Intersection of lean and mes best practices r rio arc orlando 2008

Intersection of Lean and MESIntersection of Lean and MESB t P tiB t P tiBest PracticesBest Practices

Ralph RioResearch Director

ARC Advisory Group

rrio@arcweb com

Agenda

•Research Findings

•Recommendations

This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC.

[email protected]

Where Lean & MES IntersectWhere Lean & MES Intersect

Agenda:Agenda:

Lean and MES Trends

Best Practice Study Process

Survey Results

Recommendations

2© ARC Advisory Group

Market TrendsIs there a connection?Market TrendsIs there a connection?

Improvement Programs: 69%Lean Mfg.35%Lean Mfg.

Q4 2005 Q1 2007

g

Lean Adoption Nearly Doubles 2%

52%

TQM

Six Sigma

18%

34%

TQM

Six Sigma

0%

0% 25% 50% 75%

TOC8%

0% 25%

TOC

MES Market:‘05 to ‘06 Market

2.0

ForecastedBillions

Visibility to Manage• Agility

05 to 06 Market Grew 27.2%

0.5

1.0

1.5Forecasted

CAGR = 14.5%


• Speed 0.0

'06 '07 '08 '09 '10 '11Source: ARC Advisory Group “CPM Systems Worldwide Outlook for Discrete Manufacturing”

Lean and MESSurvey Lean and MESSurvey

RespondentProfile

Revenue

106 Survey Respondents

18%

30%

$25 to $250

$250 million to $1 billion

Over $1 billion

Styles of Manufacturing Continuous Improvement Program

Primary Improvement Program

21%

31%

0% 20% 40%

Under $25 million

$25 to $250 million

29%

38%

49%

Continuous

Assembly Lines

Batch/Lot

14%

22%

39%

Six Sigma

Lean Six Sigma

Lean/TPS Lean61%

20%

21%

0% 20% 40% 60%

Packaging

Job Shop

64%Discrete

Primary Industry

2%

12%

11%

No Program

Other

TQM

0% 20% 40% 60%

1%

12%

23%

Utilities

Process

Hybrid0% 20% 40% 60%Sum = 100%


1%

0% 20% 40% 60% 80%

Utilities

For these attributes, the Leaders, Competitors and Followers have similar profiles

Scope of ResearchLean and MESScope of ResearchLean and MES

DimensionsP l• People

• Processes• Technology

ProductionManagement

• Technology• Metrics

C t iCategories• Leader• Competitor Maturity Matrix• Competitor• Follower

People Processes Technology Metrics

Leader Best Practices

Competitor Common Practices


Competitor Common Practices

Follower Poor Practices

Best Practices Lean and MESBest Practices Lean and MES People

Who is Involved in the CI Program?Internal

77%Mfg. Support

Leaders

22%

Followers

Internal

59%

64%

68%

Product

IT

Plant Floor

9%

3%

41%

50%

55%

59%

CustomerSupport

Sales & Marketing

Development

16%

6%

9%

Fully: Over 75%

Partially: 50 to 75%of people36%

41%

0% 20% 40% 60% 80%

Accounting & Finance

Recv, Stock, & Shipping

9%

13%

0% 20% 40% 60% 80%


Leaders have Broad Involvement

0% 20% 40% 60% 80% 0% 20% 40% 60% 80%

PeopleBest Practices Lean and MESBest Practices Lean and MES

Who is Involved in the CI Program?External

Leaders Followers

External

50%

59%

Distribution to

Outsourced Mfg. Operations

Suppliers

9%

13%

64%

0% 20% 40% 60% 80%

Distribution to Customers 3%

0% 20% 40% 60% 80% 25% or more


Leaders have Broad Involvement

Best PracticesLean and MESBest PracticesLean and MES Process

How are Business Processes Managed?(routing, procedures, setup, etc.)

L d F ll

59%

86%

I i i l

Written Documents

IT Systems

Leaders

41%

16%

Followers

86%Leader

Business Process Mgt. in IT SystemsIT SystemsMore Detail

9%

23%

32%

Ad Hoc

Verbal Instruction

InstitutionalKnowledge

16%

28%

53%

n

16%

27%

Follower

Competitor

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 25% 50% 75% 100%

Primary


Leaders Use IT Systems for BPM

Best Practices Lean and MESBest Practices Lean and MES Process

If BPM is "Embedded in IT systems", which IT systems?which IT systems?

FollowersLeaders

31%

16%

77%

82%

ERP System

Production Mgt. (MES)

22%

25%

68%

77%

Separate BPM

Custom Application

Automation Systems

6%

0% 25% 50%

27%

0% 25% 50% 75% 100%

Separate BPM Application


Leaders Use IT Systems for BPM

Best Practices Lean and MESBest Practices Lean and MES Technology

Portion of Employees who Access a Computer DailyAccess a Computer Daily

77%

I di t

Indirect Exempt

Leader

87%

Competitor

63%

Followers

49%

68%

0% 20% 40% 60% 80% 100%

Direct Labor Non-exempt

Indirect Non-exempt

51%

77%

0% 20% 40% 60% 80% 100%

25%

41%

0% 20% 40% 60% 80% 100%0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%


All have Good Access to a Computer


Access to Information Needed to Perform their JobPerform their Job

69%

Di L b

Indirect Exempt

Leaders

24%

Followers

47%

Competitors

67%

72%

Indirect Non-exempt

Direct LaborNon-exempt

19%

35%

47%

43%

0% 25% 50% 75% 0% 25% 50% 75%0% 25% 50% 75%


Leaders Do Better Application Selection


What are Your MES Systems?

F ll

31%

25%

0%

6%

e

Followers

68%

86%

5%

5%

ERP Module

CustomApplication

Leaders

28%

28%

6%

6%

64%

68%

9%

5%

AutomationSystem

StandaloneApplication

0% 20% 40% 60%Current Future

0% 20% 40% 60% 80% 100%


Leaders Use More MES


Bottom line, is Technology an Impediment or Aid to your CI Program?Impediment or Aid to your CI Program?

Leaders Followers 32%Accelerates

ERP

6%

ERPLeaders Followers

18%

77%

Helps

Accelerates

MES

19%

9%

MES

0%

14%

41%

M j

Detraction

No effect

Helps

19%

16%

25%

t

0%

0%

0%

Major

Detraction

No effect

6%

3%

9%0%

0% 25% 50%

Major Impediment 9%

0% 25%

Automation AutomationLeaders Followers

0%

0% 20% 40% 60% 80%

Major Impediment 6%

0% 20% 40%

5%

32%

59%

No effect

Helps

Accelerates

9%

22%

9%

t


Leaders SuccessfullyApply Technology 0%

0%

0% 20% 40% 60% 80%

Major Impediment

Detraction

3%

3%

0% 20% 40%

Best Practices Lean and MESBest Practices Lean and MES Metrics

How and When are Metrics Calculated?First Pass YieldFirst Pass Yield

First Pass Yield rst Pass Yield

When is First Pass Yield Calculated?

Leaders Followers

How is First Pass Yield Calculated?

Leaders Followers

All Responses

14%

5%

23%

By shift

Each hour

About 15 min.

6%

3%

0%

t

r

45%

9%

14%

MES

Manually Calculated

Spreadsheet Software

0%

28%

16%

14%

5%

14%

14%

Monthly

Weekly

Daily

y

3%

9%

16%

y

y5%

14%

45%

0% 20% 40%

Automation System

ERP

MES

Sum = 87% 0%

3%

0%

0% 20% 40%

Sum = 47%

0%

14%

0% 20%

Quarterly

Monthly

0%

3%

0% 20%

y

y0% 20% 40% 0% 20% 40%


Leaders use More Metrics More Often


How and When are Metrics Calculated?Overall Equipment Effectiveness - OEEOverall Equipment Effectiveness OEE

OEE OEE

When is OEE Calculated?

Leaders FollowersOEE OEE

How is OEE Calculated?

Leaders Followers

5%

23%

B hift

Each hour

About 15 min.

3%

0%

59%

9%

23%

MES

Manually Calculated


OEE

6%

13%

16%

OEE

27%

14%

5%

Weekly

Daily

By shift

6%

3%

3%

9%

0%

59%

Automation System

ERP

MES

0%

3%

6%

Sum = 38%Sum = 100%

0%

18%

0% 20% 40%

Quarterly

Monthly

0%

9%

0% 20% 40%

0% 20% 40% 60% 0% 20% 40% 60%




How and When are Metrics Calculated?Scrap and ReworkScrap and Rework

Scrap and Rework nd Rework

When is Scrap & Rework Calculated?

Leaders Followerscrap and ReworkS d R k

How is Scrap & Rework Calculated?

Leaders Followers

23%

0%

9%

By shift

Each hour

About 15 min.

p

3%

3%

0%

%

25%

31%t

crap and Rework

0%

23%

MES

Manually Calculated


Scrap and Rework

18%

18%

23%

Weekly

Daily

By shift

9%

19%

3%

3%

6%

0%

Sum = 65%5%

18%

45%

Automation System

ERP

MES

Sum = 81%

0%

23%

0% 20%

Quarterly

Monthly

0%

28%

0% 20%

y0% 20% 40%0% 20% 40%



ConclusionsEmbed BPM in Your MES & IT systems ConclusionsEmbed BPM in Your MES & IT systems

Automate Business Processes

ConsistencyWhat are the impediments to your continuous improvement program?

Change Sticks

Embedded in

ce

p p gAll 106 Survey Respondents

Business Process

Performan

ManualBusiness Process

Begin Analysis

Identify Improvement

Change C l t

Time

Source: Lean Institute Survey of Members 2/04Primary Obstacle: 36% “Sliding back to old ways”


Complete

Make Improvement Continuous

ConclusionsEmpower the People who do the WorkConclusionsEmpower the People who do the Work

Involve people throughout the enterprise’s value stream

Value Stream Map“Order to Cash”

Provide real-time visibility and metricsPrimary Reasons for MES Why did you buy a MES?All 106 Survey Respondents

Identify in real-timewhen and where to 34%

39%

59%

Historical Data

Flexibility for Changing Demand

Real-time Visibility

when and where to“Go and See”

26%

31%

Functions for

Quality/SafetyEnforcement

Build Based on Consumption


25%

0% 20% 40% 60%

Functions for Lean Six Sigma

Primary

Intersection of Lean and MESIntersection of Lean and MESB t P tiB t P tiBest PracticesBest Practices

Ralph RioResearch Director

ARC Advisory Group

rrio@arcweb com

Agenda

•Research Findings

•Recommendations

This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC.

[email protected]

Intersection of lean and mes best practices r rio arc orlando 2008

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Transcript of Intersection of lean and mes best practices r rio arc orlando 2008