Reducing risks of MES investments

Nov. 26, 2019
Study Finding: MES systems are proving results in less than three months.

By Darren Riley, strategic manufacturing consultant & digital transformation coach at Dassault Systèmes and chair of MESA International’s ROI Justification Working Group

For the past seven years there has not been a more thorough review of the value and benefit that MES systems and their capabilities bring to manufacturers/producers than the joint study conducted by MESA and Gartner.

The research ensures a realistic portrayal of financial impact that MES brings because it looks in the rear-view mirror of exactly what value and impact has been accomplished, rather than projected benefits.

Here’s a look at some of the findings:

MES systems proving results in less than three months

Perhaps the most consistent results from the joint MESA Gartner study has come in the form of benefits realized. Quality has consistently remained as the number-one business criterion upon which MES systems are justified. MES systems have proven to be able to deliver results in less than three months, including quality metrics and benefits. Visibility of operations, reporting-lag reduction and regulatory and compliance benefits round out the top factors in benefit realization. This is an important factor in demonstrating to stakeholders the ROI of MES investments. 

Operational staff are usually skeptical that benefits can be realized in such a short time. Promises have been made by varying classes of solutions about fast returns. Industries that have different operating margins will track the speed at which benefits arrive; we can conclude that the lower-margin industries, which closely track cost of goods sold, will be in the best position to not only see improved operational velocity but be fully accountable to the ensuing benefits. By looking back at real project performance and results, MESA and Gartner have been able to reduce the risk that plagues enterprise-wide investments such as MES. 

Unleashed value in COE

A second trend that has remained consistent over the past few years depends on the center of excellence (COE) concept. A COE strives to bring a multi-dimensional, cross-functional perspective to MES and MOM deployments. This oversight-and-governance model is seen as requisite for multi-site or global deployment models.

Over the years of the survey, this figure has remained small, with this year’s stats showing only a small percentage (27%) who do not use a MES COE. But best practices in the structuring and daily execution of the COE remain important. The recent survey shows that 81% of respondents indicate there is more value to be seen from their COE.

MESA has developed a detailed guidebook that outlines not only best practices in justification methods and the proper organizational structure of the project team, but also provides a methodology for ideal selection of KPIs and suggests potential benefits that could be realized with a properly trained project team and COE.

By combining the planning and definition guidance from the MESA ROI Guidebook with the most recent results from the joint MESA/Gartner study, a realistic business case can be built for program investments that current stakeholders can rely on and then define for the realization of those same benefits.

Still wary of the cloud

The 2018 research indicates a slow adoption of cloud-based solutions due to the sensitivity of data tied to the production processes. Why? Manufacturers/producers have traditionally wanted to secure these activities and performance to on-premise deployment models. While the cloud may work for CRM, ERP and selected components of PLM, the operational details of quality, production and in general order fulfillment metrics are still held close to the vest.