Category Archives: ERP

Defining the ERP and MES Connection

When problems crop up in production, savvy manufacturers immediately search for a solution.

Many turn to manufacturing software like Manufacturing Execution Systems (MES) or begin looking to their existing Enterprise Resource Planning (ERP) system for the functionality they are missing. Confusion creeps in at this point. As software providers expand their offering through development and acquisition, the lines blur between MES and ERP.

Removing the confusion and clearly defining the roles of the MES and ERP will eliminate this problem and help as companies plan for the future of their business.

The Role of the MES and ERP

Just as no accountant should ever use an MES to balance the books or run financials, no ERP will ever offer the functionality necessary for complex manufacturing. It can’t be done.

The MES delivers the workflow-based functionality required for discrete manufacturing. With a system based around the production value chain, it manages work and operations, and links data in a production cycle. Mistakes and quality escapes are flagged, allowing rework paths to be implemented. You can send a bill through an MES, but it’s not the optimal solution to billing.

The front office requires transaction-based functionality for financials, customer management and human resources. Data is input and tagged, creating data links, but at that point the process stops. There’s no workflow control because it’s not necessary. You could track a change order in a transaction system, but inefficiencies will cause the shop floor to struggle.

Some companies market their products as a “Manufacturing ERP.” They offer minimal manufacturing functionality tacked onto their core ERP product, often as a pricey module. It looks great in demos and claims to support some production processes, but a transaction system will never deliver the workflow control and visibility discrete manufacturers need. The inefficiencies result in “workarounds” your operators develop to overcome features that don’t work.

Fitting your Software Systems Together

Many companies initially turn to their ERP for manufacturing solutions, mistakenly believing a single software solution will lower costs and IT requirements. It doesn’t. A supplier selling an MES and ERP solution has either put a shiny “MES” veneer on top of basic ERP functionality or purchased an existing MES and completed an integration that you can’t control and they won’t be updating. You end up with an expensive solution with built-in inefficiencies, expensive upgrades, and gaps in manufacturing functionality.

The ERP and MES are separate, standalone systems that work best together when the user (your company) designs the integration points. This way, your front office has a software solution designed and built for their needs. Similarly, the shop floor and production team have the specialized functionality, visibility and control to keep up with the pace and complexity of manufacturing.

Since you aren’t buying expensive modules or customized functionality to awkwardly extend a software solution, you lower the overall cost. You have a clear upgrade path for both the MES and the ERP, and never struggle with an outdated solution.

Your company works from an integrated, cohesive production and business database. The reports use accurate data, sourced from the systems best positioned to collect and intelligently link information to increase production and efficiency while cutting costs.

Getting Started with Data-Driven Manufacturing

Once you’ve decided to eliminate inefficiency and embrace data-driven, smart manufacturing with a system like Quantum, the next question is where to begin.

Many mistakenly believe a software infrastructure project must start with the ERP, but the truth is it often makes more sense to implement an MES first.

Companies report a much quicker ROI for manufacturing software. The right manufacturing system will cost significantly less than an ERP, can be installed quickly and will pay immediate dividends through cost savings, and lower scrap and waste. The MES will reduce the scope and cost of the ERP by clearly defining the requirements of the enterprise system. With the MES in place, you won’t be pressured to purchase additional modules or software.

With manufacturing software you shield production from the disruption that often accompanies an ERP installation or upgrade. You can safely update other software when you are ready, with the comfort that your production data and shop floor are secure.

Want to know more, or see what benefits you will discover with manufacturing software? Contact CIMx for a free shop floor analysis with one of our Application Engineers. As always, the report is yours even if you decide Quantum isn’t the system for you.

Are You Getting the Whole Story from Your MES Vendor?

The decisions a vendor makes while building their system can have an impact on the viability and cost of your solution.  Learn how you can protect yourself from hidden costs and frustration.

By Kristin McLane, President of CIMx Software

Make versus Buy?  It is a question that has vexed many a manufacturer looking for the shop floor control and visibility an MES (Manufacturing Execution System) or paperless manufacturing system will provide.

Did you know the decisions a software vendor makes with their product can have a major impact on the cost and long-term viability of your purchase? Illustration by www.colourbox.com

Did you know the decisions a software vendor makes with their product can have a major impact on the cost and long-term viability of your purchase? Illustration by http://www.colourbox.com

Building your own software system, the “make” in this equation, has its advantages.  You can design the system you want, and if you have the patience, resources, and money to make it happen, that’s the system you will get.  But, it will be significantly more expensive and risky than other options, and you will need to invest time and resources to secure the long-term reliability and maintainability of the software.

Buying a software system means reaching out to vendors, researching options and how they will work with your workflow and shop floor, and purchasing the solution you need.  It is less expensive, and you have software support (at least, with reliable vendors you do), but it does require initial work, and training and preparation on the shop floor.

There is no right or wrong answer to the make versus buy question for you.  That said, MES and paperless manufacturing vendors also face the option to make versus buy, and their answer can have a major impact on the product they offer you.

The Genealogy of MES Functionality

Today, with the rapid rate of change in technology and manufacturing processes, MES and paperless manufacturing systems will need new functionality to maintain their competitive edge.  The vendor needs to decide how they will fill the hole in their product.

Some vendors “make” the functionality by writing new code and continuing to develop their product.  There are benefits to “make” for customers.  By developing the functionality in-house, vendors ensure the addition is tightly integrated with the core product, and it works seamlessly with the other product capability.  The functionality should be thoroughly tested before it is released to the public, giving you confidence in the results.  In addition, any installation, implementation, and training will be done by the people who wrote the software, which is always a benefit.

Other companies elect to “buy” the functionality.  They see a hole in their offering, and do exactly what a potential customer does – market research, find a company or product that fills the hole, and then purchase the solution.  The vendor adds necessary functionality in their product, but it is a budget-based, not an innovation-based solution.

The Benefits of an Innovation-based Solution

There are problems with “buy” based solutions in MES and paperless manufacturing software.  First off, any purchased solution must be, somehow, integrated with the main product.  This is not always an easy process, especially when solutions use different system architecture.  Many products, filled with pre-purchased functionality (they sometimes call them “modules”) end up with a maze of integration points that lead to additional complexity and risk when it is integrated.

Position yourself for success by making the right software purchase. Illustration by www.colourbox.com

Position yourself for success by making the right software purchase. Illustration by http://www.colourbox.com

It can lead to other problems as well.   In an MES system, every interaction has offsetting interactions throughout your production.  A non-conformance in one area has repercussions in notification, messaging, resolution, archiving, reporting, and more.  Without the right architectural approach, the loosely linked functionality is adjusted and readjusted each time you have a new requirement or you need to update the system.  Over time, the need to adjust the system to account for the genealogy of the individual systems that make up your software significantly increases the TCO (Total Cost of Ownership) of your system.  It becomes a confusing software mess that hinders production and adds cost.

Sure, the vendor may have found a quick and easy solution to their missing functionality, but you’ll be paying for that solution over the life of the software.  Have fun with that…

Behavior versus Transaction-based Software

This is a common problem for manufacturers that turn to their ERP vendor for an MES solution.

When we started in MES eighteen years ago, there were just half a dozen vendors on the market.  ERP systems were just being implemented in manufacturing, and MES focused on connecting the shop floor.

Over the next 10 years, ERP vendors searched for ways to expand their customer offerings and gain a critical edge on competition.  At the very heart of an ERP (any ERP) is the transaction.  The ERP focuses on documenting and managing the transactions that make up your business.  Because the ERP was a transaction-based system, it was far too complex for these vendors to integrate a simultaneous workflow-based system that is the foundation of an MES.  Vendors who tried to build their own MES usually delivered a template-based system (which uses transaction architecture) that requires significant training and will never mirror your existing workflow without customization.  Other vendors started buying MES and offering them as “add-ons” to their primary offering, the ERP.

All too often, a “buy” MES purchased by an ERP vendor is not likely to be integrated with the main platform.  Sure, they may have developed a plan for integration, but it isn’t going to be any better than another MES integrated to the ERP.  Since the vendor didn’t build the MES, they are going to have difficulty supporting it, and any additional functionality you’d like to add to the MES, or upgrades or updates, will be another purchase or a development struggle since MES is not their primary expertise.

This is why many companies don’t offer free product upgrades with new releases.

Consider where and how the system and functionality came from before making a purchase.  Are you talking to an ERP vendor about MES?  If your ERP vendor has an MES, chances are it’s a “buy” and not a “make.”  The vendor who built and developed the software will ensure better support, lower risk, lower project complexity, more software updates and upgrades, and a much lower overall TCO.

Be sure your vendor “makes,” and not “buys” the functionality you need for the shop floor.

Is Your Shop Floor Hammering to Make It Fit?

Most manufacturers know quality and efficiency would suffer if they asked their shop floor to use the wrong tool, but all too often that’s what happens when a shop floor uses an ERP to do the work of an MES.

By Kristin McLane

Do you hammer to fit your shop floor operations? Clip art by Microsoft.

Do you hammer to fit your shop floor operations? Clip art by Microsoft.

Hammer to fit.  It’s a term we use at CIMx to talk about the inevitable moment in manufacturing when you realize your sub-assemblies don’t fit properly, or a part is a little bit off.  Many times, the solution is to tap, bang, press, cajole or weasel the part back into place.  It’s not a best practice, and I’m sure no credible manufacturing expert ever proudly claimed to be the best at “hammering it in place.”  But, if you’ve ever been on a manufacturing shop floor, you know there’s not a lot of time to stand around (or at least there shouldn’t be).  Many times you do what you can to keep the process moving, but hammer to fit is NOT the optimal manufacturing process.

Here’s the point… in the low tolerance, highly-engineered world of discrete manufacturing… or, to be honest, all manufacturing today, I don’t think anyone ever wrote “hammer to fit” in the work instructions.  There is always a solution for making the parts fit and the customer wouldn’t accept something that was done any other way.

In fact, many times there isn’t even a hammer available on the shop floor.  A hammer is the least seen tool in the tool crib.  I’ve seen drills, saws, all kinds of tools that attach or separate objects, but rarely have I ever seen a hammer.  So if we don’t really hammer parts to fit them together (really – most times we take it apart and make it right), then why do many of us try to make our supporting tools – such as software, applications and processes – do things they weren’t built for?  Using the wrong tool for shop floor control and visibility is like writing “hammer to fit” in your work instruction and expecting efficient operation and quality results.

Make sure your shop floor has the right tools for success. Illustration from www.colourbox.com

Make sure your shop floor has the right tools for success. Illustration from http://www.colourbox.com

We’ve been banging on the topic of ERP (Enterprise Resource Planning) versus MES (Manufacturing Execution System) for a while now.  We started a dialogue on why you need both – and you do – and what each system does.  An ERP system, naturally or through the use of add-on functions, simply cannot do what an MES does. It’s not built to deliver the process control or visibility the shop floor needs.

If you need to track, bill, order, sell or report on something, use your ERP.  But if you need to build, use an MES.  Simply put, the MES builds things while the ERP tracks.  Trying to use one system to do the work of the other is using a tool to do a job it wasn’t meant to do.  You can make it look like it fits, but the solution isn’t efficient and it won’t last, won’t perform, it’s probably costing you money, and it most certainly isn’t supporting your shop floor the way you need it to.

If you need an ERP, there are lots of vendors out there that provide the window into your data an ERP gives you.  If you need shop floor and process control and information management, then use an MES.  Talk to us, we’re happy to help.  Visit us at www.cimx.com.

Overcoming Invisible Stop Signs Holding Your Shop Floor Back

An MES and an ERP are very different systems, and if you don’t understand the role each play, you may be hurting your shop floor.

By Kristin McLane, President of CIMx Software

We’ve gotten a lot of feedback recently on our discussion of the differences between MES and ERP.  Obviously there is a real need for information out there, and some confusion on the topic.

You may not know it, but if you use the wrong shop floor solution, you may be holding your production back.  Image by www.colourbox.com

You may not know it, but if you use the wrong shop floor solution, you may be holding your production back. Image by http://www.colourbox.com

The confusion is understandable.  A quick search online reveals little information on why it is important for manufacturers to have both systems.  ERP vendors focus on why an ERP is important, and MES vendors focus on their shop floor capability.  Many ERP vendors even market MES offerings or modules.  It is easy to believe an ERP can do it all, leading many manufacturers to struggle with a less than optimal system.

But, as we have said, the ERP and MES play different roles and use different structures.  The ERP is a transactional system.  It logs transactions, one at a time, and creates an ordered system for filing and retrieving the information.  An ERP will use the information to analyze patterns and trends – data tools focused on historical information.

Since the ERP is focused on collecting and analyzing historical data, it’s not designed to process a flow of information.  It sees data points, not operations.  Data points work great in finance, and are necessary for invoices, bills, payments, customers, and other transaction-driven business functions typically handled by the ERP.

The shop floor isn’t transaction-driven, it’s process-driven with a focus on completion of work, not just collecting and organizing information.  Information on the shop floor could include formulas, engineering drawings, safety precautions, quality metrics –process-driven information.  Many of these are inherently if/then processes, which cannot be handled effectively by a transactional system.

For example, think of a non-conformance on the shop floor.  In a transactional system, data would be logged and organized.  In a process-driven system, the information would be logged, and a next step in the process would be activated (if X happens, then Y).  It is an important difference.  An MES offers a clear advantage over an ERP in this case.

Is your ERP designed as a transaction-based system, or for workflow control?  Image by www.colourbox.com

Is your ERP designed as a transaction-based system, or for workflow control? Image by http://www.colourbox.com

Here’s another way of thinking about it.  The ERP works like a stop sign on the road.  When a transaction happens, data is entered into the system.  No further action can occur until the data is in the system.  As data is entered, the next car (data) waits until the preceding one is complete.  Think of an invoice.  It enters the system, and until it is entered no payment can go out or funds be collected.  This is an efficient system for invoicing, but the stop sign, starting and stopping will slow shop floor work, and become detrimental to productivity.

An MES and paperless manufacturing work more like a traffic circle or roundabout.  Shop floor work should move at a steady, continuous pace.  The roundabout will manage traffic and movement.    Progress is managed, visible, continual and controlled.

Don't sacrifice productivity and quality with the wrong workflow control system in place.

Don’t sacrifice productivity and quality with the wrong workflow control system in place.

Shop floor processes operate the same way.  Work progresses evenly throughout the day and across the floor, with the MES not only collecting data and marking progress, but driving and controlling it.  Different groups or individuals may need to come together to work on a specific process.  Work will speed up or slow down naturally as the work orders come in and are filled.  The MES will manage the process.  It continually provides directions for each step, one at a time and as a whole.

Stop signs are a detriment to progress, and are the least efficient way of moving processes and work.  They may keep things from running into each other, but they aren’t going to increase productivity.  An ERP is designed to manage, record and analyze business processes, while an MES is designed to boost productivity, deliver shop floor visibility and manage shop floor processes.

Any ERP that promises to do both is either fooling you, selling you two individual systems, or not fulfilling either role effectively.

How Do You Steer the Shop Floor? The Difference Between MES and ERP

Struggling to understand how an MES and Paperless Manufacturing will help your shop floor?  Look no further than a parking lot for an easy-to-understand answer.

By Kristin McLane, President of CIMx Software

We often turn to the familiar for help explaining the unfamiliar.  This is why we often use the line, “It tastes like chicken,” when struggling to describe a new food.  We know chicken, and it creates a comfortable, easily relatable connection.

Who is driving your shop floor?  Photo by www.colourbox.com

Who is driving your shop floor? Photo by http://www.colourbox.com

This may be why so many of us see an ERP and MES system as interchangeable, never seeing the critical difference between the two.  An ERP is familiar.  We understand ERP – accounting, payroll, billing and records.  MES is the shop floor, the heart of manufacturing that can be a confusing hurricane of machines, tools, processes and materials.  We turn to the familiar and make a connection (maybe even sub-consciously) between ERP and MES.  The roles and systems become mixed in our mind.

But it doesn’t work that way, and trying to force an ERP to do the work of an MES usually has a negative impact on your business.  I’m going to take a different approach this time, and turn to the familiar to explain the difference…

Think of your manufacturing business as a car.

An ERP works like the windows and mirrors on your car.  It offers a convenient way to view, track and plan your business.  With an ERP (or a rear view mirror) you can track where you have been.  You use the windshield to see where you are going.  Look out another window to see where you are.  Orders come in, money goes out, old employees retire and new ones arrive as you track customer data, create invoices, look at expenses and more.

But a car, and your business, isn’t just windows and mirrors.  You need an engine to move the car, and a way to guide and control the engine.  An MES is the dashboard and GPS of your organization, giving visibility and control of the engine, the shop floor and manufacturing, to you.

With a good dashboard and GPS, you have the directions and maps (visuals) to where you need to go.  You have a wheel, gas pedal, brake and more to give you control over the engine.  You can track progress and receive warnings when something goes wrong.  By organizing and transmitting work instructions digitally, collecting shop floor data, tracking quality, and controlling production, you control the heart of your operation.

Pushing a car is like running a shop floor without MES - You could do it, but there is a much better way. Photo by www.colourbox.com

Pushing a car is like running a shop floor without MES – You could do it, but there is a much better way. Photo by http://www.colourbox.com

Sure, you might be able to find the local mall without a map, and if you point the car VERY carefully, you may never need to turn the wheel, but life is much easier with a good dashboard, GPS, and a car you can steer.  An MES delivers the drawings, blueprints, details, inspections, directions and other information you need to build your product.  It doesn’t just hand it to you in a heap.  It organizes it, just like a GPS or dashboard.  It provides turn-by-turn assistance, then tracks real-time data during production and gives you control of the process.

When you run into an issue (and who doesn’t on the shop floor), an MES can help.  A GPS offers advice on avoiding construction and adjusts the arrival time based on your current speed.  An MES provides workarounds for production problems, re-routes work around machines not functioning, and gives you real-time access to product ship times.  To put it simply… windows don’t give you that level of control.

And just like a car, I wouldn’t want to drive (or ride in) a car with no windows.  It’s not pleasant to travel with no idea of where you are going or where you’ve been.  I’m also much happier driving with my GPS and a reliable dashboard giving me visibility and control over the engine, direction and speed of the car.

Make sense?

When asked, “What is MES?” I’ve heard people start quoting ANSI/ISA-95 standards, or listing system functions and features, but it’s not until I imagined riding in a runaway shop floor (or a fast-moving car) with no brake or steering wheel did I realize how critical MES was for a manufacturing operation.

Deciphering the Role of MES

Understanding the difference between MES and ERP isn’t difficult once you understand the Human Element of manufacturing operations.

By Kristin McLane, President of CIMx Software

Defining MES is much easier when you understand the human element on the shop floor. Illustration from www.colourbox.com

Defining MES is much easier when you understand the human element on the shop floor. Illustration from http://www.colourbox.com

Trying to answer, “What is MES?” is not easy, and it’s a question I get a lot.  A good MES delivers smooth operations.  The information and process management available in true MES increases quality, eliminates scrap, and build products efficiently.  For each part of your operation, MES has a different meaning.  For the shop floor, it’s where they get work instructions and collect data.  For engineering, it’s how instructions are built and a tool for ECO (Engineering Change Orders).  For finance, it might be a line item, for sales and customer service it’s a way to track orders, and so on…

This is why I’ve begun connecting the role of MES to the human element in manufacturing.  Confused?  Here’s what I mean…

Most customers we talk to are confused about the boundaries between MES, ERP, scheduling and a host of other products driving the engine of their business.  In digital business tools, an ERP or MRP is focused on the business and finance of your business, while the MES focuses on people – helping them work better, smarter and faster. 

Your workplace is teeming with the human element right now.  Employees are designing, planning, building, testing and shipping your products every day.  If you’re in the services industry, your product is your people. 

The human element can be amazingly powerful and scary all at the same time.  Machines aren’t as creative as humans, but a machine can reliably repeat the exact same motion long after a human arm has tired.  Humans aren’t as durable as a shop floor machine, but when disaster strikes, I trust a human to think through the next steps.

Make your operation more efficient with MES and Paperless Manufacturing. Illustration by www.colourbox.com

Make your operation more efficient with MES and Paperless Manufacturing. Illustration by http://www.colourbox.com

Take a closer look at a manufacturing business.  Inside the business, you have HR, finance, customer support and other operational areas.  The central tool to manage these aspects of your business is the ERP software.  The ERP connects these areas, manages the information and provides a communication flow.  It is a big task, which is why ERP installations are typically long and complex, but should result in a well-running support system.   It is a transaction-based system. 

Let’s examine this further.  An order from the Acme Co. comes in for 10 green widgets due a week from Tuesday. The order is entered into the ERP which stores the information and notifies engineering and the shop floor of the order.  The ERP is very good at managing a transaction-based operation such as this.

In engineering another set of tools come into play.  Engineering uses CAD systems, drawing and specification tools, and spreadsheets to produce the documentation necessary for green widgets.  This includes detailed instructions for how to build the widget, any relevant measurements to be made during production to ensure the widget meets specifications, drawings, blueprints, photographs, safety sheets and all other files related to the part.  One useful tool you often find here is a PDM (product data management) system to organize engineering documents and ensure only the latest version of a document is available.   

An ERP manages transactions, and a PDM organizes documents, but neither creates the process-focused operation necessary to create a work package for the shop floor.  This is the human element we mentioned at the beginning that is the focus of an MES, helping manage human and operational elements on the shop floor to ensure you have the most efficient-built green widgets for the Acme Co., and Acme has the quality assurance and as-built records they need for their completed order.

Choices and options.

Deciphering MES isn’t about using acronyms, it’s about understanding the human element on the shop floor. Illustration by http://www.colourbox.com.

Production control receives the order from the ERP and needs to match it with the documentation from engineering.  The MES completes this function, where the ERP cannot.  With just a PDM or an ERP, you end up contorting a transaction tool or document management system to twist a myriad of MS Word and Excel documents into a process, which leads to the poor humans on the shop floor reading and re-reading documents, trouble-shooting, searching for answers when they should be building.  Data collection gets lost in the ERP transactions or the PDM, if it is collected at all. 

MES adds the human element to your digital manufacturing tools.  You have widgets you need to build.  You have machines to do it.  MES tells the people what to do at each machine in order to build the widgets correctly.  Without it, the people on the shop floor have to make independent decisions based on disparate knowledge about production, or they rely on tribal knowledge that is never adequately collected.  Sometimes this works, but since there is no process control, you can’t guarantee it will work every time.  It’s an unreliable and very expensive way to manufacture. 

MES provides a toolkit connecting other business systems to manufacturing, ensuring your team produces to the highest quality tolerances and with the highest productivity.  Ultimately, it has the biggest direct impact of any system on the profit for the business.  In manufacturing, an MES is the basic building block upon which profit is built because it is focused on process-based manufacturing operations that drive the business.

When someone asks me what an MES is, I could recite a litany of acronyms, starting with ANSI/ISA-95 standards, toss in a PRM note and sprinkle in OEE or LEAN with a healthy dose of tech speak… or I could talk about the human element that is so critical for manufacturing success.  You don’t purchase an ERP to build a car, and you don’t hire machines to fix a problem.  You hire the best people for your shop floor and give them to the tools they need to succeed, and that’s where an MES comes in.

Fix Your Shop Floor Processes Now

Don’t fall into the “If it ain’t broke…” trap.  Sometimes your biggest mistake is in not doing anything.

By David Oeters, Corporate Communications with CIMx Software

I don’t know where I first heard the phrase, “If it ain’t broke, don’t fix it?” but it’s become the rallying cry of procrastinators everywhere.  Unfortunately, it’s a rallying cry that ends up a funeral dirge or death knell…

Case in point… my neighbor had a rattle in the car engine.  It sounded like an engine wheeze – metal on metal.  “No big deal,” my neighbor said. “It’s just something loose and the car’s working fine.  I’ll get to it before vacation.”

Does your shop floor run like a well-oiled machine, or a wheezing engine?  Photo by www.colourbox.com

Does your shop floor run like a well-oiled machine, or a wheezing engine? Photo by http://www.colourbox.com

Vacation passed and the rattle continued.  Other priorities and expenses came up, so why bother with a rattle that wasn’t hurting anything?  That is, until he destroyed the engine on his way to a business meeting.   The car overheated, the head gasket blew and it completely ruined the engine.  My neighbor missed his meeting, spent more than $4,000 fixing his car, enjoyed a night on the side of the highway waiting for a tow truck, and was forced to coordinate rides to work and trips to the grocery store while the car was fixed.

Lesson of the story… a simple belt replacement ended up costing him thousands in repairs, plus lost time, missed meetings, and endless aggravation.

Choices and options.

How will you handle broken and inefficient processes on your shop floor? Photo from http://www.colourbox.com.

It’s a lesson not all manufacturers understand.  Software Advice recently released a survey (found here) detailing manufacturing software buyer trends. The report, by Software Advice’s analyst Derek Singleton, identifies paper and spreadsheets as the primary method of tracking manufacturing processes for many of the manufacturers taking the survey.  Research by Oracle has shown paper-driven processes increase costs, introduce errors, add complexity and create compliance issues.  In fact, 75.9% of companies reported significant business risks due to inefficient document-driven processes, including paper-based processes.  So why do so many companies continue to use paper-driven processes to control the shop floor (the heart of manufacturing)?

Because if it ain’t broke, why fix it?  If all your shop floor knows is inefficiency and is comfortable with it, then why change?

More than increasing risk, paper-driven processes significantly increase costs for businesses.  As reported by Oracle, a study by the Association for Information and Image Management (AIIM) found businesses, “spend $20 in labor to file a document, $120 in labor to find a misfiled document, and $220 in labor to reproduce a lost document,” (www.aiim.org).  The money has to come from somewhere, so these costs are either eaten by the manufacturer or passed along to the customers.  So why are companies throwing away money on paper?

I go back to my neighbor and the months he spent with a rattle in his engine.  He knew he should do something, but other priorities came up and the engine never seemed that bad.  “It’s more work to fix than deal with it”, he told me once.

What steps can you take to increase shop floor efficiency?  What steps are your competition taking?  Photo by www.colourbox.com

What steps can you take to increase shop floor efficiency? What steps are your competition taking? Photo by http://www.colourbox.com

For manufacturers operating in a paper-driven environment, going paperless would mean buying and installing a new system (which takes valuable IT resources), integrating a new process, and training the shop floor.  It feels like a lot of work for some nebulous, paperless return.  If the decision-maker isn’t a shop floor employee, it is even more difficult to justify the cost since you don’t feel the paper-based shop floor pain on a daily basis… and so, life under, “if it ain’t broke, don’t fix it?” goes on.

But there is a danger to the, “if it ain’t broke, don’t fix it?” mentality, and the grinding noise in my neighbor’s engine perfectly illustrates it…  We recently worked with a manufacturer that repeatedly failed audits due to paper-based record-keeping.  In less than a month, we were able to install a system on the shop floor and begin collecting audit-worthy as-built records.  Another manufacturer lost a major client because they couldn’t guarantee timely change orders – a simple function in paperless manufacturing and MES.  Waiting to fix shop floor challenges isn’t a solution, it means disaster hasn’t struck yet.  Worse yet is failing to recognize there is a problem and it needs fixing.

So what does this mean for you and your shop floor?

Another section of the Software Advice study identifies improving or automating processes as the top reason manufacturers purchase new manufacturing software.  Other reasons include updating or modernizing their software, additional features and functionality, and company growth.  Another part of the study identified improving efficiency as the primary reason companies seek to replace existing manufacturing software.  We are seeing a consistent drive to improve the shop floor, and the beginning of a movement away from the “If it ain’t broke…” mentality because people are starting to realize “It is broke”.

Companies are beginning to take control of their own destiny and take action proactively, rather than reactively.  The manufacturing marketplace is tightening, and proactive process and efficiency improvements are a competitive advantage for many companies.   More and more companies are turning every day to paperless manufacturing and manufacturing software for an advantage.

“If it ain’t broke…” isn’t a recipe for success in modern manufacturing.  Take a lesson from my neighbor – if you hear a grinding engine wheeze in your shop floor, get it fixed or you might be stuck waiting while your competition moves ahead.  Are there problems you are waiting to solve on your shop floor?  Are there problems you don’t even recognize on your shop floor?  Are your work processes a victim of the, “it ain’t broke…” mentality?  If so, let us know.  The solution may be much closer, easier to solve, and less expensive, than you might think.