The manufacturing business case for MES

The manufacturing industry has been host to mounting competitive pressure over the last 10 years. The need to increase manufacturing efficiencies, cut costs, generate consumer demand and accelerate new product time to market has never been more prevalent due to the sheer number of competitive customer products available. Mark Perry talks to The Engineer to discuss these issues and the potential solution with the use of Manufacturing Execution Systems (MES).

Despite the increasing necessity to ensure manufacturers have efficient automation systems, many manufacturers still suffer from inefficiencies in the middle layer between the top floor and the plant.  This can be manifest in many areas, for example ineffective maintenance, equipment & man power scheduling, but also at the factory floor level in terms of energy use. However, a readily available solution to many of these issues seems to be passing by unnoticed. Manufacturing Execution Systems (MES) allow the seamless flow of information from the business level to the factory and shop floor and vice-versa. Bridging this information gap between the ERP (Enterprise Resource Planning) system and the plant floor is widely accepted as a prerequisite for a successful production strategy. It appears, however that the manufacturing industry remains somewhat in the dark as to the business benefits of an MES system. Consequently, improvements in three of the major issues within the industry, which can be defined as asset efficiency, operating margin and revenue growth are now beginning to separate the manufacturing and supply chain leaders from those struggling to compete in a fierce marketplace. 

Asset efficiency is an overarching issue for manufacturing, which directly impacts on operating margin and ultimately revenue growth. This is a key area for financial loss within any plant and subsequently the area where the smallest changes can have the most significant impact on bottom-line results. Asset efficiency is defined by a core problem within manufacturing, ‘dead-time’ – this could result from machine stoppages, reduced run rates or producing bad product – whatever the situation, you’re not maximising the value of your asset. Manufacturers find it increasingly difficult to map out the production value of both their machinery and man-power. It is often the case that machinery is left powered on, but idle in between product run changes. Alternatively, there are frequent cases where pieces of equipment continually break-down but, instead of upgrading or scheduling regular pre-emptive maintenance reviews, the company blindly lose money on reactive maintenance call-outs and product down-time as repairs are made.

Scheduling issues cause further problems in terms of batch production runs as plants are often required to produce a number of different batch products on a daily basis. This leads to increased ‘dead-time’ on the asset due to the increased  changeovers from product to product.  The machine modifications and man-power needed to change a product run can create significant idle periods until the change-over is complete and the line becomes fully operational again. The lack of ability to monitor staff also creates a plant efficiency issue, those un-registered ‘tea breaks’ all add up and can lead to companies losing anywhere from 30 minutes a week in production time.  

In order to maximise asset efficiency manufacturers must first gain accurate measurement of their working assets; a detailed analysis needs to be made of what each asset is doing at specific times of the day including all down-time activity.  By monitoring operating time, run rates and production quantities an MES solution can create a complete OEE and downtime overview.  This will highlight particular points within the manufacturing process which could be tightened, improved or upgraded to reduce financial loss caused by dead-time and production losses.

Currently, many companies rely on reactive maintenance procedures when monitoring equipment. Checks or repairs are not carried out until the machinery has malfunctioned and the process line has stopped. However, a process of preventative maintenance can be implemented using MES. The data capturing capabilities of the system can pin-point ‘problem’ machinery and set up regular maintenance checks prior to expected malfunction time frames. If the machine needs to be taken off-line for servicing or repairs the MES will also indicate available employees and time slots to carry out the necessary checks whilst minimising impact on production. 

Such scheduling facilities also extend to production runs; packaging lines can be scheduled run a number of different batches simultaneously to satisfy demand. Instead of creating small batch runs on a ‘fit-to-order’ basis, companies can schedule batch campaigns of longer production runs in order minimise changeover times and to react to expected surges in demand; these may be linked to a top-floor advertising or marketing drive.  Thus production can become more cost effective and efficient.

The ability for a manufacturing plant to increase its operating margin is essential if a company wishes to sustain its business in a competitive market. Some key areas for concern can be categorised as follows:

1. Waste – The issue of wasted product is an inevitable one on the factory floor. Whether natural wastage occurs through product change over from batch lines or breakdowns cause an entire product batch to be scrapped, the cost of product waste is significant. Waste reduction will often be at the top of the priority list for manufacturers when it comes to assessing areas for improvement.

2. Energy Consumption –Simple mistakes of leaving machinery running, or unnecessarily operating machinery during peak energy cost periods cost companies thousands in energy bills. Furnaces, processing machinery and pumps should only be left powered on when they are in use, leaving equipment switched on for an hour or two in preparation of the next batch is not economically viable. Larger manufacturers also need to take into consideration the environmental impacts as the legislation for monitoring business CO2 emissions and carbon footprinting draws ever closer. Waste water is also a serious financial drain from factory floor processing. Often used for heating, excess money is wasted by heating fresh water instead of re-using existing by-product sources.

3. Man Power – Administrative tasks for data collection  and processing on the factory floor are often carried out by employees as opposed to using an automated system. This can mean hours of time spent on non-value added tasks for the company, ultimately wasting money. It is important for manufacturers to regularly re-assess their working practices and allocation of work stations for employees to ensure their time is spent on meaningful jobs and not paper shuffling.

4. Inventory Control – The costs involved surrounding logistics and distribution within a manufacturing plant are substantial. On one hand issues can include the optimisation and removal of excess/expired/ unused stock in a warehouse, or alternatively to engineer sufficient agility in manufacturing processes to allow quick changeovers on production lines to satisfy demand with lower finished goods inventory. The downside to having a wide variety of products to produce all under one roof means that a constant financial strain is placed upon the staff and equipment to changeover product lines often & quickly; this is a costly process and without an integrated automation system it can also mean hours of wasted change-over time if not optimised.

There are clear solutions to the above issues which can be provided by an integrated MES product. For example. wasted man power time can be reduced as manual data entry can be replaced by auotmating communications between ERP and the production plant. By providing more accurate data relating to material usage and reporting this information in real-time, an MES system can also provide a more accurate raw materials inventory, allowing a reduction in warehouse stock. Scheduling tools reduce unnecessary product line changes and automatically reduce the amount of natural wastage from the plant. Moreover, re-work costs have been minimized by providing electronic instructions and collection of information to reduce the incidence of operator errors. Batch genealogy recording can also be improved: automatic electronic recording of all information on all batches permits complex reports on each batch without manual overhead. By  monitoring the energy usage of machinery on the plant floor operators and engineers can to determine where energy is being unnecessarily wasted and adjust operating procedures, machine automation and scheduling to minimise consumption.

Revenue growth for a specific manufacturer is closely linked with asset efficiency and operating margin of their plant. The production capacity of a manufacturer must be at its most robust if the issues surrounding revenue growth are to be tackled. These issues can be broken down into four distinct categories:

1. Cost of bringing a product to market – it is frequently quoted that for pharmaceuticals research and development (R&D) costs to bring a new product to market are approximately $1 million a day. Although pharmaceuticals is extreme, the impact of reducing R&D time, even by a matter of days, could have a significant financial impact on revenue growth both in terms of R&D cost, and lost market opportunity.

2. The ability to create a guaranteed supply – Once a product has been successfully launched within the consumer market it is essential for companies to ensure the security of their supply chain and maintain a guaranteed robust supply to distributors. This is a major industry issue as consumers will quickly swap between brands if their regular product is not available. However once this change has taken place, the consumer will rarely return to purchasing the original product. The supply chain must remain robust in order to keep a current loyal customer base whilst still building to increase an overall market share.

3. The ability to sell more of the product – This issue has a direct link with the asset efficiency of the manufacturing plant. Manufacturers can find themselves capacity constrained due to inefficient processing. Production lines must run at maximum efficiency and speed in order to increase overall capacity. The company will then have the scope to accept larger orders and increase their supply chain distribution.

4. The ability to remain flexible in response to consumer demand changes – Often led by top floor promotional campaigns or national media focus, consumer demand for a product can change within hours. For many companies it is essential to maintain flexible manufacturing processes in order to accommodate a surge in demand. Failure to respond to this effectively could lead to a loss of faith from consumers and distributors and subsequently lost revenue as both parties switch to a more reliable supplier.

The key to solving each of the above issues is maintaining efficient and versatile production capabilities within the plant. An integrated MES system will provide the data analysis and tools needed to speed up R&D time when introducing a new product to the manufacturing plant and in turn bringing the new product to market, whilst at the same time increasing supply chain reliability through maximising production capacity. The lack of fully integrated top floor to shop floor systems within the manufacturing sector has historically left a missing link in terms of improving revenue growth from an automation perspective; an MES system can fill this void and enables streamlined manufacturing processes.

An example of an effective MES solution is the Siemens Simatic IT system which allows full integration of all existing IT systems from PLCs to ERP, improved data integrity across the enterprise and a reliable and user-friendly interface for plant operators. This is the most important factor for manufacturers to consider when implementing an MES product, how easy will the system integrate into existing programmes and how difficult will the system be to operate from a factory floor perspective.

An MES solution provides a framework capable of connecting the plant floor with the rest of the enterprise making it possible to integrate the existing systems and manage the business and workflow process to control and improve the plant’s production and performance. However, the full benefits of this advancement in factory automation seem to remain relatively hidden from manufacturers. The business case for MES is a clearly positive one, the benefits can be seen across financial, environmental and productivity angles which all lead to the same conclusion. In order to compete in the ever-changing manufacturing and supply chain industry companies need to embrace the MES solution.