Intersection of lean and mes best practices r rio arc orlando 2008
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Intersection of lean and mes best practices r rio arc orlando 2008
- 1. Intersection of Lean and MES Best P B t Practices ti Agenda Ralph Rio • Research Findings Research Director ARC Advisory Group • Recommendations rrio@arcweb.com rrio@arcweb com This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC.
- 2. Where Lean & MES Intersect Agenda: Lean and MES Trends Best Practice Study Process Survey Results Recommendations 2 © ARC Advisory Group
- 3. Market Trends Is there a connection? Improvement Q4 2005 Q1 2007 g Programs: Lean Mfg. 35% Lean Mfg. 69% Six Sigma 34% Six Sigma 52% Lean Adoption Nearly Doubles TQM 18% TQM 2% TOC 8% TOC 0% 0% 25% 0% 25% 50% 75% MES Market: 2.0 Billions ‘05 to ‘06 Market 05 06 1.5 Forecasted Grew 27.2% CAGR = 14.5% Visibility to Manage 1.0 • Agility 0.5 • Speed 0.0 '06 '07 '08 '09 '10 '11 Source: ARC Advisory Group “CPM Systems Worldwide Outlook for Discrete Manufacturing” 3 © ARC Advisory Group
- 4. Lean and MES Respondent Survey Profile 106 Survey Respondents Revenue Over $1 billion 30% $250 million to Styles of Manufacturing Continuous Improvement Primary Improvement Program $1 billion 18% Program $25 to $250 Batch/Lot 49% Lean/TPS 39% 31% Lean million Assembly 61% Under $25 38% Lean Six Sigma 22% 21% Lines million Continuous 29% Six Sigma 14% 0% 20% 40% Job Shop 21% TQM 11% Primary Industry Packaging Other 12% 20% Discrete 64% No Program 2% 0% 20% 40% 60% Hybrid 23% Sum = 100% 0% 20% 40% 60% Process 12% Utilities 1% For these attributes, the Leaders, Competitors 0% 20% 40% 60% 80% and Followers have similar profiles 4 © ARC Advisory Group
- 5. Scope of Research Lean and MES Dimensions •PPeople l • Processes Production Management • Technology • Metrics Categories C t i • Leader Maturity Matrix • Competitor People Processes Technology Metrics • Follower Leader Best Practices Competitor Common Practices Follower Poor Practices 5 © ARC Advisory Group
- 6. Best Practices Lean and MES People Who is Involved in the CI Program? Internal Leaders Followers Mfg. Support 77% 22% Plant Floor 68% 41% IT 64% 3% Product 59% 9% Development Sales & 55% 6% Marketing Customer 50% 16% Support Recv, Stock, Fully: Over 75% 41% 13% & Shipping Partially: 50 to 75% Accounting of people 36% 9% & Finance 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% Leaders have Broad Involvement 6 © ARC Advisory Group
- 7. Best Practices Lean and MES People Who is Involved in the CI Program? External Leaders Followers Suppliers 59% 13% Outsourced Mfg. 50% 9% Operations Distribution to 64% 3% Customers 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 25% or more Leaders have Broad Involvement 7 © ARC Advisory Group
- 8. Best Practices Lean and MES Process How are Business Processes Managed? (routing, procedures, setup, etc.) Leaders L d Followers F ll IT Systems 86% 16% IT Systems Business Process Mgt. in IT Systems More Detail Written 59% 41% Documents Leader 86% Institutional I i i l 32% 53% Knowledge Competitor 27% Verbal 23% 28% Instruction n Ad Hoc 9% 16% Follower 16% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 25% 50% 75% 100% Primary Leaders Use IT Systems for BPM 8 © ARC Advisory Group
- 9. Best Practices Lean and MES Process If BPM is "Embedded in IT systems", which IT systems? Leaders Followers Production 82% 16% Mgt. (MES) ERP 77% 31% System Automation 77% 25% Systems Custom 68% 22% Application Separate BPM 27% 6% Application 0% 25% 50% 75% 100% 0% 25% 50% Leaders Use IT Systems for BPM 9 © ARC Advisory Group
- 10. Best Practices Lean and MES Technology Portion of Employees who Access a Computer Daily Leader Competitor Followers Indirect 77% 87% 63% Exempt Indirect I di t 68% 77% 41% Non-exempt Direct Labor 49% 51% 25% Non-exempt 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% All have Good Access to a Computer 10 © ARC Advisory Group
- 11. Best Practices Lean and MES Technology Access to Information Needed to Perform their Job Leaders Competitors Followers Indirect 69% 47% 24% Exempt Direct L b Di Labor 72% 43% 35% Non-exempt Indirect 67% 47% 19% Non-exempt 0% 25% 50% 75% 0% 25% 50% 75% 0% 25% 50% 75% Leaders Do Better Application Selection 11 © ARC Advisory Group
- 12. Best Practices Lean and MES Technology What are Your MES Systems? Leaders Followers F ll Custom 86% 5% 25% 6% Application ERP Module 68% 5% e 31% 0% Standalone 68% 5% 28% 6% Application Automation 9% 6% 64% 28% System 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% Current Future Leaders Use More MES 12 © ARC Advisory Group
- 13. Best Practices Lean and MES Technology Bottom line, is Technology an Impediment or Aid to your CI Program? Leaders Followers ERP ERP Leaders Followers Accelerates 32% 6% MES MES Helps 41% 25% Accelerates 77% 9% No effect 14% t 16% Detraction 0% 19% Helps 18% 19% Major M j 0% 9% Impediment No effect 0% 9% 0% 25% 50% 0% 25% Detraction 0% 3% Leaders Followers Major Automation Automation 0% 6% Impediment Accelerates 59% 9% 0% 20% 40% 60% 80% 0% 20% 40% Helps 32% 22% No effect 5% t 9% Leaders Successfully Detraction 0% 3% Apply Technology Major 0% 3% Impediment 0% 20% 40% 60% 80% 0% 20% 40% 13 © ARC Advisory Group
- 14. Best Practices Lean and MES Metrics How and When are Metrics Calculated? First Pass Yield How is First Pass Yield Calculated? When is First Pass Yield Calculated? Leaders Followers FirstLeaders Pass Yield rst Pass Yield Followers Spreadsheet 14% 16% About 15 min. 23% 0% Software All Responses Manually 9% 28% Each hour 5% r 3% Calculated MES 45% 0% y By shift 14% t 6% ERP 14% 3% Daily 14% 16% Automation Weekly 5% y 9% 5% Sum = 87% 0% Sum = 47% System 0% 20% 40% 0% 20% 40% Monthly 14% y 3% Quarterly 0% y 0% 0% 20% 0% 20% Leaders use More Metrics More Often 14 © ARC Advisory Group
- 15. Best Practices Lean and MES Metrics How and When are Metrics Calculated? Overall Equipment Effectiveness - OEE How is OEE Calculated? When is OEE Calculated? Leaders Followers Leaders OEE Followers OEE OEE OEE Spreadsheet 23% 16% About 15 min. Software 23% 0% Manually 9% 13% Each hour 5% 3% Calculated MES 59% 6% By hift B shift 5% 3% ERP 0% 3% Daily 14% 3% Automation System 9% 0% Weekly 27% 6% Sum = 100% Sum = 38% 0% 20% 40% 60% 0% 20% 40% 60% Monthly 18% 9% Quarterly 0% 0% 0% 20% 40% 0% 20% 40% Leaders use More Metrics More Often 15 © ARC Advisory Group
- 16. Best Practices Lean and MES Metrics How and When are Metrics Calculated? Scrap and Rework How is Scrap & Rework Calculated? When is Scrap & Rework Calculated? Leaders Followers p Leaders Scrap and Rework Followers nd Rework Scrap and R S d Rework k crap and Rework Spreadsheet t 23% 31% About 15 min. 9% 0% Software Manually 0% 25% Each hour 0% 3% Calculated MES 45% 0% % By shift 23% 3% ERP 18% 6% Daily 18% 19% Automation Weekly 18% 9% 5% Sum = 81% 3% Sum = 65% System 0% 20% 40% 0% 20% 40% Monthly 23% y 28% Quarterly 0% 0% 0% 20% 0% 20% Leaders use More Metrics More Often 16 © ARC Advisory Group
- 17. Conclusions Embed BPM in Your MES & IT systems Automate Business Processes What are the impediments to your continuous improvement program? p p g Consistency All 106 Survey Respondents Change Sticks nce Embedded Business i Performan Process Manual Business Process Begin Time Analysis Identify Primary Obstacle: 36% “Sliding back to old ways” Improvement Source: Lean Institute Survey of Members 2/04 Change Complete C l t Make Improvement Continuous 17 © ARC Advisory Group
- 18. Conclusions Empower the People who do the Work Involve people throughout the enterprise’s value stream Value Stream Map “Order to Cash” Provide real-time visibility and metrics Why did you buy a MES? Primary Reasons for MES All 106 Survey Respondents Real-time Visibility 59% Flexibility for 39% Changing Demand Identify in real-time Historical Data 34% when and where to “Go and See” Build Based 31% on Consumption Quality/Safety 26% Enforcement Functions for 25% Lean Six Sigma 0% 20% 40% 60% Primary 18 © ARC Advisory Group
- 19. Intersection of Lean and MES Best P B t Practices ti Agenda Ralph Rio • Research Findings Research Director ARC Advisory Group • Recommendations rrio@arcweb.com rrio@arcweb com This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC.