Three Acronyms that Every Good Production Manager Should Know
2015-11-02
In most manufacturing companies we encounter various IT acronyms – SCM, WMS, APS, ERP, MES, CMMS, SCADA, QMS... And most of us are confused. And that includes experienced production managers. First of all, they have to take care of stable production – to ensure that the products are of a good quality, supplied in a timely fashion, and properly manufactured. This takes time. No wonder selecting the IT system that is truly necessary to accomplish these goals is so difficult.
Because we’re talking about manufacturing information systems and as you may know, each of them has its place in manufacturing. But are they all necessary for you?
The good news is that practically speaking you don’t need anything. Manufacturing can be handled without the support of information systems – but only to a certain extent.
It Begins with Excel...
We frequently hear jokes related to the use of table processors (yes, this is the group in which MS Excel is the most frequently used software for this purpose):
“We have an Excel-lent solution for this...” – i.e., insufficient, not good, and unsuitable. Or “We have introduced a MES System – ‘Microsoft Excel Solution‘!” – i.e., insufficient, not good, unsuitable...
To use it or not to use it, is not the question. The question is to use it for what. Excel applications can do great things and I haven’t encountered a company that wouldn’t use it. However it has certain limitations and when a table consists of thousands of lines and the files consist of dozens of megabytes, several simultaneous users and an endless number of versions, we usually begin to feel that we’ve gone as far as we can go with it.
The First Acronym – ERP
The first need usually comes from divisions in charge of wages, invoicing and accounting – no table processor is sufficient for them. Quite often, this is exacerbated by defining the requirements from human resources, production, logistics and sales – and we have a tender for an ERP system, a system for enterprise resource planning.
“The ERP system is a tool for improving the processes which a company uses for taking orders from their customers and gradually for invoicing and sales; thus it can improve the entire process of contract performance.” (Wikipedia)
ERP is the system at the top level of enterprise management and deals with time segments of months, weeks, days and hours at most.
If we want to make it a bit more complicated, we could add that the supply chain management (SCM) systems, customer relationship management (CRM) systems, warehouse management systems (WMS) and advance planning and scheduling systems are part of it at this level – and frequently a part of the solution package from the same producer...
Selecting an ERP system is no simple task and many companies think long and hard (sometimes more than a year) before they pick the right one. And sometimes the process of adapting to new rules takes even longer than the selection process...
The Second Acronym – MES
After recovering from the ERP implementation and adaptation process, other requirements and ideas for improvements or additions arise. The first steps of the production manager are quite frequently directed to the IT department with a list of requests, “I need to see the current status of orders in manufacturing, I need to know about delays, the number of rejects, the batches we should take from the warehouse first,” and so on.
MES, the system which calculates at the level of minutes up to seconds, is directly connected with manufacturing equipment, collects manufacturing data, evaluates them and provides them to superior information systems (such as ERP).
And here we are at the next level of the manufacturing business. If a production manager wants to monitor the current status in manufacturing, he needs to know the status of manufacturing equipment, material, workers, manufacturing processes, the current status of orders, the maintenance plan and many other factors.
For manufacturing companies, this leads in one of the following directions:
- “Great, we have SAP, we already know how to use it, so lets the maximum use of it in manufacturing as well – let’s use it as much as we can.” – the logical consequence of a previous process when a manufacturer wants to make maximum use of a large investment. And I present the SAP system as a typical example of an ERP system which is the most frequently used worldwide.
This is a very good idea in principle – one supplier, fewer problems. However that means “dragging down” a business system designated for the top level of enterprise management to lower levels, i.e., manufacturing, and forcing it to think at the level of minutes and seconds. This is possible in principle, but it’s like going shopping for a new dress or driving the kids to school in a truck... Moreover, every adjustment to the system means new customer implementation and every ERP transition to a higher version requires the new re-implementation of the actual solution which is usually accompanied with high costs.
- “Let our IT guys do it” – this doesn’t sound like a bad idea either. A skillful programmer from the internal IT team can frequently implement beautiful solutions, through which it is possible to monitor the current status of manufacturing or evaluate the effectiveness of workers. However, this also means allocating time for developing and implementing such solution in addition to the standard tasks of the IT department, and accepting the risk that maintaining not to mention extending or improving this solution in the event of personnel changes might be problematic.
- Separate solutions are implemented for specific requirements – for example, quality management systems (QMS), computerized maintenance management systems (CMMS) and systems for measuring overall equipment effectiveness (OEE). A logical and meaningful solution at first sight. However, this leads to a situation in manufacturing where we have several smaller, local systems from various suppliers, each of which addresses a different problem but is not fully integrated.
The consequences of the first direction usually become obvious when the technical limitations of a given solution or the financial limitations of the company become an obstacle.
The unsuitability of the second direction can become obvious when it takes ages until the given solution is launched or problems occur when a specific employee leaves or when deployment fails completely.
Evaluating overall equipment effectiveness (OEE) is a typical example of how the unsuitability of the third direction becomes obvious. The responsible evaluation of OEE means having detailed information about the causes of outages, qualitative defects and the length of the equipment manufacturing cycle. We also need to take into consideration the ability of the operator to react to individual reasons for outages. You need to know about the equipment maintenance history, the availability of spare parts, and so on. Although this information is available, frequently in different systems or databases (ERP, CMMS, QMS, etc.), it can be quite time consuming and costly to compile and create integral and meaningful outputs.
Choosing the right direction is not simple. However, all of the principles lead to the philosophy of the MES system.
“The Manufacturing Execution System (MES) represents the link between a business information system (such as ERP) and automated manufacturing (technological processes) systems.” (Wikipedia)
The Manufacturing Execution System is designated for that part of the business that production managers need to cover – it calculates at the level of minutes up to seconds, is directly connected to manufacturing equipment, collects manufacturing data, evaluates them and provides them to superior information systems (such as ERP).
A comprehensive MES incorporates solutions for four main areas – manufacturing, logistics, quality control and maintenance, and can often be connected with most separate, already implemented solutions and communicate with them through standardized interfaces.
Thus, a comprehensive Manufacturing Execution System – MES, is another possible direction. However, only the most innovative manufacturing companies choose such procedure today. The opinion of the majority of production managers is that this will be another long and expensive process, like the implementation of the ERP system. This isn’t far from the truth. Several large suppliers have successfully implemented comprehensive and quality MESs usually in large supranational corporations (especially in the automotive industry). Naturally, the prices of such large systems are calculated according to the size of the customers for which they are designed...
The functionality requirement is usually another obstacle – “I only need to know which material in manufacturing is exactly located! I don’t need any complicated MES for that.” – true. A comprehensive MES is not necessary for that, only its part...
Two issues (in addition to benefits) are important when considering and deciding on the building of MES:
- MES can be built gradually, by individual modules, for individual workplaces or assembly lines, or for a selected functionality. If the investments in such gradual building are right, the savings resulting from the individual phases of implementation can be used to invest in the next phases, by which a comprehensive MES will be built which will subsequently maintain a desirable status and make it possible to manage the sustainable development of the company.
- Thanks to local producers, MESs are deployed even in much smaller undertakings than automotive giants. Worries about unbearable costs or the inaccessibility of flexible local support are ancient history.
The Third Acronym – MOM
Instead of MES, we frequently hear about MOM systems today. This acronym has only recently been introduced since its meaning better covers the manufacturing issues. MES is about manufacturing execution, but MOM is the Manufacturing Operations Management system.
To put it simply, MES and MOM virtually mean the same thing...
And so, when deciding on the direction of a manufacturing company it is important to realize that there is no universal method. And it can be quite difficult to choose the right method. External consultants can be very helpful in this respect – especially when they have vast experience from similar companies.
And the goal? the goal should be clear – to manufacture a quality product, to do so in a timely fashion and in the proper way. If this is our aim, any direction that we choose leads to the support of optimized processes with the help of a comprehensive MES/MOM system.
