Monthly Archives: September 2012

Are You Putting “Best” Into Manufacturing Best Practices?

Are You Putting “Best” Into Manufacturing Best Practices?

“Best Practices” has become an industry buzzword so overused it is more “buzz” than word.  In fact, a recent study discovered the phrase “Best-Practices” was used more than 4,600 times in industry press releases.

Reliable metrics and data collection is an integral part of any best practice initiatives.

That’s too bad, because a best practice program offers tremendous benefits to manufacturers through increased quality, and reduced errors, non-productive work and variation.  But, like the latest fad diet, concepts this “buzzy” often lead to short term improvements and not real sustainable change.

There are three key components in best practice campaigns: people, process and technology.  First, you need to have buy-in from people on the shop floor to implement process improvements.  Empower and prepare people to make changes, otherwise production might suffer as you struggle to micro-manage process changes for your team.

Also consider your process as you plan a best practice campaign.  You need to have a process for not only identifying a best practice, but implementing the process change.  If the processes you are using require significant production downtime to make a change, the net result of the best practice exercise won’t benefit the business.

Finally, many best practice campaigns are only made possible by technology and tools which can evaluate a production process and help sustain the improvements with procedural enforcement, creating a culture of accountability. Software tools like MES which offer real-time visibility of the shop floor and accurate production process control are invaluable for sustainable best practice improvements and operational excellence.

Do you have the tools to capture real-time production data?

Before you begin any Best Practice initiative, study these three components in your own business to evaluate your potential success.  If your technology component doesn’t offer real-time visibility of production processes, then you won’t be able to measure or maximize your best practice benefits.  Similarly, without buy-in from the shop floor team success will be difficult to achieve.

A careful balance between people, process and technology are essential for success.  There may be costs associated with attaining this balance, but the benefits of the change will not only give your company a competitive edge, but also support sustainable best practice process improvements far into the future.

A successful process improvement campaign can be a game-changer for manufacturers.  Implementing best practices, Six Sigma improvements or Lean Manufacturing is a step toward achieving operational excellence, but sustainable change can only be attained once the proper tools are in place.  The right technology that enhances processes and empowers people is the BEST “Best Practice” in today’s competitive environment.

Have you had any success implementing best practices in your company culture?  What steps have you taken to empower employees to enact best practices, and what tools have you found to help sustain change?  Let us know, we’d love to hear from you!  Join us next time as we take a closer look at paperless manufacturing, and how it can help you find manufacturing success today.

Calculating ROI for an MES can be a MESS

Calculating ROI for an MES can be a MESS

But it doesn’t have to be.  Avoid the mess with a few simple tips!

The other day I was playing Go-Fish with my son.  The entire game, he seemed more interesting in Going Fish than finding pairs.  Finally, I dropped my last card, while he held an entire stack of cards clutched in his hand.  “Ha!” he laughed. “I win, Daddy!”  Arguments about rules didn’t matter, because we weren’t playing the same game.

Calculating ROI for an MES has the potential to be a lot like playing cards with my son.

Calculating an ROI is an important step in justifying a capital expenditure.

ROI is an important step in planning a capital investment like an MES solution.  Businesses go to great lengths to draft criteria and benchmarks for their ROI, which becomes a key piece of evidence in justifying project expense.  MES vendors make claims about their customers achieving ROI.  But, like playing cards with my son, trying to compare ROI can be frustrating when everyone uses different rules.  Different manufacturers and different industries use different criteria for their ROI analysis, making claims appear untrustworthy.

But calculating ROI is not a meaningless exercise.  Start the process by looking at why you are implementing a new MES.  For most manufacturers, there is some business “pain” motivating the project.  Study the value or savings achieved if the MES is implemented successfully and the pain removed.  Use this as you calculate ROI.

Many times there will be “soft” savings which are hard to quantify but have a significant impact on business, such as increased productivity.  They may require estimates.  Market data can help create a more accurate estimate.

During the planning stage, you will find many internal users see the MES as an opportunity to make their job easier.  This leads to calls for “additional” functionality in the MES beyond the original scope.  Added functionality often has a negative impact on ROI.  One solution would be to implement the MES in phases, with the original pain becoming the first phase.  Additional phases address other pains.  Before you implement each phase, calculate the cost and adjust your expected ROI to justify the new functionality.  This will give you a more accurate view of ROI.

Plan your project in phases to ensure you meet your ROI expectations.

The secret to accurately calculating ROI for an MES isn’t a magic algorithm or formula, it’s being aware of the challenges facing your plant, assigning a value to the solution, and being disciplined in your approach.  How many times have you been involved in a project in which the final ROI was never achieved or even measured?  How many companies use ROI to justify the project, but never expect it to be achieved, and what does this say about the business?   Use your ROI calculation and be disciplined to avoid  lower profits or cost overruns.  Share any best practices or experience you have in the comments below.  We’re happy to answer questions.

Next time, we’re going to look at Manufacturing Best Practices and consider if it’s time to re-evaluate what makes a practice “best.”  See you then!