We are often asked to help justify Manufacturing Execution Systems (MES) solutions in order to get capital approval to move forward. This is a monumental task because MES systems are very difficult to justify on hard savings.
One of the reasons MES solutions are hard to justify is they help you with many “soft” improvements. Deming said “You cannot improve what you cannot see.” MES solutions help you see what you need to improve, and help you systematize your improvements. What is that worth?
Here are some practical items you can focus on for your justification:
1. What manual data collection can be eliminated? What does that cost in real labor? Not only in the people collecting the data, but those the scrub it, chart it, report it, and debate its accuracy. (Reduces Cost)
2. What “oops” problems could be eliminated with more synergy in the manufacturing process? Wrong labels on parts or containers, shipping product that had questionable parts/processes, quality spills, adding value to known bad product? (Reduces Cost)
3. Could you increase velocity or agility if you could manage complexity and proliferation of your products? Would you still have to hire extra expediters? Would you have to build the new line? Would you be able to take on more work? (Increases Revenue)
4. Could you provide better visibility into your operations for your customers? What would better customer service do for your relationship with your existing customers? Would they give you more work? (Increases Revenue)
5. Have you had a quality spill you can quantify? What did it cost? What if you could eliminate or reduce the cost of the next one? (Reduces Cost)
As I write this, I think this post could be turned into a multi-part series… Feel free to contact me if you need more ideas for justification.
I led development and implementation projects that utilized active RFID tags to store the recipe and the current status of the product has it traveled through the manufacturing process. This project was completed in three large diesel engine manufacturing plants. The benefits of this automation were instantaneous. The manufacturer is now able to build to order instead of in batches, quality improved significantly due to the programming of failsafe logic and the integration of that logic with the recipe information stored on the RFID tag, and visibility of WIP increased dramatically.
Has your company worked with RFID technology and have you found the ROI to be less than one year? Do you see more manufacturers looking to RFID technology for improved throughput, improved quality, increased flexibility, and improved item tracking?
Kevin - this wouldn’t have been while you were employed by Premier Solutions here in Indy would it? Interesting that you would find this blog and comment!
To your question: Yes, we have done some RFID and other Direct Part Marking projects and have found the ROI to be good.
I think this is the way the world is going, being able to track and trace parts anywhere in the supply chain. Hope to meet you someday!
-scott
Yes it was. Do you know Dave Pecenka or Tim Doak? I also worked with Shari Wilson while at Premier. She has been an IT project manager at Cummins for several years now.
I also did some work using Cognex cameras to read serial numbers stamped on engine blocks and other parts. We quickly discovered that the RFID was more reliable. The trick was finding the space to mount the tag and the reader/writer. I worked with International on a pilot to use RFID on cranks. We found a tag that would work but the challenge was figuring out how to get the tag off the crank and back at the start of the line in an efficient manner. We used a closed loop system for the RFID tags due to their expense. We could not devise a cost effective process so we reverted to using a Cognex cameras to track the cranks.