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Aug 09 2017

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Opportunities and challenges of a manufacturing Center of Excellence

I recently blogged about the annual Gartner MESA survey and how it reveals that most manufacturers do not achieve the full value of their enterprise MES, or MOM systems, because they don’t start with a clear understanding of the value and benefits they are aiming for.

Manufacturers tend to view MES as a financial investment with predictable payback through automation of current operations reducing the cost of goods sold (COGS). This approach generates quick-hit benefits, but it limits the impact of the technology because it fails to enable all the new things that could be done. Enterprise MES should be the starting point, not the endpoint.

Now the latest Gartner MESA survey has come out, and it reinforces these findings. Most manufacturers are still implementing MES in limited ways that prevent them from realizing the high-level benefits such as responsiveness, agility, corporate-wide quality containment, synchronized supply chains, and continuous improvement.

The survey summary states, manufacturers should “look at MES as part of an enterprise architecture, not just as a stand-alone app, and build a long-term business case instead of an immediate fix.”

Ironically, by focusing on immediate financial return instead of the more strategic operational returns, many manufacturers miss out on the full value of their investment.

Transformation, not just automation

By contrast, the most successful manufacturers generate value from enterprise MES not just by automating their current operations, but by transforming them. For multi-plant manufacturers, the foundation of this transformation is the manufacturing Center of Excellence, or CoE. I touched on this in my last blog. Now I’d like to discuss the CoE in more detail.

A CoE is many things. It is a centralized hub where the best practices and expertise of an enterprise are formulated and eventually reside, so companies can set standards for the organization and deploy them consistently to all plants. It can also be a repository and gateway to critical enterprise manufacturing data, an environment for testing new emerging processes, and a tool for discovering, monitoring and disseminating manufacturing improvements.

Most importantly, a CoE that represents a single enterprise operations-based foundation, allows global manufacturers to extend their operational and quality control into the supply chains, upstream into external suppliers as well as internal design and engineering teams. This establishing a stream of digital continuity; the Digital Thread. This same foundation enables a holistic view towards customers and service and repair entities.

This is where the game-changing advantages are to be found. For example:

Quality. How is incoming quality inspection handled in each plant? Is the process the same everywhere, or are there differences? How do you know if you are comparing apples to apples? The Center of Excellence makes it possible to achieve consistency and establish meaningful KPI standards for quality. Then there is the larger question of consistent quality manufacturing across all plants. This can only be done, with real accuracy, with a CoE to monitor and control every step of production, everywhere.

Measurement. Measurement is critical for all operations. Take on-time delivery. Many manufacturers consider this a key metric and constantly try to improve it. But can you see how all the processes, supply chain issues, and other factors relate to on-time delivery? It’s hard to link these factors meaningfully unless you have an enterprise MES managed from a Center of Excellence.

Standard processes versus localization. Local variations are often necessary, but every difference in process creates inefficiencies. Further, where variations occur, it’s important to understand those differences and how they may impact all the other metrics. A CoE provides the control and visibility for manufacturers to manage these variations and ensure that only essential variations are allowed.

Discovery of best practices. Centers of Excellence are not just a way to deploy best practices, they are also a way to discover best practices. Innovations don’t always come from headquarters. Sometimes—maybe even most often—innovations are developed on a plant floor somewhere, by people who are close the problem every day. A CoE that can “harvest” best practices from their sites provides a formal path and policy to discover, “upload”, test, and then methodically deploy the innovation across the enterprise rapidly and reliably.  Industry leaders are utilizing this harvest within their COEs with terrific results.

These are just a few examples of enterprise MES benefits that are not easy to measure by a simple financial formula. They are soft, but strategic.  There are many more, such as quality containment, supply chain synchronization, rapid new prodct/ferature deployment, and design-manufacturing collaboration. While such benefits aren’t easily justifiable by a simple financial formula, they are clearly of major importance to global manufacturers.

Why so challenging?

With so many high-level benefits, why aren’t more manufacturers focusing on Centers of Excellence? One reason is complexity. A CoE is a combination of people, processes, and technology, and it touches on nearly every activity of a global manufacturer. The few examples given above should make that clear.

Yet while this kind of transformation is challenging, it is by no means insurmountable. There is a growing body of expertise and experience surrounding enterprise MES and Centers of Excellence, and how to deploy them successfully. DELMIA has helped many global manufacturers (Valeo and Cummins, for example) transform their manufacturing with enterprise MES technology.

In my next blog, I’ll explore the value and maturity assessment process we have developed at DELMIA over hundreds of engagements to assess, plan, and implement enterprise MES within a manufacturing COE so that the full benefits of transformation can be achieved.

Related articles:
CENTER OF EXCELLENCE: Optimizing key step in realizing MES/MOM operational transformation
The secret to MES success: Learn from experience

Permanent link to this article: http://www.apriso.com/blog/2017/08/coe-article-3/

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