Last month, the industry 4.0 MES4SME test garden started, a test environment for SMEs that want to start using new production software. We are proud to say that Azumuta is part of this project. Industry 4.0 Flanders went to the kick-off and came back with these tips and tricks.
MES4SME is the name of a test project of the Industrial Systems Engineering (ISyE) research group of UGent, in collaboration with Flanders Make and B-Phot of the VUB. The project supports SMEs the next three years in selecting and implementing a MES or Manufacturing Execution System. This is software to improve the efficiency and transparency of production processes. Typical features include planning, tracking and tracing, automatic data collection, and digital work instructions.
The first event took place at Renson in Waregem and attracted more than 130 participants, of which about half came from industrial SMEs. All afternoon and evening they were inspired by fascinating stories from the 20 technology partners and were able to submit their own problems to the specialists.
More than 130 participants were present at the kick-off event.
Determine your Business Case
An MES offers a lot of opportunities. But which investment is the most interesting for your company? Johannes Cottyn answered that question in his presentation at the opening of the event. He is professor at the ISyE research group and project leader of MES4SME.
According to him, these are the seven questions you should ask when deciding on an MES business case.
Batist, CEO of Azumuta, talking about digital workinstructions.
1. Why to Install Production Software?
There are many reasons to invest in production software. Professor Cottyn refers to a study by Aberdeen Group for industrial companies from 2010. This study shows that:
50% opt for an MES because operational decisions are based on incorrect or incomplete data;
37% believe that MES will increase production efficiency;
23% do it to be able to answer customer questions in a timely and correct manner;
22% believe that production data remains underutilized;
21% believe it takes too long to collect production data.
Cottyn also says that the motivation for each company is different. “For example, there are also many companies that want to get rid of paper in the workplace. For efficiency reasons, but also because we attach great importance to sustainability today.”
We attach great importance to sustainability today.
2. What are your Concrete Goals?
The next step is to translate your general motives into concrete objectives. “This can be very different,” says Johannes Cottyn. “You can use an MES to reduce lead time, improve delivery reliability or reduce the cost of unfinished products (the so-called cost for WIP or Work In process, red.). Or you can focus on increasing efficiency or improving quality. In concrete terms, it means that you want to reduce the number of customer failures or complaints.”
Important is the step toward a more personalized and varying production. “In that case, an MES allows you to increase flexibility so that you can switch to new products quickly and respond to changing standards and legislation.”
Also interesting, is using an MES to get more insight into your production. “This will help you understand the potential for improvement and the possible evolution of your business. It will offer you opportunities that you couldn’t estimate at the beginning.”
3. Do you know the Functional Requirements and do they fit within the Long-Term Vision of your Company?
Johannes’s tip: make sure you master the ISA-95 protocol within your company. This is the international standard for the integration of production automation systems. “Depending on your needs, you can determine which software you need. Besides MES, you also have MMS (Maintenance Management Systems, red.), WMS (Warehouse Management Systems, red.) and LIMS (Laboratory Information Management Systems, red.).”
Don’t lose sight of your company’s long-term goals. “The Moscow principle can help, by changing the functional capabilities in must haves, should haves, could haves and won’t haves.”
4. Is your Business Case Financially Feasible?
Okay, now you have a business case. But what about affordability? Cottyn sees three perspectives for this. First, you can try to map the return on your investment based on a return on investment analysis (see points 5 and 6). A second possibility is that you look at success stories and references from your sector.
But calculating alone is not always enough. John Cottyn points to a third angle. “Sometimes it’s just necessary to implement an MES to compete and secure the future of your business.”
During the opening event, companies had the opportunity to present their challenges in the field of production software to specialists.
5. What are the Cost Factors?
Of course, in most cases you want to make a well-founded estimate of the costs. According to Johannes, you can base your costs on the following items:
- Pre- study
- Purchase: hardware, software license, etc.
“It is important that you distinguish all cost items well from each other. The difference between configuration and customization is not easy to map. By configuration, we mean the default adjustments to get the software up and running. Customization has to do with specific interventions to adapt the software to the needs of your company. The more customization, the higher the cost.”
Watch out: New possibilities in the field of production software also determine the business case. Cottyn: “Current solutions are modular, scalable and flexible. You no longer need expensive licenses like you used to. There are both hardware and software pay-per-use models and plug-and-play solutions that can be expanded to suit your needs. This makes the entry much more accessible.”
6. And the Revenues?
Revenues are closely linked to objectives at the start of the project, such as:
- Increased efficiency /time savings
- Decreased WIP
- Faster lead time
- Increased flexibility
- Better quality
- Less paper
- Increased user-friendliness
- Increased delivery reliability
These profits speak for themselves, although they aren’t always easy to quantify. Cottyn points to an additional yield factor that is more difficult to map. “For a really good estimate, you should also include the potential for improvement in your calculations. That is, the future additional revenue you can achieve through new production software. The question is, of course, to what extent you can accurately assess that.”
7. What do you Learn from Recalculation?
If you’ve gone through the entire implementation, according to Johannes Cottyn, there is one more aspect that you shouldn’t forget, recalculation. “Compare actual revenue and costs with estimated revenue and costs. Do the same for the performance of your production process. To do this, it’s important that before implementing an MES you establish a benchmark of the process to be able to compare.”
Want to know more?
Want to get started with production software in your SME? MES4SME is ready for you. Here you will find an overview of all technology partners and contacts.