The payoff of MES motivates complex manufacturers all over the world to engage in new initiatives that propel their operations forward. Manufacturing Execution Systems (MES) remain on the top of the list of prioritized manufacturing investments in surveys by both Gartner [4] and LNS Research [2]. Not only is MES on the top of the list, but LNS found that 68% of manufacturers were viewing the MES as part of their enterprise systems strategy.
Fig 1. Manufacturers’ Software Investment Priorities
Why Are MES Investments Critical to Manufacturers?
“When scoped, implemented, and integrated properly with other processes for product supply, MES applications can support growth goals of the business while removing costs and complexity, driving process optimization, improving product quality, and directly impacting the bottom-line.” — Hype Cycle for Discrete Manufacturing and PLM – 2016, Gartner [4]
Leading companies are sharing their MES success stories in surveys, at conferences and press articles, and the word is getting out. A MESA report [5] shows that implementers of MES systems have improved Total Cost Per unit by 22.5%, Net Profit Margins by 19.4%, and On-Time Delivery by 22%. Improvements for MOM users were generally double the average among all respondents.
Fig 2. Manufacturers’ Average Annual Improvements in KPIs
Specific improvements listed by manufacturers in the LNS Survey include:
- Common user interface across the enterprise
- Elimination of duplication of input
- Integrated interdepartmental information
- Platform of interdepartmental collaboration and workflow
- Closed-loop quality management
A similar survey performed by Gartner and MESA International [1] showed that most manufacturers implementing MES had achieved significant improvements within 12 months of implementation. Over a third of the surveyed manufacturers saw results within three months.
Fig 3. Benefits Realized After Investment in MES
Payoff of MES
MES offers immediate benefits that are easy to quantify for the investment payback. However, manufacturers that stop their ROI analysis here risk missing the larger savings and productivity gains that impact strategic business outcomes. For many companies, MES has served as a critical technology linking manufacturing operations with customer and supply chain processes.
As Gartner found out in their analysis [3], the largest benefits of MES come from capitalizing on the visibility it provides into manufacturing performance and capabilities across the organization and supplier network. Participants in a 2015 Gartner study on the value of MES reported that they were investing in MES to drive continuous improvement, eradicate variability (that is, improve quality and compliance) and reduce costs. However, they also realized many more tangible and intangible benefits from the MES implementation the following years.
Fig 4. Benefits Continue After Initial Payoff
Although these companies pointed out that the MES couldn’t be solely credited for all the performance improvements, they highlighted its pivotal role in creating an information environment that accomplished the following:
- Supported integrative and sustainable improvement initiatives by providing continuous performance feedback through real-time information visibility
- Provided the stakeholder visibility needed to manage and streamline the end-to-end supply chain
- Created a sense of ownership and performance consciousness among operations and supporting functional personnel
- Standardized processes across multiple production sites, allowing for resource sharing and flexibility
References
[1] 2017 MESA/Gartner Business Value of MES Survey, Meyer/ Jacobson/Franzosa, Gartner, 2017
[2] The Global State of Manufacturing Operations Management Software – Weaving the Digital Thread Across Industrial Value Chains, Goodwin, LNS Research, 2015
[3] Get the Most Out of Digital Manufacturing by Extending the Value of Your Manufacturing Execution System, Franzosa, Gartner, 2016
[4] Hype Cycle for Discrete Manufacturing and PLM – 2016, Halpern/Jacobson/Suleski/Franzosa, Gartner, 2016
[5] Metrics that Matter and the ROI of MES/MOM, Schwarz, MESA.org, 2016
[6] Has MES Come of Age? (recorded webcast), Fraser/Franzosa, MESA.org with IYNO and Gartner, 2014
