CDC Factory

MES is not  delivering the dollars

(February 2009)

In a recent  study of 150 food and beverage and CPG companies, AMR Research found no measurable difference between the abilities of MES users and non-MES users to leverage metrics to respond to business challenges. Not a pretty picture for those investing in costly MES systems.

The study revealed, in many cases, that the implementation of MES and a downtime or OEE dashboard had become goals in themselves. I surmise food and beverage manufacturers assumed the mere appearance of a new measure would cause performance to improve, and with it, profitability. This assumption is flawed, as it takes for granted the most important aspect of the task at hand – taking action; doing something with the new information; changing the behavior of people on each and every shift. A project that does not begin with a plan of exactly how to do this from the outset will fail to deliver any true ROI. It used to be OK to pursue such pointless exercises in the past, and the executive suite turned a blind eye to these failures, but it will not be acceptable in the future, nor should it. Profit improvement comes from taking action, not from measurement alone.

In today's recessionary world, we will experience an era of capital preservation and margin improvement action-taking. Manufacturing executives must deliver hard benefits – not assumptive measurement projects.

I have heard it said many times that financial benefits of plant monitoring cannot be estimated until after the investment is made, as the data gathered is what identifies the opportunity; (the classic "chicken and egg" argument). This is nonsense and results in an unfocused data-gathering and dashboard-design jamboree rather than meaningful business activity.

An experienced practitioner knows exactly where to look, can assess the gap between current and future potential operating performance and where the hard savings can be made. This can, and should, be done before anyone spends a dime on software. This should take less than a week unless your advisor is "learning on the job," which is not recommended. A subsequent project should take a fraction of the time you anticipate (think six weeks for an entire plant location, not six months), as you are now focused on a specific operating goal. This can be prescriptive and does not need you to measure everything that moves before you get started.

For plants that stay focused on the money and start with that goal from the very beginning, margin improvements follow.

By focusing on the "money" and not the systems, plant executives, corporate SVP's and hourly paid workers are all unified and have a "bankable" objective the same year they start. They will not end up as a sorry statistic that failed to make a difference.