Apr 05 2012

Lean Success, Part 3: You Won’t Stay Lean if You Can’t Enforce It

I don’t know how many times I’ve heard this story. A manufacturer invests hundreds of thousands of dollars in Lean initiatives, hires consultants, works for 6 months to make vital and profitable process improvements, and then … the project winds down, the consultants leave, and people slip back into their old habits. Most if not all of the benefits are lost, despite the hard work and investment, because the process improvements couldn’t be embedded and sustained with how the work actually gets done.

This brings me to my third key to Lean success: Enforcement. (My previous blogs covered the first two keys, Completeness and Measurability.)

How can you ensure that your Lean procedures and continuous process improvement initiatives will be followed? While training programs and corporate manuals may provide a sense of accomplishment, they can’t actually enforce the consistent practice of Lean behaviors necessary for success. Instead, Lean succeeds when the enforcement is embedded directly into the processes, through such mechanisms as automated directed manufacturing, reviews and signoffs. Workers can then be guided through new procedures, reinforcing new behaviors until they become habits.

Here is the challenge: embedding enforcement is not easy if you’re manufacturing IT systems can’t support frequent process changes. This is what we typically see with older manufacturing execution systems, which typically require a software change and / or a new release of the software to incorporate change. Often changes must be made in multiple “point” or departmental systems for processes that cross functional boundaries – for example, a quality inspection embedded in a manufacturing process, resulting in further challenges and delays. To make matters worse, if you have multiple plants running different manufacturing or paper-based systems, as most enterprises do, then your initial Lean process improvements may need to be done manually, as a way to test for improved results. Even if the results are stunning, rolling these improvements out across your enterprise is nearly impossible. If you cannot quickly share the fruits of your Kaizen events across all sites, you’re losing a huge part of the value of your Lean initiatives.

On the other hand, if you have a global manufacturing platform that enables you to model, execute and share your business processes, then you can easily standardize best practices spanning departments and locations. This puts you in a whole different ballpark.

As I discussed in my first post on this subject, if you can make process changes quickly, with minimal burden on your IT department, then you can create a virtuous circle with the business users. When process improvements are rapidly adopted into the manufacturing systems, plant workers get more engaged and are more likely to bring forth more improvements. The next step is to drive those improvements out to every plant and worker in a way that can be monitored and enforced seamlessly.

I would propose that this is the real key to Lean success. In the end, a great idea doesn’t count for much if the improvements can’t actually be executed and sustained. Microsoft makes this point in their white paper, The Importance of Manufacturing Visibility: “Remember, though, that manufacturing visibility is merely a tool to achieve business objectives. Although visibility can gauge the progress of operations … the real work still occurs on the plant floor – and in the minds of employees dedicated to improving that work.”

There’s no better way to be sure that employees follow procedures – and ensure the success of your Lean investment – than by embedding automated enforcement into your operations throughout the enterprise.

Permanent link to this article: http://www.apriso.com/blog/2012/04/lean-success-part-3-you-wont-stay-lean-if-you-cant-enforce-it/

Apr 03 2012

Product Traceability: Beyond WIP to Ship

I just read an article with an update on a product recall for defective airbags. The recall covers the 2001 and 2002 Accord, 2001 to 2003 Civic, 2001 to 2003 Odyssey, 2002 and 2003 CR-V, 2003 Pilot, 2002 and 2003 Acura 3.2 TL and 2003 Acura 3.2 CL. Here is the challenge: 640 of the inflators are currently unaccounted for. Some were sold as service parts, meaning that their whereabouts cannot be easily traced.

According to the article, “Because Honda is unable to determine the specific vehicles that may have received the affected service parts through existing information, Honda will inspect approximately 603,000 additional vehicles and replace those parts as necessary.”

I commend Honda on doing the right thing with their thoroughness. At the same time, I feel bad for them as I know this non-value exercise could have been avoided. An additional 600,000 vehicles must now be inspected to locate 640 defective parts, which is really a painful (read expensive!) solution to a problem that didn’t need to be so complex.

After reading this article, I had a few thoughts on product traceability, so summarized as three takeaways:

  • WIP-to-Ship Visibility Isn’t Enough – Whether an OEM or Supplier, this level of product awareness simply doesn’t provide the breadth of genealogy and traceability data or capability necessary to support today’s more stringent regulatory environment. With today’s extended supply chains, it is necessary to think of traceability from an end-to-end perspective, along the entire lifecycle of your product, including service actions occurring after production is completed. In the U.S., the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act requires vehicle manufacturers report information related to defects, reports of injury or death related to their products, as well as other relevant data in order to comply with “Early Warning” requirements. Investigations routinely encompass the entire supply chain, including the Tier X supplier products and operations. The mid-level manager at a global supplier who recently said “their traceability requirements encompassed only WIP to SHIP” needs to wake up!
  • Low Cost Isn’t Enough of a Competitive Differentiator – Global competition for automotive supply contracts creates a need for differentiation beyond just low cost. A supplier that can demonstrate comprehensive traceability of both part and process data within their operations, and across the global supply chain, positions themselves as a vendor who can protect both theirs and the customer’s brand reputation. Or, stated differently, saving $1 per part on an airbag may be lucrative and cost beneficial up front, however, if I have to pay for a recall of 600,000 units to inspect every one for a possible defective part, then any savings (plus a lot more) from the price reduction of $1 just went right out the window.
  • Pay Less Upfront or More Later – The inability to precisely identify components is exponentially more costly when done after the fact, versus implementing a global traceability and genealogy solution. The article I mentioned earlier is an obvious example of how this adage is accurate. Because Honda can’t identify the remaining 640 vehicles, they will have to physically inspect a vehicle population over 1,000 times greater than the actual size of the problem. The resulting financial penalty is huge for their lack of traceability data.

 

In conclusion, let’s not forget that the cost for such an ordeal is not limited to just performing the physical inspections. Existing Honda customers must be inconvenienced by having their vehicle inspected as part of this process. And, as they have their vehicle inspected, some customers will undoubtedly be wondering how this could have happened, and start wondering about what else might be next. It is human nature to personalize these types of events and question what might also go wrong, which leads to brand integrity issues, employee moral issues and so forth. Bottom line is that this type of broad, nationwide recall for vehicles manufactured over a decade’s time must be avoided at all costs. The best prevention is making the necessary upfront investment.

Permanent link to this article: http://www.apriso.com/blog/2012/04/product-traceability-beyond-wip-to-ship/

Mar 28 2012

Why “Go Global” with Manufacturing Operations Management?

Over the past several years I have worked with many companies trying to evaluate how to implement a global manufacturing operations management (MOM) solution across all of their plants. These companies quickly discover that this highly strategic choice impacts multiple operating units, departments and people. This decision will ultimately determine competitive relevancy in areas such as how quickly they can respond to change, how well new products are scaled into full production and how cost effectively manufacturing processes are managed on a global basis.

But why are these companies still seeking to achieve such competitive differentiators? Most of them have already invested 10s to 100s of millions of dollars on ERP, SCM and other enterprise solutions. Could they not achieve such capabilities through the deployment of these solutions? Did they not gain the competitive differentiation they were seeking through these investments? Unfortunately, in most cases the answer is “no.”

Achieving visibility into, control over and synchronization across manufacturing operations is probably the most sought after outcome from deploying a global MOM solution. It also provides the most compelling value proposition. Some members in the companies I work with feel that they have already achieved these capabilities. In reality, it is more a matter of degree of the time and detail that now exists.

For example, most companies know their inventory and production capacities on a monthly basis. But does this really help the sales person trying to win a competitive bid? In most cases, it doesn’t. These decisions are often needed quickly. Can the order for a particular product be delivered on time and at the right price, in order to win the deal? Real-time visibility into global operations and understanding the enterprise’s production and inventory situations at any time enables profitable decisions to win new business and satisfy current customers.

Visibility is just one consideration when deploying a global manufacturing solution. Control of operations is just as important. Suppose you see an issue in meeting the requirements of a customer order. Either a shortfall in inventory, limitation of production capacity or delivery cost constraint. It is only through being able to change or control what you see that you can truly possess a competitive “leg up.” Multiply this benefit across many plants and quickly becomes clear the potential upside for implementing a global platform-based approach to manufacturing operations management.

One of the clients I have had the pleasure to work with is in the process of improving their global visibility and control over the processes that actually drive their operations. With this control, they plan to make informed decisions on what to make where, and when, based on the demand they see in the market and the understanding of their enterprise-wide production and delivery costs. This is an important distinction. Manufacturers looking to optimize their global operations should consider in terms of what level of visibility and control they require to be competitive in today’s global markets. I believe that many will find out that the level provided by ERP and SCM solutions does not give sufficient competitive advantage to win in today’s environment.

If you are a global manufacturer supplying many different components to multiple clients located all around the world, it might be a good idea for you to consider what processes you need visibility and control over. A solution that enables more standardized processes across all operations will pay a hansom dividend in many ways, including greater efficiency, higher quality and lower costs. These all seem like excellent objectives and worthy consideration when choosing a global approach to manufacturing operations management.

Permanent link to this article: http://www.apriso.com/blog/2012/03/why-%e2%80%9cgo-global%e2%80%9d-with-manufacturing-operations-management/

Mar 22 2012

5 Benefits of Manufacturing Process Intelligence

Late last year Apriso launched a new manufacturing process intelligence product we refer to as MPI (software vendors hate to spell out long words). The launch and subsequent market interest in this product has been interesting. From a personal perspective, being the product manager responsible for managing and driving acceptance of this product has been a great experience, one that I have learned a lot during the journey.

Now we are six months into the launch, I thought it might be helpful to document some of my findings so far. As time goes by, who knows, maybe I might even publish a full length paper providing further details and explanations. For now, here is a highly condensed list of just a few top benefits that seem to be universally agreed upon, which is driving considerable purchase discussion, as a complement to a manufacturing execution system.

The five top benefits of MPI are as follows:

 

  1. Out of the box analysis – along the lines that simpler is better, we spent the time to ensure industry standard KPI’s are instantly available, so this helps to justify the time to break even; no costly Business Intelligence (BI) project is required to unlock functionality
  2. Fast integration – as MPI is built on the same unified data model and process framework of FlexNet, the implementation time is pretty quick; data is fed directly from FlexNet, so time to value is considerably condensed, giving users immediate benefits
  3. The power of intelligence standardization – the value of knowing you are measuring performance across sites based on the same measurements standards and metrics is very powerful; knowing that these measurements are all based consistently on best practices is even better!
  4. Essential visibility for new product introductions – everything about launching a new product is difficult, from design to engineering to production; any product that can help to simplify and accelerate this process is seen as a win
  5. Less reliance on IT – we all know that everyone is very busy today, trying to do more with less; IT departments are no different; often it is tough to get visibility into operations intelligence and reporting; MPI removes this constraint by giving the operators total control on what to measure, when and how

 

Hopefully the above list helps to clarify why better visibility into your manufacturing process intelligence really is a good thing. In fact, after having seen and learned what I have experienced over the past six month, I have to ask myself “why didn’t we launch this sooner?” :)

Do you have a story to tell? It would be great to hear from you!

Permanent link to this article: http://www.apriso.com/blog/2012/03/5-benefits-of-manufacturing-process-intelligence/

Mar 20 2012

Can You Achieve Global Growth With Disparate Manufacturing IT Systems?

Global manufacturing companies face many challenges. From an IT perspective, few are as tough as effectively managing a systems infrastructure with a mix of legacy and home grown applications spread across many plants. As emerging BRIC markets have grown in strategic importance, manufacturers need a cost-effective, scalable IT strategy to transform their manufacturing operations to better manage on a global scale.

 

Approach:
Visionary IT leaders are implementing solutions to enable improved global coordination across multiple sites. The rewards are substantial.

According to recent research conducted by the Aberdeen Group, best-in-class manufacturers achieve +5% higher operating margin vs. plan, 98% on-time and complete shipments and 86% successful new product introductions, the highest of their peers. These industry leaders understand the need for greater agility and process integration across their IT infrastructure.

One approach to simplifying a process framework (from an IT perspective) is to consolidate databases into one unified data architecture. In non-IT speak, this means your applications share a platform so data can be readily exchanged and extracted quickly, easily and consistently. Traditional point solutions don’t operate this way.

It is not uncommon for plants to have different applications by function [i.e. Resources, Quality, Logistics, Production and Maintenance]. Each of these applications operates on its own database and message BUS. This approach doesn’t work well if production is spread across a multi-plant environment.

In order to achieve improved company and operations execution integration, it is beneficial to create a single DB process-based solution embedded across all sites. Companies can then centralize, standardize and streamline their overall IT and business processes. This capability is now an embedded component of every one of Apriso’s FlexNet applications.

Similar to the strategic enterprise platform of ERP systems that focused on replacing disconnected enterprise applications, Apriso built a unique platform for manufacturing operations management that supports a standards-based, certified integration between operations and a company’s strategic enterprise platform. This innovation was made possible with three “adaptive technologies”:

 

  1. Native Business Process Management (BPM) – to visually model best practices and store these change-ready processes in a centralized process library
  2. Service Oriented Architecture (SOA) – to allow flexible integration to business systems inside and outside the fire wall, and
  3. A unified data model – to support end-to-end process standardization

 

I recently joined the Apriso team. So far, I am impressed with how these three adaptive technologies can make such a big difference, and help so many global manufacturers to synchronize their IT and operations processes across so many different manufacturing models, equipment infrastructures and cultural divides. In the end, we all speak the same financial language – improving manufacturing efficiency and customer satisfaction, enhancing quality and compliance, accelerating innovation and increasing return on business systems while reducing manufacturing IT costs are each of our objectives, regardless of what country we reside and what native language we speak!

Permanent link to this article: http://www.apriso.com/blog/2012/03/can-you-achieve-global-growth-with-disparate-manufacturing-it-systems/

Mar 15 2012

“But I Thought We Had Global Trace and Genealogy!”

Manufacturing executives are usually surprised to discover they don’t have the global trace and genealogy capability they thought they had. This shortcoming is typically revealed at the worst possible moment – when a product failure leads to a massive recall or the FDA shows up. Detailed reports are needed, but are nowhere to be found.

How does this happen? For some manufacturers, it is because they rely too much on their ERP system and the manufacturing information data that is rolled up into it. Unfortunately, by the time this information is aggregated, it is not nearly granular enough for a typical manufacturer that operates across multiple plants located in different global regions. ERP was never designed for manufacturing detail. It was designed for corporate oversight. But manufacturing intelligence detail, and huge amounts of it, is exactly what is needed for global tracking and genealogy.

To take a simple example, if you discover an out-of-spec supplier material that must now be recalled, you might have to perform a recall on all of your production for the past few cycles – throwing the “baby out with the bathwater,” so to speak. On the other hand, if you have a complete, detailed genealogy for your entire manufacturing value chain that is readily available, ideally in real-time, then you can drastically reduce the size and impact from such a recall. Information that is tracked down to the shop floor worker, by shift, could be even more powerful to help spot trends, to learn if a process fix is also needed as part of this quality issue.

Unfortunately, the devil is in the details, and those details are getting very hard to track in the modern manufacturing world. Different plants in different regions likely have their own repositories of information. Even for a given plant, there may be multiple data sources – one for production, another for warehouse and another for suppliers. By the time all this is aggregated at the corporate level, there is little visibility or accuracy left. And, this data will most certainly not be available quickly, when you are in a panic trying to put a lid on the fire drill you are dealing with.

Next post I’ll give you a few criterion to help determine how your current system and processes compares to best in class solutions.

Permanent link to this article: http://www.apriso.com/blog/2012/03/%e2%80%9cbut-i-thought-we-had-global-trace-and-genealogy%e2%80%9d/

Mar 13 2012

Q&A Update: Mobile Perspectives in Manufacturing Operations

Question and answer interviewToday Apriso announced FlexNet for Android operating systems, a FlexNet application that unlocks visibility into manufacturing operations from the convenience of an Android-enabled mobile device, such as a phone or tablet. I had the opportunity to sit down with John Fishell to get a better perspective on what activity is happening in the marketplace to justify this latest development effort by Apriso’s product development and management teams. Below is a summary of our discussion:

 

Q. John, can you tell us what the driving forces were behind Apriso’s release of this latest FlexNet for Android devices?

A. Tom, the last time we spoke about this topic in the third quarter of 2011, the focus was really about the need for increased mobility when actually doing maintenance and quality management activities. Workers needed to be “un-tethered” from their desktops for greater movement around the shop floor. Today, agility is still important, but in addition, we are seeing people talking about putting in a $500 tablet at a work station that can do all the features and functionalities of a system that might have previously cost $2,000, with a traditional desktop. Hardware maintenance can be simplified too … if there is a problem, it is often easier to simply discard it, with the lower price point of tablets today.

 

Q. What about the strong market share Apple has achieved … do you see the same dominance on the manufacturing shop floor?

A. As you know, we released FlexNet for iOS last year. The demand for that product primarily came from early adaptors. What we are seeing today, however, is that some manufacturing applications are being written in Silverlight and Flash, so they won’t run on an Apple device. This decision has forced manufacturers to consider other hardware platforms running Android, such as those provided by Motorola, Samsung, Sony and Toshiba. When Microsoft comes out with a tablet device in the near future, there is definitely a market for them to pursue.

 

Q. Do you see any durability issues with the expansion of tablet PCs on the shop floor?

A. There has actually been a few announcements around more rugged tablet PC models designed to work in more challenging environments, including retail and warehouse spaces. Motorola announced a rugged tablet in the fourth quarter of 2011; other manufacturers are now following suit. These more rugged devices run on the Android operating system, so it began to make sense for us to expand our mobile capabilities and support Android.

 

Q. How about using gloves with a touch screen device … will that work?

A. As you know, FlexNet allows user interfaces to be easily designed and configured to meet the varying roles of our users. Those employees wearing globes are simply provided screens with large buttons. Some interesting developments are also now coming available, including “touch screen gloves,” specifically designed to pass through the necessary “touch” to activate a touch screen. This is a capability that was also required by the military, so trust me, this issue has been addressed!

 

Q. So, it sounds like you are now more of a believer?

A. Yes. I have to admit my first inclination was that this would be a short fad. After all, the tablet is hardly a new device – they have been around for nearly 10 years now. What has changed is the price point. And, today’s advanced application delivery models and social media components are really starting to add a lot of value to manufacturing organizations, so now it is really starting to make a lot more sense.

 

Q. What about security concerns?

A. Within a manufacturing environment at a plant or in a warehouse, these devices are typically being used in conjunction with a local area network (LAN) connected by Wi-Fi. This way Internet access can be better controlled while keeping a lid on security concerns from the outside. This approach appears to be working fine, so security has not been a constraint.

 

Permanent link to this article: http://www.apriso.com/blog/2012/03/qa-update-mobile-perspectives-in-manufacturing-operations/

Mar 08 2012

Managing Supply Chain Risk: What Drives Risk?

Managing supply chain risk is hardly a new focus for global manufacturing companies. This issue can largely be explained by macro-economic trends like globalization. But, given the recent prevalence of high-impact, adverse events and natural disasters that occurred last year, this topic is now front and center for many manufacturers.

Two major factors are significantly impacting risk in today’s supply chain: increasing supply chain complexity and decreasing access to information. The challenge to effectively manage supply chain risk has therefore escalated, making it even tougher to address.

Increasing Complexity
Supply chain complexity is increasing in many ways. Companies are outsourcing more and more aspects of their business to globally distributed Supplier networks. Examples include manufacturing operations, product design and logistics. At the same time, products that are being produced continue to increase in manufacturing and design complexity. The large numbers of geographic markets where products are now being sold continues to increase, necessitating that an increasing volume of regulations must now also be complied with.

Lack of Data
As companies continue to expand globally, if the proper communication and collaboration systems aren’t implemented, decisions will be forced – regardless of whether all the right information is available. Unfortunately, when you have a lack of data, it directly correlates to an increase in risk. When organizations don’t have the right information to make an informed decision, a higher level of risk exists that an undesirable outcome will occur.

So, what does this all mean when something goes wrong or there is an adverse event?

It means that because of globalization, there is an increased likelihood that companies will be exposed to and impacted by adverse events, such as natural disasters, political and economic instability, supply disruptions, economic volatility and more. It also means that these events will be harder to deal with, and that there will be more risk of a negative consequence as a result of these events.

In a more traditional operating environment, when more of a company’s operations are under its own control, there are fewer moving parts. And, there is more ready access to information. In this type of scenario, it is much easier to identify, quantify, prioritize and mitigate risk for better decision making. Conversely, when there are more parties involved and less information, it is much harder to identify, quantify, prioritize and mitigate risk for better decision making.

With this new global manufacturing operating environment in mind, the value of supply chain visibility has increased significantly, offering substantial ways to help minimize risk of loss, order delays or reduced quality. How viable is your supply chain visibility? Is this a topic of discussion that you have had with your Chief Risk Officer or Chief Financial Officer? Should you?

Permanent link to this article: http://www.apriso.com/blog/2012/03/managing-supply-chain-risk-what-drives-risk/

Mar 06 2012

Two Trends Driving Manufacturers to Become Globally Integrated

Today Apriso released an IDC Manufacturing Insights white paper that discusses the future direction of the manufacturing industry, based on 400+ interviews conducted in late 2011. Full disclosure: Apriso sponsored this paper. It should come as no surprise that the industry is forecast to continue to be more global with regards to sourcing, production and distribution. This continued global direction is now seeking greater integration to streamline efficiency, reduce costs and increase quality.

IDC points at two underlying concepts driving this trend:

Product dynamics
Products must fit changing customer expectations in a global marketplace. The challenge is that customers are increasingly spread out over multiple global markets within both emerging and developed countries. Each potential customer has different expectations in terms of product features, quality and packaging. Competition is tough coupled with historically low levels of customer loyalty. These trends are moving the industry away from make-to-stock (MTS) and mass production towards make-to-order (MTO), assemble-to-order (ATO) or even engineer-to-order (ETO), in order to meet – and possibly exceed – customer needs. These types of production processes require far greater collaboration and synchronization of manufacturing business processes.

Production network dynamics
Customer fulfillment is now a guiding manufacturing principle. Improving overall customer service levels is critical for survival, playing a pivotal role in supporting higher customer retention. To better serve clients, manufacturers need to now move away from the traditional structure of having a few large, centralized manufacturing plants associated with single products serving clients worldwide. Now it is necessary to manage a network of many smaller plants that are widely dispersed across the globe, so as to be situated closer to where demand is actually generated.

These two trends dictate greater process synchronization across global manufacturing operations. The challenge is that traditional IT systems were not designed to support this type of architecture. The solution is to embrace a platform-based solution for manufacturing operations management. Only then can you truly orchestrate globally integrated operations that are highly flexible, so capable of responding quickly to change.

The path towards “enlightenment” doesn’t have to be rough … it can be accomplished with or without a “big bang” implementation, taken in steps that avoid unnecessary disruptions. The only question is when will you decide that now is the time to veer in this direction?

Permanent link to this article: http://www.apriso.com/blog/2012/03/two-trends-driving-manufacturers-to-become-globally-integrated/

Feb 28 2012

How to Leverage a Two-Tiered ERP Strategy with MES

I recently wrote about an emerging trend whereby a two-tiered ERP strategy is being used when trying to manage growth in new or expanding markets. In this post I will take a deeper dive into why combining a manufacturing execution system (MES) makes a lot of sense, offering insights as to what benefits are possible by pursuing this strategy.

To start, I think it is important to think about what business drivers are guiding your decision for expansion, as the time, effort and resource investment must make sense. Are you trying to lower costs? Are you in pursuit of new customers? Are you trying to follow your existing customer’s growth into new markets? Chances are your answer is “yes” … you are seeking all three. A cost reduction mindset must accompany every decision. At the same time, product quality must remain consistent to meet customer expectations. Maintaining quality on a global scale means that processes are standardized and executed the same, regardless of location; continuous process improvement must also be supported at every location.

Process Control
One of the biggest challenges when managing remote, off shore or outsourced operations is quality control. How do you really know that a specific operations process has been followed to ensure brand integrity? And, how can you be absolutely sure that your product’s genealogy history is accurate, down to processes performed and materials utilized? If you are supporting common customers across geographies, how can you be sure that you are executing the exact same processes at each of your own locations, on behalf of your customer? These issues are escalating in importance – the decision on whether operations can be effectively managed on a global basis is now being called into question.

The Benefits of a Manufacturing Execution System
A manufacturing execution system (MES) can ensure process and production consistency while supporting Lean and other continuous improvement initiatives. When implemented as a platform-based or “enterprise” solution, these benefits can be expanded to multiple locations. In other words, production processes executed at new facilities or emerging markets, such as Brazil, Russia, India or China (BRIC), can be performed in a consistent manner. This capability can be a tremendous benefit, translating into significant Return on Investment, especially when partnering with other companies or joint ventures in markets where visibility to daily operations is limited, at best. Potential savings include idle inventory reductions (20-60 percent), lower operating costs and higher quality for a reduced cost.

More importantly, when a robust MES solution has been implemented, it is less critical what ERP system has been selected – manufacturing intelligence, visibility and control has already been accomplished, ensuring corporate financial systems are “fed” all the necessary data they need. And, this choice then gives greater flexibility to save costs by pursuing a two-tiered ERP strategy.

Implementation
Getting back to reducing costs … often new, smaller locations simply don’t warrant a full scale implementation “army” of IT consultants necessary for “full scale” ERP implementation, especially if it can’t realistically be supported. Those manufacturers working with a joint venture partner might face added complications. An ERP system might already be in place that is different than their corporate standard. In these cases, why not simply pair the existing “light” ERP deployment with a platform-based manufacturing execution system? This type of solution ensures the necessary process governance, delivers consistent intelligence and measures and executes processes consistently across locations.

What does it all mean?
It is important for any IT decision to align with the broader organizational goals for growth and competitive positioning. Input and support from senior management, operations, IT and third party service providers are all critical factors to success. In fact, broad based support across the organization is often more likely to dictate success than any particular strategy. Now you have a choice if faced with an expansion facility that already has existing ERP footprint, or if you can’t cost justify expanding your “single” instance ERP strategy to a new BRIC location.

Have you had experience in this area? Do you agree? Or, tell me I am wrong. It would be great to hear from you, as this is a pretty new trend I am only now starting to hear about. Are there other considerations to a combined MES and ERP strategy you have observed?

Permanent link to this article: http://www.apriso.com/blog/2012/02/how-to-leverage-a-two-tiered-erp-strategy-with-mes/

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