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                                                                              Scoping MIS and MES for ROI
                                                                                                                                        by Petrus Klopper, ITMatic




In calculating the ‘ideal time’ to migrate it has been suggested that instead of a reactive strategy, other value-adding opportunities should be
investigated.




Over the last few years we have witnessed                    apparent and a shift be witnessed from product       transparent information that allows for informed
how the traditional automation suppliers                     to complete solutions.                               decision-making. If it is integrated to the business
have matured in their offerings in the field of                                                                   system then costs and planning information
                                                             Client perspective
manufacturing execution systems (MES) and                                                                         along with other traceability functionality is also
management information systems (MIS) and how                 The first concept to understand is that each         usually required. Most clients normally have too
they also have attempted to create awareness                 client has specific business drivers or needs i.e.   many KPIs. The second problem clients face
of these systems. The main challenge in selling              to increase throughput and quality, to reduce        after working out what is required is attempting
these systems is to prove a significant return on            scrap, inventory and costs applicable to them        to motivate the new “system” or change by
investment (ROI). While most clients are starting            which impact directly on their “logistic and         calculating the ROI even when the best business
to see the business benefits behind the concept              manufacturing strategies”. Conformance to            case templates are used. It is important to note
of MES/ MIS (integration of business system to               the business drivers are normally measured by        some clients find they only need to change their
real-time systems), we are of the opinion that the           implementing key performance indicators (KPIs).      production processes to receive instant gains
first step is to understand the client’s needs. The          Again different levels of maturity exist, ranging    while others need significant change or even
reason for this is that while the awareness phase            from where no system or even automation exists,      a new production unit. Since ROI = (benefits –
has passed, the next obstacle is choosing the                up to where detailed spread sheets have been         costs)/costs x 100 it is often difficult to measure the
correct product that will meet and exceed the                in use for the last decade, containing a wealth of   exact benefit the change will bring. Also indirect
requirements by implementing it properly. Only               intellectual property. Another scenario is the use   costs often make the best idea impractical to
after system integrators start to focus on specific          of a paper-based system containing production        implement. The third problem a client faces as
industries and truly try understanding them                  data. Based on our experience, most clients          part of the ROI calculation is to determine which
will differentiation and market domination be                need validated data translated into real-time to     product provides the closest strategic fit to user
                                                                                                                  requirements.

                                                                                                                  This requires an in-depth knowledge of “best
                                                                                                                  practices” and attempting to identify the
                                                                                                                  ideal “blueprint” or partner who already has a
                                                                                                                  solution. Ultimately, depending on the logistic
                                                                                                                  and manufacturing strategies, the client will
                                                                                                                  have to decide if the need is to simply integrate
                                                                                                                  existing systems or to merely implement MIS or
                                                                                                                  to go ahead and implement a fully-fledged
                                                                                                                  MES. The final issue a client faces is to address
                                                                                                                  the issue of supporting the new system. The
                                                                                                                  reason that this is an issue is that over time this
                                                                                                                  will become core business and will often require
                                                                                                                  a multidisciplinary approach; especially when
                                                                                                                  continuous improvement activities are launched
                            Fig. 1: Demand for integrated industrial solutions (IIS) .                            that require modifications to the system.




EngineerIT - January 2007                                                                                                                                             61
                                                    Supplier perspective

                                                    Automation suppliers venturing into MES and
                                                    MIS have mainly three issues to contend with
                                                    - competition, trends and partners. In terms of
                                                    competition, since they are normally new to the
                                                    market, they need to compete with established
                                                    players who supply niche solutions (not products)
                                                    that either form part of, for instance, business
                                                    intelligence (BI) or one of the other typical MES
                                                    functions. The second issue, trends, is related to
                                                    the fact that products are still reaching maturity
                                                    and are very much dependent on market take-
                                                    on of the industry as a whole along with the
                                                    adoption of “best practices”. This is reflected
     Fig. 2: Supplier driver: break even analysis
                                                    in the fact that for instance a part of the S95
                                                    standard which forms the base line of MES is still
                                                    being revised and is still in draft form. Also different
                                                    concepts such as OEE and even networking are
                                                    impacting on the design. The third issue affecting
                                                    the suppliers is the correct choice of partners. If no
                                                    partners are available then suppliers are forced
                                                    into the integrator space in terms of consulting,
                                                    implementation and support. This again makes
                                                    it difficult to get an objective, independent
                                                    opinion on the maturity of a specific module or
                                                    component in the suite.

                                                    System integrator (SI) perspective

                                                    The final perspective to consider is that of
                                                    implementation partners. They face only two
                                                    challenges - understanding the process to be
                                                    followed implementing MES / MIS and acquiring
                                                    the correct skill set to be able to implement. If the
                                                    SI does not understand the methodology then
                                                    the estimates made during the ROI phase will
                                                    most likely not be met, resulting in a mis-delivered
                                                    project, negative publicity for the supplier and an
                                                    unhappy client. The challenges surrounding skill set
                                                    is to have access to the correct types of people
                                                    typically required for these types of “BI” projects. If
                                                    the correct people are brought together they will
                                                    soon realise the need to develop a method to
                                                    allow for faster engineering, even across different
                                                    product suppliers.

                                                    Conclusion

                                                    The common denominators across all the different
                                                    perspectives are:
                                                    • Understanding the client’s needs,
                                                    • Understand what product offers the best strategic
                                                      fit and
                                                    • Understanding that partnerships are vital for
                                                      success. Hence in our opinion the first step before
                                                      trying to determine the ROI is to really document
                                                      user requirements.
                                                    Contact Petrus Klopper, ITmatic,
                                                    Tel 082 559-7437,
                                                    petrus.klopper@itmatic.co.za ☐


62                                                                               January 2007 - EngineerIT

								
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