The manufacturing industry is full of incredible technology. Digital transformation, Industry 4.0, and Industrial Internet of Things (IIoT) principles and methodologies are key initiatives worldwide. In fact, there is a worldwide competition to win the 4th Industrial Revolution. So what are manufacturing execution system (MES) solutions and where do they fit in this discussion?
According to Wikipedia: Manufacturing execution systems are computerized systems used in manufacturing to track and document the transformation of raw materials to finished goods.
In the manufacturing industry, any discussion about digital transformation, digital manufacturing, and Industry 4.0 must include MES solutions. MES is central to these discussions and winning the 4th Industrial Revolution is impossible without it.
And the reason is clear: MES provides visibility, information, and metrics of manufacturing operations in real-time. This visibility provides invaluable performance, efficiency, capacity, and quality data that business leaders can act on as it happens—instead of when it is reported to management (if ever) or some other point after the fact. This information includes:
- Machine/Work Cell/Production Line Performance Metrics
- OEE – Overall Equipment Effectiveness
- Inventory/Raw Material Levels
- On-Time Delivery
- Supplier Quality
- And much more…
To exploit this information to its fullest the MES must be connected, in real-time, to the enterprise resource planning (ERP) software. Without this connection, the real-time information remains on the manufacturing floor eliminating opportunities for key stakeholders in the organization to respond.
DELMIAWorks provides this capability by combining MES and ERP in a single, unified database gathering information from the manufacturing floor in real-time to feed the ERP system.
A simple example to illustrate the value of real-time information: When a customer calls for a quote on “X” amount of product by a specific date, how do you know if you can manufacture and deliver on time? What do you have to know to provide an accurate, competitive quote to the customer?
Let’s take a look at four areas: accurate costs of product, inventory levels, current schedule, and manufacturing capacity.
Accurate Costs of Product
Most manufacturers operate their businesses on a standard cost model. Understating a standard cost by only 5% will typically cost a $20 million business up to $700,000 per year. Without MES it is difficult at best to have an accurate assessment of actual costs to produce product.
MES provides critical, up-to-date information for determining actual costs by tracking:
- Raw material consumption
- Actual setup and machine time
- Production rate
Accurate accounting of raw materials and finished goods is one of the most difficult and impactful areas of manufacturing. The MES/ERP approach of DELMIAWorks provides end-to-end visibility of raw materials, demand, consumption and WIP. Whether the materials are in the warehouse, at a work cell or the shipping dock, inventory is tracked and traced during the conversion from raw materials to finished goods.
Current Schedule & Manufacturing Capacity
Can the job fit into the current schedule and be produced by a specific date? Manufacturing capacity determines how much a plant can produce and is determined by three critical factors with respect to machines/equipment:
Overall equipment effectiveness (OEE) is a key metric in determining manufacturing capacity and is calculated using this formula: Availability X Quality X Performance = OEE.
The percent of time equipment is available to produce during manufacturing hours. It is a measure of equipment availability, planned and unplanned downtime.
The percent of good parts produced when the equipment is running.
The percent of performance compared to expected or ideal performance. If equipment is rated to produce 100 parts per hour, is it producing 100, 80, or 65 percent? The average OEE for companies that do not measure it is 40 percent. “World Class” OEE is 85 percent!
By implementing MES and gaining visibility to OEE, a manufacturing company can literally double their manufacturing capacity utilizing their existing machines, floor space, and people.
MES is a critical component of digital transformation, digital manufacturing, and Industry 4.0. A manufacturer using real-time data from MES to drive business decisions is at a distinct advantage over the competition. Knowing your company’s OEE can revolutionize how you meet and exceed customer-driven goals so rather than asking: What is MES and why do I need it? A better question might be: MES: How will I compete without it?
For more information about how DELMIA’s MES and ERP solutions can optimize your business and outpace the competition, contact your local reseller.
Download this white paper Benefits of Investing in an MES Solution to learn how this important technology can use your own real-time data to drive better decision-making to help you transform your manufacturing.