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6 Tips for Forecasting an ROI for MES

Assessing the potential ROI for an MES is difficult, but you can improve results by recognizing risk factors that will negatively impact the overall return.

By David Oeters, Corporate Communications with CIMx Software

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Identify ROI risk to more accurately your return for an MES. Illustration by http://www.colourbox.com

Forecasting the ROI for an MES is a critical step for any company investigating manufacturing software. While identifying a nice, round number that will make the accountants feel good is the ultimate goal, its exceedingly difficult before the MES has been implemented. An MES potentially impacts all areas of the manufacturing value chain, and with so many factors any estimate becomes more conjecture than science.

A much easier, and many times more fruitful, exercise is to identify potential ROI detractors of an MES. Once you identify potential detractors (if there are any) you can better see how difficult it will be to reach your ROI goals. A project with many detractors will take much longer to reach an ROI than one without detractors.

MES Risk Factors

Here are 6 common risk factors we see in an MES project:

  1. Cost. The cost of the system is the biggest risk factor. How much are you going to pay? Consider more than the license fees – look at the service charges, the cost of integrations, consulting fees, hardware costs, and more. Many times, these added costs are significantly more than the initial fees.
  2. Customization. When it comes to any software system, the more changes or custom code you place on top of the initial software, the more expensive and risky the installation will be – decreasing the eventual return.
  3. Schedule. Once you decide to purchase a software system, the longer it takes to set-up, install, and start using the MES, the more difficult it is to achieve an ROI. Every week you wait is costing money.
  4. Flexibility. Software shouldn’t reflect the manufacturing needs at a single moment in time, because those needs will change. How quickly and easily will the system adapt? Do you need to go back to the supplier for each change, or can your team make the changes?
  5. Upgrades. New technology and market changes are impacting manufacturing at an increasing rate. Is there an upgrade path and plan? What is the cost for an upgrade? Software without a clear, and efficient, upgrade path will become inefficient as it ages.

Anyone that promises you an inclusive and comprehensive ROI for an MES is either lying or delusional. The cost of misunderstandings between the supplier and customer leads to upscoping and slipped schedules, increasing implementation service fees and frustration – ROI project-killers.  Estimates, forecasts and guarantees should be the goal before an implementation, which is why risk factors such as these are so important. Each risk factor will significantly increase the time necessary to reach an ROI. Eliminating risk factors without loss of functionality will ensure a rapid ROI on the system.

Want to learn more, or receive a free shop floor analysis to see how an MES can benefit your company? Then contact CIMx today to learn more about paperless manufacturing. We’re always happy to help.

Don't let limits in your software hold you back from optimizing the shop floor. Illustration by www.colourbox.com

Why Do MES Implementations Fail, and What You Can Do

An MES Implementation can be a high-risk project, but there are steps you can take to minimize risk and improve success.

By David Oeters, Corporate Communications with CIMx Software

Companies may not talk about it, but there are MES and manufacturing software implementations that fail. There is risk with any major software implementation. ERP and PLM implementations will sometimes fail (even more than MES), and while there is no magic formula for implementation success, you’re not helpless against trouble.  There’s no magic 12-step process for every project, but there are warning signs savvy manufacturers can use to avoid trouble, and steps you can take to help protect your company.

5 Reasons MES Implementations Fail

Implementation projects fail for a number of reasons, including:

  • Culture: An MES implementation is as much a cultural project as a technological one. If the software wasn’t selected with the shop floor’s needs in mind, or the project goal isn’t clear from the beginning, failure is likely. Operators need to use the software for the project to be a success. A smart platform can be introduced in stages that operators readily accept, eliminating the resistance and culture shock common in “Big Bang” implementations that try to implement every piece of functionality at once.
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    Don’t get buried by the cost of your overly complex MES. Illustration by http://www.colourbox.com

    Expense: As project complexity increases, costs skyrocket. Changing requirements also lead to massive cost overruns. Annoying and unforeseen delays and service charges from the software supplier can also derail a project. At some point, most companies will cancel the implementation rather than continuing to bleed expenses.

  • Out-of-Scope System Work: Many companies try to sell “master” systems fulfilling a number of functions. An ERP is not an MES or PLM. Inevitably an integrated, single source solution causes more problems than it solves since it results in a lowest common denominator solution, as the supplier tries to cram functionality into their system. Many times, it leads to a system that is difficult to use.
  • Customization: Many companies initially believe custom software is the only solution for their shop floor. The truth is few companies have the resources for the initial development, or the capability necessary to maintain the system as production needs change.  Building that perfect system will take a long time, and you need to accept high risk and frustration. It’s better to use a supplier that offers custom features on a smart platform that can be implemented at a low cost and ensure a sustainable system.
  • Supplier Promises: Some suppliers make exorbitant promises during the sales process promises that are extremely difficult to fulfill. As the list of broken promises and scope modifications grow, some companies decide to cancel the project out of frustration. There are ways to limit scope creep, limit cost add-ons and manage in-house modification flow.

This is not a comprehensive list, but it does touch on many of the core reasons a manufacturer will choose to cancel a project.  Canceling a project is a passive, but final, failure, and is many times the best decision for the long-term growth of the business.

A worse failure is an “active failure” where the project is implemented and does not achieve the improvements expected nor provides a positive ROI.  Companies with an active failure continue to lose money year after year, clinging to a software system that bleeds profit and productivity with minimal, if any, benefit.

Protecting Yourself from Implementation Failure

Never fear, there are steps you can take to position your company for success when implementing a new MES or digital manufacturing system. Consider this:

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    Don’t let fear stop you from improving production. Illustration by http://www.colourbox.com

    Phased Implementation: Rather than trying to install and implement everything at once ( “Big Bang” style), a phased implementation gives the manufacturer more control over the project. Risk can be minimized by selecting and using the features and functionality the company wants, dictating the pace of change and complexity.

  • Aligning IT and OT: An MES is as much an OT (Operations Technology) project as IT (Information Technology). A project has a much greater chance of success if IT and OT are aligned from the beginning, selecting a project that meets the needs of both core users.
  • Trust: Many times an MES buyer will make a software decision based on grandiose promises from a supplier, rather than embracing their intuition and finding a partner company they trust.
  • Focus on Core Requirements: Many MES projects start with an initial need, and then additional requirements are added to the project. Each addition increases the schedule, cost and risk. Focus on solving the real problems in Phase 1, and the savings can pay for additional items in phase 2. A supplier that cannot provide a phased implementation has a solution without the necessary flexibility to be sustainable in your environment.

Managing Software Projects

For most failed software projects, it’s impossible to identify a single reason for the failure. It’s a combination that leads to the painful decision to accept failure rather than continuing to work with an active failure that will limit your profitability far into the future. Most times, this is the right decision to make. Trying to twist and contort the shop floor or the software just to make it work isn’t a good way to optimize production.

No one likes to admit or accept failure. It leaves a bitter taste in your mouth and can be devastating to a business. By following a few simple tips and staying on top of your project, you can avoid the problems that lead to failure.

Want to learn more, or see why and how CIMx guarantees major project milestones? Contact us today for a shop floor analysis or project estimate to see how we can best help you.

How many modules will it take to get the functionality you need? Illustration by www.colourbox.com

What is Paperless Manufacturing?

Many companies ask us about paperless manufacturing and how it fits with other systems. Here’s our response.

By David Oeters, Corporate Communications with CIMx Software

When discussing manufacturing software, there is no end to the acronyms that can be applied to the products on the market – MES, QMS, ERP, PLM, MRP, and on and on…

One question we often get is about paperless manufacturing – how does it fit into the confusing gamut of shop floor software systems? The answer requires a little insight into CIMx’s history.

Back to CIMx’s Manufacturing Roots

MES and the Human Element

Removing paper from the shop floor will significantly improve production. Illustration from http://www.colourbox.com

More than 20 years ago, CIMx introduced an industry-leading Computer-Aided Process Planning (CAPP) system, offering revision-controlled shop floor packets delivered digitally.

Even the earliest versions of CAPP offered substantial benefits to companies still struggling with paper. With this very first product, CIMx helped introduce paperless manufacturing to production and operation environments. This planning solution introduced a new generation of computer and software technology to manufacturers.

Paperless Manufacturing Today

CIMx has remained at the forefront of software solutions for manufacturing, introducing a range of products suitable to manufacturers of all sizes and a variety of industries; including Advanced Process Planning, a Data Migration Engine, a robust MES (Manufacturing Execution System) and MOM (Manufacturing Operations Management) solutions, up to a fully-integrated Enterprise Manufacturing solution.

The foundation of every one of these products is paperless manufacturing. Paperless manufacturing is what we do.

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Paperless manufacturing is the foundation of the modern shop floor. Illustration by http://www.colourbox.com

As products and manufacturing processes increase in complexity, paper is ill-suited to manage the shop floor. Paper is inefficient, creates errors and problems, and doesn’t allow for the advanced analytics and real-time visibility and control a modern shop floor needs.

Paperless manufacturing removes paper, and the errors and problems it causes, off the shop floor. Information is converted to electronic data to be transmitted digitally. Your documents are locked with revision-control, ensuring everyone is using the latest, most accurate information. All processes are automatically tracked in the system. You can begin running real-time analytics on your data.

Paperless manufacturing provides the foundation for digital manufacturing and those acronym-laden software systems competing for your shop floor. It’s getting your critical information off paper and giving you access to information when and where you need it. Paperless manufacturing is one, perhaps the only, way to control and optimize your quality, efficiency and profitability over time.

CIMx offers a variety of software products for manufacturers, including MES and MOM systems, but each starts as paperless manufacturing – converting error-prone processes to an electronic system and giving you better control and visibility of the shop floor.

In our view, before you start considering a more advanced or specialized software system, move to paperless manufacturing. Running analytics on paper-based production or tracking quality from a spreadsheet on the shop floor isn’t maximizing production; it’s just perpetuating problems and passing along inefficiency.

If you want to learn more about paperless manufacturing with CIMx, and see how far you can improve, then contact us today. We’re always happy to help.

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How to Start an MES Project without a Budget

Companies without a specific budget for paperless manufacturing end up living with shop floor inefficiencies for no reason. There are steps you can take even without a budget for a project.

By David Oeters, Corporate Communications with CIMx Software

There are shop floors still resisting digital manufacturing. They struggle with massive, inefficient bundles of confusing paper work instructions that no one ever reads and may not even be correct.  They labor under shop floor blindness – never knowing when or if a project will be completed.  Quality escapes are commonplace, and without strong analytics or real time quality checks, coming up with a solution is like throwing darts blindfolded.

In every case, some know things have to change. As the pace of manufacturing increases and customers demand more, the problems will only be magnified. At some point the profit eating problems must be solved or the company may disappear.

Problem is – these shop floors don’t have a budget, and so they wait and hope things get better.

Waiting Until Next Year Isn’t a Solution

Just because you don’t have a budget (yet), doesn’t mean you shouldn’t start work on a project. There are steps you can take that don’t require a budget, and some important tasks you can (and should) start before looking at budget. It may be a project can succeed even without a formal budget; just the dedication of a few individuals.

Process Improvement graph.

A successful MES project doesn’t start with a budget. Illustration by http://www.colourbox.com

For example:

  • Start building your team.

No one person can manage an MES or paperless manufacturing project alone. If there are problems with production hurting the bottom line, there will be others interested in finding a solution. Begin building a team. Bringing others into the project will not only help in finding a better solution, it will also help build consensus and support for the project. You and everyone else may be busy so how do you find the time to squeeze in a “skunkworks” project? Talk about it during breaks or during lunch. Develop a group of passionate believers in improving your company; it may save their jobs someday.

  • Evaluate your internal processes.

Before you buy a solution, any solution, you need to have a strong idea what shape the project will take. That starts with a thorough evaluation of your internal processes. What IT infrastructure do you have? How does an order go from sales to the shop floor? How are you currently tracking orders? What is the change order process? Are you proactively or reactively managing quality on the shop floor? How fast is the company growing? How fast can it grow? What production processes, if improved, will add to growth?  Consider this setting the baseline for your solution search, and it should uncover opportunities for a digital solution to add to your bottom line.

  • Identify your key requirements.

It’s time to turn those opportunities into requirements.  What are the key problems holding back the shop floor? Is it paper work instructions, a lack of quality, or no shop floor visibility? What annoyances does the shop floor dread facing?  What are the expensive phases in your current processes?  Determine the critical items a successful software solution must address to reduce expenses or time.

  • Forecast the ROI.
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The steps you take before you have a budget will position your team for success. Illustration by www,colourbox.com

Now that you have a good idea of the key factors to be solved, begin considering the ROI. What are paper-based work instructions and travelers costing you? How much scrap is generated by your quality escapes? What would it be worth to management to have a real-time view of production at any time? Before you go to management for a budget, or seek our possible solutions, you should have a good idea of what a solution might be worth. Keep in mind, the ROI you calculate here doesn’t need to be precise. Even a rough sketch of potential savings will help as you evaluate potential solutions and begin building your business case.  In some cases the expense reductions can pay for the solution in the same year to realize a successful project without needing a budget above investing the time to implement.

  • Conduct a shop floor analysis.

Finally, it’s time to see how a solution might work on your shop floor and with your processes. Contact potential solution providers to discuss your requirements and shop floor processes. They should be able to match your requirements with their software, and give you an idea of how software will work on your shop floor.  We call this a shop floor analysis. It is a critical initial step in moving a project from the theoretical to reality. Ask what can be done with a limited, or lack of a, budget.

Putting It All Together with Paperless Manufacturing

Any digital manufacturing project should start with these steps. None of them require a budget, other than time and effort.  Even if you’ve never considered paperless or digital manufacturing before, it doesn’t hurt to take a look at what options are out there. Identifying potential ROI is critical for proving project need and the business case.

Waiting another year or ignoring problems isn’t a solution, but taking a few simple steps to kick-off a project and take control of production is.

Want to learn more, or speak to a CIMx representative for a shop floor analysis, then contact us today. We’re always happy to help.

Don't get buried by the cost of your overly complex MES. Illustration by www.colourbox.com

Identifying Customer-centric MES Customization

Your company may need a viable custom MES solution, but not all software companies will offer it to you.

By Kristin McLane, President of CIMx Software

Not long ago I read a Business Insight by Shep Hyken, author of The Amazement Revolution. Hyken and CIMx share a core passion: creating a Customer Service culture.  Generally, I agree with Shep’s philosophy, and love him as a speaker.  Putting the customer first is the basis for a true win-win in business.

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If you’re not careful, a simple configuration can eliminate your ROI over the life of an installation. Illustration by http://www.colourbox.com

In the Business Insight article, Shep talked about Flexibility as a key to great service (his example focuses on dining at a restaurant).  He said (and I agree), “The best companies are flexible ones.  They understand their customers’ different needs and adapt to them.  Not everyone is the same.”  He goes on to discuss how some customers need a lot of customization in the sales process and product offerings while others don’t.

It’s true.  Some prospects allow us to guide them through our standard discovery-based, consultative sales process.  In Shep’s article, these are the restaurant patron that allows the server to offer them choices (what side, how it’s cooked, etc).  Other prospects want to forge their own path.  At the same table, these are diners that have very specific requirements for how their meal is delivered, with something extra or on the side.  Just as both diners think the meals was customized for them and are happy, our prospects also need to be completely satisfied, whether they use our process or their own.  They need a project delivered on-time, on-budget and to their specification (we feel this is so important, we guarantee it.)

In both cases, the customer is the focus.  They’ve received exactly what they wanted.  In his final paragraph, Shep states, “You may have to pay for customization.  But, if you get what you want, it is worth it.”

Dangers of MES Customization

Here’s where Shep and I part ways.

In the software industry, customization is a dirty word with good reason.  Customized software can be expensive, and it’s often not sustainable.  Customers want customized solutions, and most companies are more than happy to deliver at a premium cost. The difference between software providers is some will deliver a viable custom solution that minimizes the cost over time, while others will set you up with an expensive solution to increase the service costs over the life of the installation. It all depends on how their business model is set up.

Some software companies use marketing to hide the expense of customization (even as they secretly forecast ludicrous expense charges every time their customer needs something done).  Whether they call it Business Rules, Configuration or Modularization, the process is the same – the customer gets the specific additions and changes they need.  In adding customization, however, some providers are setting you up for future failure.

In our industry, companies know you will be a repeat purchaser.  Once you invest in the original purchase, you will invest again – whether in annual support or in upgrading.  So how a company builds the software, how they support the tool and how they provide the customization will impact the customer over and over again.  Not all companies will implement customization with the customer’s needs in mind.

They will build a “personalized” system with all the customization you want, building in complexity that requires you to engage with the supplier repeatedly in order to maintain your business processes.  Other suppliers deliver the same level of personalization and allow you to maintain your own processes over time; as internal departments have changes, the system supports them inherently.  It’s critical to understand how this works prior to purchasing a system, because eventually you will need to update, upgrade or make changes to the system.

Can You Support the Custom Solution?

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Do you know what configuration will mean for your business? Illustration by http://www.colourbox.com

If the software provider designs solutions that require product changes to support your installation, your TCO (Total Cost of Ownership) will be much higher. It will be much more difficult to find an ROI. In fact, you may never find the expected return on the investment, and in the future, you may elect to hold off on updates and upgrades with the solution slowly devolving into obsolescence. All this is the result of the tools that the supplier used to deliver your specific needs.  Core product aside, you will have specific requirements during installation and you need to know how these will be delivered to know your true TCO.

Before purchasing, it pays to understand how the customization will be implemented, and utilize a supplier that doesn’t rely on high service charges. Here are some questions that you can ask to get to the heart of the issue:

  • How will the changes that I’ve asked for be implemented?
  • When I implement the next release of your software, what happens to these changes? Please be specific.
  • What costs are there for me at upgrade?
  • If I asked you to demonstrate how to make a change to the software on my own, what could you show me?

It goes back to our core Customer Service Culture. We know that overtly complex customization and expensive service charges are great for short-term business gains, but are never the basis for a long-term business relationship. If you treat a customer fairly and with respect, delivering viable solutions, they will turn to you again and again. This is the foundation of our business.

We’ve got a list of helpful questions for you to ask during the software process, built around understanding the lifecycle cost of the products that we (and others) are offering.  Ask us about it.  We’ve made it part of our standard sales process, helping you identify the right product (and company) for your manufacturing needs.

A robust MES provides a solid foundation for improving quality. Illustration by www.colourbox.com

Improving Quality with Paperless Manufacturing

Manual and paper-based production records are a critical source of errors, and hinder the efforts of quality control.

By David Oeters, Corporate Communications with CIMx Software

Production moves fast.

Assembly lines must keep moving. Machines need to run. Downtime is lost money.

Even in the most exacting complex, discrete manufacturing industry, speed is vital.

With an eye on OEE (Overall Equipment Effectiveness) spending resources and time on anything other than production represents failure.

This might be why some see shop floor data collection as non-value added time – there is no immediate benefit to tracking numbers on a spreadsheet or filling out a paper-based traveler. If your focus is on completing quality work and meeting or exceeding quotas, then data isn’t important.

Be honest – are the minutes saved by “guesstimating” and fudging a few data points worth it?

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Are you confident in your shop floor data and quality control? Illustration by www,colourbox.com

Quality and Paperless Manufacturing

Automated production records and tolerance checks are critically important for shop floor improvement.

An initiative and a few more moments in the morning huddle aren’t going to deliver the benefits of real-time shop floor data. You’ll never see real, sustainable improvement in your records and quality using paper-based records. Asking a Quality professional to do their job with dated records is like asking a dentist to do their work with a hammer.

Manual records have too much margin for error. Trying to design foolproof processes that meet the requirements for audits, give you the data you want and need, and fit your shop floor, is never going to work.

Papers get wrinkled. Notes get smudged. Travelers get misplaced. Humans are fallible.

With even a sliver of doubt, records become suspect and quality suffers.

A modern MES, which automates data collection and production records, ensures the shop floor fulfills requirements through process enforcement.

Then the shop floor can focus on what they do best – production. Quality Control has the tools they need to be effective in their job.

Focus on Manufacturing

Rather than adding complexity and cost to production, paperless manufacturing allows everyone to work better. Improvements become not only possible, but sustainable.

Today, with modern software architecture and the advancement of technology, software is less expensive than ever before.  A system can be up and running and users trained very quickly so you can begin building your ROI within a month.

In addition to automated records and improved quality, you have revision-controlled planning, paperless operations, enhanced planning, and real-time shop floor visibility and control.

Want to learn more, or see how paperless manufacturing can improve your shop floor? The CIMx free shop floor analysis is an excellent way to kick off a new project.

Use this handy tool to evaluate new shop floor technology to reduce risk and ensure an ROI. Image by www.colourbox.com

Improving Quality with Paperless Manufacturing

As manufacturers struggle to reduce costs and improve production, more and more companies are turning to paperless manufacturing to improve quality.

By David Oeters, Corporate Communications with CIMx Software

As production grows increasingly more complex the Cost of Quality (COQ) is also increasing, with some companies reporting costs as high as 10% of revenue. The indirect and soft COQ may be even higher as you consider the non-value added time necessary to evaluate and address quality escapes.

When manufacturers consider initiatives to lower costs, quality is an emphasis. Modern MES and paperless manufacturing systems are delivering tremendous value to companies focused on improving quality.

MES and Quality Improvement

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A robust MES provides a solid foundation for improving quality. Illustration by http://www.colourbox.com

According to a white paper by Renaissance Services, the foundation of all quality escapes is the inability of the manufacturer to manage the details of production. The primary focus of paperless manufacturing and an MES is managing details through automation or providing the correct information at the right time and place in the production. Consider how paperless manufacturing addresses common sources of production errors:

  • Planning errors.

This could be the wrong plans or the wrong technical specifications. Many of these are paper-based errors, and occur when the wrong plans are used, or critical information is missing from the work packet. An MES will ensure the proper planning and revision control, and make accessible all the information the shop floor needs at any time.

  • Errors in approvals.

The approval process relies on communication and collaboration. Without a single source of manufacturing truth or a structure for communication and collaboration in the production process, errors occur during approval. Shortcuts are taken during approval, as the effort to coordinate the process increases. Improved quality relies on a disciplined approval process.

  • Missing documentation from the Technical Data Package (TDP).

Many times with paper-based planning, documentation is left out because it isn’t considered necessary. This is especially true of the TDP. Critical documentation from the first article inspections is ignored or buried to reduce complexity or to speed up production and get a product to market – leading to errors.

  • Ambiguity in the technical requirements.

Without automated quality checks during the production process, any ambiguity in specifications can lead to a critical quality error. For example, when a shop floor uses a paper spreadsheet to record production data, there’s no real time feedback loop on quality checks, and errors will occur. Quality assurance will find the error too late for corrective action.

  • Requirements that are overlooked in production.

This comes down to inadequate documentation and processes during production. Requirements are inadequately communicated to the shop floor, or aren’t accounted for in the planning. Without real time quality checks or a method of managing production, critical requirements are ignored until problems occur.

  • Changes in standard processes, especially special processes, in the production cycle.
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Are you confident in your quality control plans? Illustration by www,colourbox.com

Process enforcement in an MES or paperless manufacturing system ensures the shortcuts that often creep into manufacturing process are eliminated by ensuring documentation is reviewed and work signed off before planning is released. Without process enforcement, the shop floor will rely on processes they know, not the correct processes.

  • Quality escapes that slip through inadequate first article inspections.

Often in paper-based or unstructured first article inspections, critical details can be lost, or there is an assumption on how work will be completed. This is especially true as the number of first article inspections increase at a site. Without adequate time, corners will be cut. With the automated records and audit reports created in an MES, critical details aren’t lost and are automatically recorded for future use, and the shop floor has more time to properly conduct a first article inspection.

 Smart Manufacturing and the Future of Production

As complexity has increased in production, and the tolerance for errors has decreased, manufacturers can no longer adequately manage the information and detail necessary using error-prone paper planning and inefficient processes. Manufacturers need a comprehensive system to manage production.

Manufacturing needs aren’t slowing down. The complexity and technical requirements of manufacturing are increasing. Consider Smart Manufacturing – the integrated technology and systems essential for advanced Smart Manufacturing require an MES to manage production. Excel spreadsheets and Word documents simply can’t manage complex manufacturing processes.

Want to learn more, or see how a shop floor software system can improve your shop floor? Contact CIMx today for a free shop floor analysis to learn more.