Monthly Archives: May 2016

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.

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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:

  • 3d render of time concept roadsign board isolated on white background

    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.

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.

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.