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Dec 11 2012

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Top 10 Reasons Why Manufacturers use Homegrown IT

“If you want a thing to be well done, you must do it yourself.”

~ Henry Wadsworth Longfellow, in 1858

 

Did you know that the origin of the above proverb originally dates back to 1541? To say there is some history with this logic is an understatement. While this type of thinking may still hold true for a “Do-it-Yourself” (DIY) home improvement, it makes less sense for most other tasks, given the complexity and expertise that is now woven into the fabric of our society. For example, you shouldn’t self-diagnose a medical condition – it is better to go to a Doctor instead.

But in the field of manufacturing, there are still those that believe otherwise. These folks believe in a DIY mentality to managing their operations – either by pen and paper – with a spreadsheet, or by writing and maintaining their own software. Given the complexity of today’s products, processes, and regulatory compliance, one might think there is a better way … I would propose there is.

Given the nature of my job, I spend a lot of time on the phone with many different manufacturers. Nearly every week I get the opportunity to meet someone new and interesting, which is great. As part of these interactions, I have spoken with many DIYs, so I thought it might be interesting to list the top 10 reasons how these people (and organizations) justify their actions to implement a homegrown Manufacturing Execution System, or MES:

The Top 10 List

#10 Too much time and effort has been invested to walk away – this perspective can be from either an emotional or return on investment perspective. The question to ask, however, is “What is the opportunity cost of maintaining a legacy system versus implementing a new, state-of-the-art system?
#9 If it ain’t broke, don’t fix it – a rationale that might work if the risk of downtime is limited. However, from a risk management view, if a day or two of downtime is a problem to fix and there is a remote possibility of catastrophic failure then doing nothing is taking a greater risk.
#8 No time to upgrade – this is where it might make sense to evaluate what your true costs are, and what the cost of “less than optimal” performance is actually costing you. How easy is it for you to perform continuous process improvement?
#7 Can’t afford the cost to replace our legacy system – this is similar thinking to #8, with the only difference being a focus on the hard cost of implementation fees versus the soft cost of not having the time to accomplish the replacement/upgraded system.
#6 Out of my control – in this scenario, the ability to make a decision is deferred to corporate. The question I would then ask is what incentive you have to improve performance? If you had a way to increase output and lower costs, do you think corporate might be interested?
#5 Too many systems at risk – this is actually quite common, and is typically solved with “Shadow IT.” Neither of these options are good strategic approaches to growth or an increase in productivity. The risk still exists – even with a “do nothing” approach. The decision is whether or not to be proactive or reactive.
#4 Job security – few will likely come right out and state this perspective, however, I am sure it exists. The problem is not thinking on a big enough scale … if your entire plant costs too much compared to other locations or the competition, everyone may lose their job!
#3 Our needs are unique – so a vendor solution could never work, unless it was so customized that it became akin to what we already have. Here is where the concept of an operations platform should be considered where new upgrades and applications can be readily added to expand functionality. Custom-built solutions inevitably will become obsolete.
#2 We have a single vendor policy – in an effort to save time and costs, some companies establish a single vendor policy. As an unexpected result, when their “single vendor” doesn’t offer an effective MES solution, the manufacturing operations team is then forced to build their own, as the “lesser of two evils.”

And the top reason to implement a homegrown MES is …

#1 You can’t help us to “eat the elephant” – the point here is that the task to implement a new system is just too difficult! We have such a complicated layout and custom modifications that it would be impossible to migrate to a new system. This is the saddest reason of all, as the people who speak it are the ones that most need help, yet, they feel like prisoners in their own job. There is hope! I have seen many situations that have been fixed, which now deliver a level of performance improvement that was never thought possible.

There you have it. This is a list of the top 10 reasons I have heard to keep an existing manufacturing execution system, when asked to consider an upgrade to a new, state-of-the-art solution. What is your situation? Do you fall into the trap of thinking along these lines? Do you disagree? I am eager to hear your thoughts!

Permanent link to this article: http://www.apriso.com/blog/2012/12/top-10-reasons-manufacturers-use-homegrown-it/

5 comments

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  1. AJP McMaster

    A thought-provoking and, I guess, deliberately provocative piece. As application support team leader for a “DIY” MES system I feel obliged to challenge some of the assumptions expressed. For context, the system I “own” controls a wide variety of discrete manufacturing operations for 9 different sites within a region for a large multinational corporation. It was developed specifically for our needs with the help of a large software house some 20 years ago, but has been supported and developed in-house ever since. There are around 2500 direct users and support/development is provided by a team of 5 analyst/programmers.

    We have recently decided to adopt an off-the-shelf MES system from one of the leading vendors as the group-wide MES solution and deployments are underway in plants in other regions which currently have no Enterprise-level MES in place. My own region has been selected as the “centre of competence” for the new system since we have the most experience in MES systems. I think I can therefore offer some opinions on both sides of the debate and I’ll start by saying I don’t believe we’ll ever switch the plants that run the “DIY” system to the off-the-shelf solution – an equally provocative statement perhaps. I’ll explain my thinking and respond to some of the points above:-

    To tick off a couple of the statements above – Reason 2 – a one-vendor policy, obviously doesn’t apply in our case and Reason 4 is irrelevant since the support team for the DIY system would support the off the shelf system if it were installed locally – in fact the team would probably welcome the addition of a more transportable skillset onto their resumes/CVs as well as the novelty of using a new system. Reason 6 “out of my control” is true to some extent since the final decision on adoption of the group-wide solution was taken by corporate HQ, however we participated and influenced the decision-making process as our experience was recognised and valued. The assumption that simply switching to an off-the-shelf solution is bound to lead to increased output and lower costs compared to any DIY solution is not supportable. (In fact quite the reverse in our particular case)

    Our needs are unique (No. 3) surely applies to almost every manufacturing plant of any scale, since production processes and installed plant and equipment are continually upgraded and changed. The question is how well the requirement can be met with generic/configurable vs highly customised/bespoke solutions.

    Several of the comments in the original entry seem to assume that a “DIY” solution can only be “less than optimal” or not “state of the art”. This may be true if the DIY solution is never developed or kept up to date. I make a point of regularly benchmarking our in-house solution against the MES marketplace and NEVER find myself thinking it is being left behind. This is backed up by external audits by people with long and wide-ranging experience, who assure me that our system is one of the most integrated and capable they have seen.

    We have very little downtime related to the application software (which could be luck or good design), but we have the reassurance of having a team permanently on-site ready to deal with any such issues. The design and architecture of the system is such that resilience and disaster recovery are at least comparable with off-the-shelf solutions.

    Time to upgrade, cost of upgrading and “Eating the elephant” would be real issues, but not for the reasons outlined in the original piece. The cost of changing systems is not primarily the software fees and ongoing licencing but the cost of disruption to production and retraining of the users (in our case thousands). The problem is made more severe by the fact that our production activities mix multiple customer contracts so the choice for a change of systems are:-
    “a big bang” – too risky to production and requiring massive peaks in resourcing
    contract by contract – handy to implement for ERP, but a nightmare for the operations personnel (if it’s this contract it’s the “new” MES, but that contract is still on the old one)
    cell by cell – difficult to implement, problems with work flushing through the systems and while OK for the shop floor users, a nightmare for factory managers (half my factory is on this system and half on that)
    An interesting comment on cost is that so far a (still incomplete) deployment of the off-the-shelf system at one plant has cost almost as much as the TOTAL cost of running and developing our in-house system for the last 10 years – Luckily the ROI comparison will be between the new system and continuing with no system, rather than the new system vs the “DIY” system.

    Off the shelf systems do have advantages – For most there will be at least some pool of talent with experience that can be hired as required, whereas an in-house system relies on the experience of the support team and good succession planning/training (in our case we are lucky to have very low staff turnover)

    For me the key advantage of the in-house approach (based on 20 years of operation) is that we are in control of the development of the system and can set our own priorities and respond appropriately to the customer’s demands (meaning the internal customers – business operations). Experience with requesting tweaks to off the shelf systems is that these are costly and lead times can be a problem – assuming the vendor will even consider making the change.

    Why will we never change our local plants to the off the shelf system?
    As long as we continue to support and develop the in-house system it will always provide a more tailored and lower cost solution so that we could never build a business case for the massive cost and disruption of tearing it out to replace it with something else that would do more or less the same job (and probably less, at least initially). This is the real reason why “legacy” MES systems are hard for off the shelf vendors to supplant – They have to be going pretty badly wrong before that business case makes sense.

    So in summary – there are pros and cons to either approach, a well-designed, continually developed in-house system can be effective compared to an off-the-shelf solution. If you don’t already have a “legacy” MES system, an off-the-shelf solution is almost certainly your only sensible choice.

    1. Angela Regan

      Thanks for your feedback. My only point to add is the fact that clearly you are investing considerable time, effort and resources in maintaining and improving your own DIY system. And, you are most likely taking time out to research what new developments are occurring the manufacturing software industry so as to ensure you don’t slip behind in your capabilities. The decision to continue to “DIY” assumes your organization sees this activity and investment as paramount to your competitive advantage and continued operational excellence. If not, then perhaps further evaluation is warranted.

  2. Angela Regan

    I honestly can’t estimate what percent of manufacturers use a custom MES application, it’s probably impossible to measure, but based on my interactions I would guesstimate in the range from 25% – 40% of manufacturers rely on homegrown systems.

  3. Debashish Gupta

    This Blog is really Good and reflect the true culture of MES Program managers across the World.
    But any idea on how much % of manufacturers (Industry/sector wise) are still working on Home grown MES ?

  4. Werner K.

    This blog is a real good reflection of restricted beliefs which might be drawback for understaking steps towards a new generation Manufacturing system. Great checklist to change the mindset and set oneself up to optimize on a plant or enterprise level operation processes.

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