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Focus: Manufacturing

Feature Article from Our Manufacturing Subject Area - See All

From SCDigest's On-Target E-Magazine

- June 4, 2013 -

Supply Chain News: Lack of Clarity on Costs, Benefits Hamper Many MES Deployments


Too Many Companies Buy First, Figure Out Details Later, Gartner Research Finds


SCDigest Editorial Staff

Deployments of Manufacturing Executions Systems (MES) have long had a reputation for being challenged in many cases.

Is that due to the technology itself, or the details surrounding the decision to move ahead and the plan to achieve specific results and benefits?

SCDigest Says:


The research found that use of a COE, common in many other areas of enterprise software, is relatively immature as a best practice for MES.

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More the latter, it seems, based on a recent research note from Gartner analysts Simon Jacobson and Michael Dornan.

The research note and findings were based part of a survey Gartner performed in conjunction with MESA International, a trade group that in part represents the interests of MES providers. Typically, respondents represented large global manufacturing companies of 10,000 employees or more.

"A fuzzy understanding of cost, ROI and business case justification is the largest obstacle to achieving value," the Gartner analysts say. "It contributes toward and creates roadblocks in the form of competition with other IT projects and resourcing issues."

Almost unbelievably, the survey found that 63% of companies said that the biggest obstacle to MES deployment success was that the cost, business case or ROI for the project was not properly understood.

That was true in many areas of supply chain software through the 1990s and maybe early 2000s, but has been largely addressed in most other areas after that. Is manufacturing and MES really so mysterious even here in 2013?

Other barriers to MES success cited as high include "resourcing and personnel issues," and the related category that the MES deployments are "overshadowed" by the IT needs of ERP projects. (See graphic below).

Gartner notes smartly that the lack of clarify on goals and benefits itself may in fact be a prime reason why MES projects struggle with resource issues, as executives put resources where the payback is most clear.

The lack of a "clear understanding of costs and the measurable impacts on business performance that MES will bring are catalysts for other obstacles," Jacobson and Dornan say.

Interestingly, respondents who indicated they are using a "homegrown" MES application seemed to face less personnel and resourcing issues, as these projects tended to use local/site IT resources and be less dependent on central IT staff often caught up in big ERP efforts.


The Largest Obstacles to a Successful MES Strategy




Source: Gartner

(Manufacturing Article Continued Below)



These homegrown systems also faced less cultural adoption hurdles and change management issues, the report found. That makes sense, not only because shop floor workers and managers know the local IT staff, but also the MES developers likely often write the code in a way that mirrors current operating processes, whereas an external solution may come in with a different approach to processes, workflows, terminology, etc.

And perhaps surprisingly, these homegrown applications also seemed to provide better long-term benefit realization than commercial packages, the survey found.

However, those advantages came at the price of application scalability, and the homegrown systems often do not conform with the current manufacturing system architecture within a company.

"MES applications deliver hard-dollar results for local manufacturing operations by attacking immediate cost-cutting and continuous improvement opportunities, and providing a solid nucleus for manufacturers that are trying to drive the performance of their production assets across the extended supply chain," Jacobson and Dornan conclude. "When they fail, it's typically because of a lack of governance, appropriate budget or proper justification. This places an emphasis on creating the right support organization through a center of excellence (COE) that will define, measure, enforce, and improve business results."

The research found that use of a COE, common in many other areas of enterprise software, is relatively immature as a best practice for MES.

Does it surprise you the costs and benefits of MES still are fuzzy for many companies deploying systems? What do you see as the top barriers to MES success?
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