cases” to be used in the training, not actual work processes.  Even worse, the system users are being trained on doesn’t or can’t incorporate existing work processes.  This is especially true for template-based MES systems.

As much as possible, use existing work plans or operations for the training.  This will add context to the training and lend immediacy.  If you can’t use existing work operations or plans, then you may not have the right system installed.

  1. Ensure you have revision controlled work plans before conducting training:

Not long ago, I came across a shop floor using 4 different versions of a single work operation.  The operation was in 4 different plans, used by two different divisions, but it did the EXACT same work.  This became apparent during training, and led to a wasted day when work stopped and the confusion was sorted out.

This happens more than you might think.  Make sure your training is relevant by ensuring everyone is working from the same plans.  If you want to drive consistency and best practices on the shop floor, you need consistency in your work plans.

  1. Capitalize on visual work instructions:

At my training, I was given “supplementary materials” that would “enhance my work training.”  The supplementary material was simply a stapled packet of 8 pages going over the lessons.  There were no screenshots or pictures, just endless text.  A single screenshot showing me where the digital file went once ingested would have eliminated frustration and confusion.  Visual work instruction is an easy-to implement, but invaluable, tool for your shop floor.  For example, you can be sure you’re using the right part with a simple picture attached to the work instruction.

 

Drive consistency and increase production with shop floor training that works!  Illustration by www.colourbox.com

Drive consistency and increase production with shop floor training that works! Illustration by http://www.colourbox.com

I’ll be honest, my training that day was 8 hours.  I went back to the office and spent 5 hours trying to figure out how to ingest a digital photo.  It was 13+ hours of training for a 5 – 10 minute operation.  Since then, I haven’t used any of that training.  There was no context.  The world of the school library seemed distant from my work environment.

Training is necessary for any organization.  You need to onboard new employees, you need to build and develop critical skills and incorporate changes to processes and SOP (Standard Operating Procedures).  Rather than accept training as a necessary (and likely useless) task, turn it into an advantage for your shop floor.

How do you handle shop floor training?  What procedures have you implemented, and how are they working?  What could you do to quickly improve the results from your training procedures?  Let us know – we’d love to hear from you.

Exploring the Modules “Myth” in MES and Paperless Manufacturing

Many products out there offer “modules” for their MES or Paperless Manufacturing system, but the additional functionality often comes with potential problems for the customer.

By David Oeters, Corporate Communications with CIMx Software

Last week I bought a new bed.  Made of dark wood, very sleek and modern, it was to be the centerpiece of a remodeled bedroom.

Problems quickly became apparent as I assembled the bed.  Who knew it needed a $120 dollar brace to support the box spring?  My current mattress didn’t fit the modern design (even though the instructions insisted it did).  The headboard couldn’t be turned when assembled, so the bed would only fit along one wall in my room.

It was a beautiful bed in the store, but the individual pieces never fit quite right.  Many MES and paperless manufacturing projects using “modules” turn out like that – none of the pieces fit right.

Hidden dangers of MES Modules

Are you building problems into your modular MES?  Are you creating unnecessary complexity in your paperless manufacturing?  Photo by sxc.hu

Are you building problems into your modular MES? Are you creating unnecessary complexity in your paperless manufacturing? Photo by sxc.hu

Before you consider a system offering modules, ponder a few potential problems you may be building into your system:

  •          Module sticker shock

Many times, a vendor will demo a highly configured or customized version of their software for a potential customer, and then offer “modules” instead of a complete, fully integrated product.  This leads to a massive case of sticker shock when the installed system, pieced together from different modules, is nothing like the product featured in the demo.

  •          The module service-frenzy

Once you buy your modules, you need to have them installed and integrated.  This means you aren’t just purchasing the software, but the services necessary to put it all together in a usable package.  These costs add up.  Savvy vendors know that, so they offer a lower initial cost for the software and make up the difference in service charges.  It may seem like you are saving money purchasing “only” the functionality you need, but unless you are buying a complete system you are going to pay for additional service costs.

  •          Module genealogy

The truth is – it’s a dynamic MES and paperless manufacturing market.  Companies are often bought, sold, split or combined, and many times the module a company offers was purchased from another company.  Rather than building functionality organically, the vendor tries to cram a whole new product into their offering.  The module was never designed as part of the original product.  Integration will require custom coding and adaptation.  The modular product quickly becomes very complex, and the final product is never an optimized solution.

  •          The Franken-module

Integrating the software with existing systems is a key step in a successful installation, and a complex integration will add to the cost and risk of any project.  When considering a MES or paperless manufacturing system using modules, consider each module as a separate installation.  Each module must integrate not only with your existing systems, but with the other modules.  Modular software systems quickly become exponentially complex and expensive.  As you select modules for installation, consider how much integration and customization will be required to make it work.

  •          Module training day(s)

In a modular system, each piece must (somehow) work separately from the others.  It may require a separate login, or use a different User Interface or even a separate database.  This adds to the complexity of operating the system, and leads to additional training for the system and operational complexity.  Over the life of your software solution, those costs, which at first seem minor, can quickly add up.

Exposing the Module Myth

Choices and options.

Don’t be confused. Make sure the product you demo is the product installed on your shop floor. Illustration by http://www.colourbox.com.

There are vendors that offer MES modules like a “menu” of functionality.  They present it to potential customers as a “configured” system designed to meet their specific shop floor and enterprise needs.  But software doesn’t work like that.

If you purchase different software packages then cram it all together to create a modular product, that product is custom software.  Pull out a few pieces for an installation, that’s a piece of custom software.  This will lead to higher costs, more risks, and potentially more problems on your shop floor.  You end up with a confusing system of Rube Goldberg-ian complexity.

A lower cost, wholly integrated software package that allows you to turn on and off the functionality you want or need will install and configure more easily with a much lower total cost of ownership.  Plus, you won’t have to return the system when you realize it’s missing a few vital components.

Unraveling the Mystery of Dynamic Scheduling in Manufacturing

For any company looking to improve manufacturing production through dynamic scheduling, the first step is making sure you have the right tools in place to make it work.

By David Oeters, Corporate Communications with CIMx Software

A few years back, I bought a brand new Blu-Ray player.  When I opened up the package, I realized I needed a longer HDMI cable.  So, I bought one, then plugged in a movie… only to discover I needed an Internet connection.  The tiny instruction manual, filled with mysterious illustrations and illegible phrases, didn’t help.

I was annoyed enough to throw that Blu-Ray in the trash and pull out a Betamax tape (if I had one).  But, when I finally got the system working and watched the first movie… the work was worthwhile.

Unfortunately for many companies, implementing a dynamic scheduling system can be a lot like my experience with Blu-Ray.  Getting full benefit from the system will require having the right tools in place.

Understanding Dynamic Scheduling

With the right tools, dynamic scheduling will improve shop floor production.  Illustration by www.colourbox.com

With the right tools, dynamic scheduling will improve shop floor production. Illustration by http://www.colourbox.com

Dynamic scheduling systems will account for machine workload and set-up times, the daily workload, resources, incoming orders and priorities to schedule daily work to ensure optimal production. 

Most scheduling is reactive, with work being done in response to production needs.  As work comes in, the shop floor adjusts to complete it.  Dynamic scheduling is proactive, with the schedule being adjusted to maximize production.  A dynamic scheduling system should adjust production to minimize resource (machine breakdown, tool failures, QC issues) or job-related (rush jobs, cancellations, or ECO’s) issues and ensure optimal use of shop floor resources. 

But, dynamic scheduling isn’t enough to optimize production.  The system requires two important components to work effectively: Real-time information and shop floor process control.

Real Time Process Visibility and Control

Real time information is a necessary component of any dynamic scheduling system.  In some systems, information might be obtained from shop floor machines or a reporting system, but data obtained from these sources may not be real time, or may offer an incomplete picture of production, and the dynamic schedule produced from these sources will be flawed.  Shop floors often struggle to adjust to the inaccuracies.

In addition, the pace of change on the shop floor requires production react quickly to schedule changes.  The more time it takes to move resources to meet changing schedule needs, the less effective the system.  For some shop floors that lack process control, a dynamic scheduling system will actually hinder production as resources struggle to meet the scheduling needs, rather than completing work.

The Advantage of MES and Paperless Manufacturing

An MES or paperless manufacturing system delivers the necessary process control and visibility for dynamic scheduling to have a positive impact on production.  The MES will collect real time shop floor data that can be used to create a truly effective production schedule.  In addition, the system will allow instantaneous communication between the production team, ensuring vital information is where it needs to be when it is needed.

The MES acts as a conduit for the dynamic scheduling system.  Real time data is fed from the shop floor through the MES to the scheduling system.  Schedules are created, and then the MES efficiently manages information on the shop floor to deliver process control necessary to maximize the benefit of dynamic scheduling.

It’s an efficient, closed loop information system that works and will benefit production in a nice, neat package… unlike the instruction manual that came with my Blu-Ray.

Discover the Truth of MES Implementations

We offer a few simple tips that can help you discover the truth in the “implementation” claims in the MES and Paperless Manufacturing Market.

By David Oeters, Corporate Communications with CIMx Software

Deciphering the truth in vendor claims about MES and Paperless Manufacturing implementations can be a challenge, unless you're armed with the right questions to ask. Illustration by www.colourbox.com

Deciphering the truth in vendor claims about MES and Paperless Manufacturing implementations can be a challenge, unless you’re armed with the right questions to ask. Illustration by http://www.colourbox.com

Have you ever tried to implement desert-time with a clever and determined five-year old and his sweet-tooth?  The other day, I was wrapping up dinner at a friend’s house.  His son wanted dessert – a cookie.  I told him to pick out a “small-one,” and he came back with an entire plate full of broken cookies and a mouth already covered in crumbs.  “What happened to picking out a small one?” I asked.

“These are all small,” he argued.  “I just cracked them, see?”

Making sense of “implementation” claims from MES vendors can be a lot like managing a five-year old at dessert time.

The other day, I came across a news release from an MES vendor that celebrated a “rapid deployment” and implementation of the software in just under six months. This was the result of the “… robust, out-of-the box solution.”  My first thought was six months feels like a LONG time to deploy a true out-of-the-box solution (unless you keep the solution in a really confusing box).  Then I wondered at how long other implementations might be for these customers?  If six months is a “rapid” deployment, then what time frame are we talking about for a long deployment?  Years?

It reminded me of the difference in definitions of “a small one” when it came time for dessert with a five-year old.

Making Sense of MES and Paperless Manufacturing Installations

I’m not trying to single out systems, vendors or claims.  The truth is, there are many definitions for deployment and implementation, and every shop floor and enterprise is different.  In this industry, it is difficult to judge an industry claim due to variations in our definition of “implementation” or even when a project is complete.  This is why it’s important not to take “deployment” claims at face value, and to ask a few key questions before anyone heads to the cookie jar, including:

Not asking the right questions when researching MES can lead to project problems. Illustration by www.colourbox.com

Not asking the right questions when researching MES can lead to project problems. Illustration by http://www.colourbox.com

  • How much customization (or configuration) will the project require?  Many vendors claim to have an “out-of-the-box” solution when all they have is a box of tools that require “configuration” to install and fit your needs. The larger the customization the higher the potential total cost of ownership and the longer implementation schedule.
  • Is there a method and technology to integrate the software with other systems?  Too often, the software is installed quickly, but the service costs creep up during phase 2 as custom work is done to integrate it with the ERP or other enterprise systems.
  • What is the average service cost for installing the software?  There are vendors out there who will sell software at a lower cost, with the intent to make up the difference in service charges during and after the implementation.  Having a clear idea of service costs will help determine a true price for the installation.  An out-of-the-box solution, by definition, must have lower service costs than license cost.
  • Will the initial implementation offer full system functionality?  Some vendors offer systems as a series of “modules” that are cobbled together like Frankenstein.  Each piece of Frankenstein may work individually, but the whole system will need additional work to meet your shop floor needs.  A group of boxes stacked together is not an out-of-the-box solution.
  • How will your existing work plans be entered into the system?  Many systems, especially template-based systems, can’t use your existing work plans.  Once the software is installed, you’ll face the massive task of getting all that data into the system in a strange format you need to learn and may have difficulty supporting.
  • How much training is required?  Systems that are too complex or won’t meet the shop floor need might be installed quickly, and then end up as shelfware.  Complexity rarely translates to productivity or efficiency.
  • How much shop floor disruption will the installation and training cause?  Six months may seem like a “rapid deployment,” but production lines down during installation will impact your ROI.

The truth is, you shouldn’t make a decision based on claims.  Minimize risk and cost by asking a few simple questions before signing a contract.

Get the facts and find a software provider you can trust, or you might be left with a plate full of broken cookies instead of the shop floor system you expected.

Insider Tips on Calculating ROI for Your Shop Floor

CIMx Software offers simple tips that take the fear out of calculating ROI for your next paperless manufacturing or shop floor software solution project.

By David Oeters, Corporate Communications with CIMx Software

Calculating ROI for your next paperless manufacturing or MES project is easy with our insider tips.  Illustration by www.colourbox.com

Calculating ROI for your next paperless manufacturing or MES project is easy with our insider tips. Illustration by http://www.colourbox.com

Calculating ROI is a dreaded task for many shop floor solution and paperless manufacturing committees.  The final ROI estimate is an uncomfortable marriage of budget, estimate, faith, conjecture, arcane formula, and (sometimes) chicanery – among other things.

We all know it, which is why many committees are stymied when it comes time to create and present an ROI.  For most companies, there is no right or wrong answer, and most times there is no “auto-calculate.”  The final result comes down to a “reasonable” guess based on a mix of fact and estimate, which leads many to question how to even begin the process.   

Never fear, we’ve collected tips, thoughts and ideas on how to get started with a common-sense ROI that will win over the most critical judge.

Calculating the cost of a Paper-based Shop Floor

Start your calculation by looking at your present shop floor.  Consider it a baseline for your calculation.  In every paper-based production shop we’ve encountered, the following is true:

  1. There are employees involved in preparation, distribution and then collection work instructions, work orders, travelers and quality data collection forms.  Many times, these employees are better used in important production tasks;
  2. Change is a way of life on the shop floor. ECOs (Engineering Change Orders) happen, and are approved and distributed – sometimes long after production is complete.  ECO’s distributed after production often require rework or scrap;
  3. Poor instructions, missing information, and misunderstanding about work to be done result in costly errors;
  4. Audits by regulators or customers to certify quality processes in a paper environment takes (significant) time and resources away from production.   Missing information, misplaced records, and data collection errors results in inadequate and costly audit results;
  5. Record keeping – the shuffling, organization, and storage of paper records – is labor-intensive especially in a shop that is growing and expanding.
Where are you leading your shop floor?  Illustration by www.colourbox.com

Where are you leading your shop floor? Illustration by http://www.colourbox.com

All of these activities take time, resources and money.  Often, these costs increase in direct proportion to increased production.  None of them directly impact or improve production.  These activities, and many others like them, are costly.  For each issue you identify, calculate or estimate a cost.  Even if the actual cost is not known, you can begin with an estimation.  For example, if 5 employees were involved in collecting data for an audit, then determine the cost in manpower for the audit.  Look at the effort and cost of record keeping, and begin assigning costs (including paper storage, manpower, and mistakes).

 Estimate the Savings of the Solution

The items and issues above are directly addressed (in various ways) by a paperless manufacturing solution.  Most times, a company researching a paperless manufacturing solution will have one or two key issues as the focus of their search.  They seek a simple, low-cost, low-risk solution to eliminate a problem, save time and money, and gain better control and visibility of production.

Don't let fear hold your shop floor back.  Photo by www.colourbox.com

Don’t let fear hold your shop floor back. Photo by http://www.colourbox.com

When calculating an ROI for a potential paperless manufacturing solution, look at the issues the system solves.  For example, does the solution offer:

  • A technology proven to eliminate the need for paper work flow, and the cost and errors that occur using paper.

If the solution eliminates the need for paper, then add the savings you gain from eliminating paper distribution, and the errors you incur from using paper on the shop floor.

  • Creation of automatic as-built and a digital record of production.

A solution that offers automatic record-keeping will eliminate the cost, frustration and errors of record-keeping.  This should also eliminate the cost (in both time and work) and stress associated with audits and assembly of production records for customer services.  Add these savings to your ROI.

  • Improved digital work instructions, work orders, and shop floor data collection.

Digital work instructions and shop floor control and visibility are the heart of paperless manufacturing.  Look at the improvements the system will make to work orders, and determine the mistakes, error and quality escapes that will be eliminated.  Calculate the cost in scrap and rework to the ROI.  Also, digital work instructions should significantly improve production overall.  Add this savings to the ROI. 

  • Change management and shop floor visibility.

Look at the costs incurred by change management, including scrap and rework.  Look at the cost of job tracking.  A system that successfully manages change and offers real time visibility will save on these costs.

Once you’ve matched the solutions provided by the system to the expenses you’ve identified in the previous step, you’ve begun assembling your ROI.

Other Considerations
Take the confusion out of building an ROI estimate with these insider tips. Illustration by www.colourbox.com

Take the confusion out of building an ROI estimate with these insider tips. Illustration by http://www.colourbox.com

There is more to be considered when calculating ROI.  Look at the costs and expenses that you may incur with the new system.  Beyond the base cost, maintenance and any license fees, consider other potential high cost features of the system, such as:

  • Can the solution be easily installed?  Look for systems that can be installed in phases.  This will minimize the installation time, risk, and the disruption and changes to production.
  • Does the solution offer simple options for integration into other systems to share data or files?
  • Does the solution use non-proprietary hardware and software?  This will allow self-support if desired, and minimize service charges.
  • What is the cost of upgrades to the software?  Free lifetime upgrades allow the shop floor to take advantage of new technology and avoid obsolescence.

Study the system for other potential costs, and consider these as you calculate the ROI.

Summary

With most paperless manufacturing research projects, as the solution is uncovered and the features and the functionality are revealed, there is a flush of excitement.  But, as the work of calculating and creating an ROI begins, the excitement fades.  But it shouldn’t be that way.

Creating an ROI should be a simple matter of identifying issues on the shop floor, calculating the cost of the issue, and assigning a savings to the solution.

Want to learn more, or see how we can help your shop floor create an ROI for a shop floor solution, let us know!  We’re happy to help.