Friday, November 6, 2009

Hooking ERP Up with MES: Good, But Not Sufficient Yet

Without such a tight and near real-time integration, there is much anxiety and frustration within any enterprise that is in search of a more competitive, profitable, safe, and agile factory. How can any manufacturing company reduce non value-adding administration and empower their workforce to take immediate remedial actions?

Namely, the typical current state of affairs from the perspective of a senior vice president (SVP) of operations could be summarized as follows:

1. On one hand, the ever more pressured manufacturing environment demands acceleration of the stock-keeping units (SKU) mix and shorter lead times, all due to ever more demanding and fickle customers; but
2. On the other hand, the real world situation is of little overall enterprise and/or SKU-level profit visibility, and the company has to rely on (suboptimal) average key performance indicators (KPIs), with emergency scheduling (constant firefighting) on paper or Excel documents.

In such “clueless” environments, there are “blind spots” everywhere in terms of determining yields and losses, hidden capacity opportunity, and masked process routing and constraints by reactive work practices. Also, there are increased risks of quality non-compliance leading to manual quality assurance (QA) processes, whereas continuous improvement efforts are floundering and remain unmeasured. In a nutshell, the hands-on plant people do not seem involved and are ironically not accountable for what they should be.

The future state should logically be the inverse of the above, and the usual “first remedial step conclusion” is to gather the glut of data from data historians and MES databases, and then decide what to do. But, without smart and intuitive plant applications that have visualization and contextual business intelligence (BI) capabilities (and that are thus accepted by the plant staff), this will all be yet another exercise in futility.

The reality check reveals an “inconvenient truth” that many MES investments fail to deliver hoped for performance management outcomes due to people issues. Namely, after 18 months or so, the embattled company in case might have an overall equipment effectiveness (OEE) dashboard that the plant engineers occasionally look at (and which might have cool colors on it), but without a pervasive effect (actionable info) and acceptance across the plant (and entire enterprise).

Curbing MESsy Shop Floor State of Affairs – Part II

MES solutions that integrate seamlessly into existing enterprise applications thus connect manufacturing to the enterprise in order to:

* Reduce costs and improve profits by collecting and communicating real-time manufacturing data throughout the product lifecycle; and
* Closely control and continuously improve operations, quality, and visibility across facilities worldwide.

By standardizing the best practices of lean manufacturing, overall equipment effectiveness (OEE), and continuous process improvement (CPI), such solutions should provide a real-time framework that would unite capabilities like finite factory scheduling (constraints-based), operations, quality, safety, performance management (via analytics), and enterprise asset maintenance (EAM).

Plant-level execution systems have thus far largely been adopted by big companies in a big way. The historic condition in this highly fragmented market was that offerings were too niche-oriented and offered by many small software companies. A large enterprise would have to purchase many offerings and stitch them together to get a full solution. Today, however, comprehensive packaged factory solutions that are repeatable, scaleable, and transferable are changing that dynamic.

Some Shining Examples

Some good examples in this regard would be a rare few ERP vendors with native MES capabilities, starting with IQMS and its EnterpriseIQ suite [evaluate this product]. Mid-2008, IQMS launched a new Automation Group to expand the interface capabilities of its EnterpriseIQ ERP system with manufacturing equipment on the shop floor.

Look for a separate article on IQMS down the track. In the meantime, you can find more information about the vendor here and in TEC’s earlier article entitled “Manufacturer’s Nirvana — Real-Time Actionable Information.” Also, there is an informative Enterprise Systems Spectator’s blog post on IQMS here.

Solarsoft (formerly CMS Software [evaluate this product]) would be another good ERP-MES example following the acquisition of Mattec a couple of years ago. The upcoming Epicor 9 product, which represents a complete rewrite and convergence, on the basis of service-oriented architecture (SOA) and Web 2.0, of the selected best-of-breed functional concepts from the respective individual products (like Epicor Vantage [evaluate this product], Epicor Enterprise [evaluate this product], Epicor iScala [evaluate this product], and so on) will feature the native MES module. Of course, some functionality within Epicor 9 will be brand new, while some modules will represent embedded third-party products (unbeknownst to the customer).

Curbing MESsy Shop Floor State of Affairs – Part I

Those that follow manufacturing-oriented enterprise applications have likely noticed for some time an uptick of conversations about the need to better integrate high-speed manufacturing operations (the real-time world of the plant) with the planning and engineering departments (the transactional and design world of enterprise systems). The nirvana (or utopia) hoped for thus far has been to provide a single point of operation and control for manufacturers to: Plan, Define, Control, Execute, and Analyze Production.

Why do we need integrated manufacturing operations, or manufacturing execution systems (MES) linked to transactional enterprise resource planning (ERP) systems, likely via some plant-level integration hub and visualization & intelligence layer?

Well, it is not a major revelation to say that, for instance, in the discrete manufacturing sector, fabrication and assembly processes are being run and managed by isolated applications, such as “Post-it” notes, Microsoft Excel spreadsheet, Microsoft Access databases, and a plethora of niche vendor’s plant applications (point solutions like data historians). This creates an overwhelming number of individual silos (or islands) of manufacturing data and operations.

These silos are typically not connected to enterprise-level (“ivory tower”) systems like ERP, Computer-Aided Design (CAD), Product Lifecycle Management (PLM), and so on. This lack of integration and real-time connection then all too often results in huge operational inefficiencies, lost productivity, wasted time and materials, sub-par products, and so on.

Consequently, major decisions in the offices are based on theory and hunch rather than on actual and actionable data. But instead of traditionally managing operations “in the dark”, companies should rather strive to capitalize on all of the operational opportunities coming from the following sources: people, processes, and the plant equipment.

ERP Does It… Not!

Some might logically wonder whether ERP systems can take care of this (and why not, if that is the case). Well, at best, the core ERP systems’ functional scope only provides a financial and inventory snapshot of how a manufacturer is performing. Core ERP systems cannot tell users what is happening on the manufacturing floor right now (at this instant). Ironically however, what is happening at this moment impacts the financial performance later.

To be more illustrative, ERP is good at producing a forecasted demand plan by decision makers, and giving answers to sales, purchasing, and manufacturing orders’ inquiries like “What?”, “When?”, “For whom?”, and “At what cost?” Conversely, MES is good at providing the record of production that is supplied by plant operators (e.g., engineers, supervisors, machinists, etc.), who thereby inadvertently turn into mere data collectors.

The execution system is able to provide answers to the questions like “What are the schedule changes?”, “What is the product build history?”, “When will it be done?”, “How is the product quality?”, and “Where is the batch?”, but without any awareness of the customer (the particular order for that customer) or the particular order costs. In a nutshell, MES systems are devoid of any customer- and order-related information.

Curbing MESsy Shop Floor State of Affairs – Part III

As for the user interface (UI), it is extremely critical that it match the worker’s job. There is a saying that “the worker works the way the worker wants to work,” and in any plant-level system the role-tailored and industry-specific UI is incredibly important to streamline, or “lean out,” the tasks that are required.

This is why ERP systems have customarily been so poor at handling manufacturing execution: not necessarily that the functionalities don’t exist in some ERP manufacturing offerings, but that it is too difficult for workers to input the necessary information. I fully agree with AMR Research’s 2007 alert entitled “CDC Software Delivers Operations Excellence in Plain English” that states:

“…Knowledge workers on the shop floor can’t waste time—downtime or overtime—filling out forms or navigating complex screens and menus to accomplish their goals…

…Role-based workflows, stored procedures, and no-nonsense user interfaces are designed to guide operations personnel through common scenarios. The UI is also designed to work with touch-screen interfaces, supporting simplified and rapid data-entry scenarios. This is a far cry from the historically cumbersome multi-page, multi-tab interfaces offered by traditional ERP systems.”

Such intuitive and engaging technologies might even help to overcome traditional cultural barriers between the enterprise and the plant, which are well depicted in the recent Optimal Solutions’ article:

“…Many plants, particularly those over a decade old, began as quasi-independent entities. As these plants evolved, a culture of isolationism often took hold.

Inside manufacturing plants, engineering, operations and information technology (IT) established fiefdoms. Over time, plant engineers, plant managers, process control operators and machinists learned to execute their respective functions while respecting each other’s turf. Overly intrusive corporate oversight was often kept at bay by hitting production numbers and keeping costs under control…”

AMR Research’s Manufacturing Peer Forum members say that unlocking the potential of plant operations personnel and letting them take ownership of the continuous improvement process (CIP) has been highly successful in operations.

Enter CDC Factory

This brings us to CDC Software’s CDC Factory, which is a packaged manufacturing execution and operations intelligence management system that transforms manufacturing performance by enabling operations people to take immediate action. The suite is aimed at, either in tandem with the sibling Ross ERP suite [evaluate this product] or any other ERP product for that matter, catering to the needs of midsize manufacturers in the food and beverage (F&B), pharmaceutical, and consumer packaged goods (CPG) industries.

Although CDC Factory is ERP-agnostic, future developments are meant to leverage the capabilities from Ross ERP and vice versa. Accordingly, the end of 2008 saw the Ross Factory module extending and expanding value for Ross ERP customers.

Along similar lines, in early 2009 CDC Factory should feature Trace Express, the Ross ERP system’s ability to trace orders and materials forward from suppliers and backward from customers with audit trails. In late 2008, the Ross BPM (Business Performance Management) 6.3 product was launched with a new UI, Microsoft SharePoint portal, and document management integration, which will be extended to CDC Factory at a later stage.

The CDC Factory users’ empowerment and involvement is encouraged via a factory floor UI for capturing all real-time inputs, outputs, information, alerts, decision-making process and actions. Different plant roles (e.g., executives, managers, supervisors and operators) will have somewhat differently tailored screens serving the respective knowledge-worker. But in all cases, the UI features the Microsoft Office familiarity combined with consumer-style screens like automatic teller machine (ATM) or restaurant/retail shop point of sale (POS) terminals.

For example, a supervisor will see the following: many pertinent key performance indicators (KPIs) and other analytical information such as plant dashboards; the end of the shift summary; the end of the production run summary; top downtime reasons; quality adherence; tactical analysis, and so on.

Many best practices were built into the product as a natural extension of daily activities to facilitate managers and shop-floor workers to suggest and/or leverage common-sense CIP techniques. These best practices can be in terms of working practices (e.g., standard operating procedures [SOPs] or good manufacturing practices, role accountability, etc.), key comparative metrics, comparable manufacturing processes, standard definitions, standard data (e.g., coding, failure codes, etc.), and so on.

Also incorporated are the business performance management (BPM), analysis, and workflow capabilities normally associated with total productive maintenance (TPM), total quality management (TQM), Six Sigma, and other lean manufacturing toolsets. All this without necessarily requiring the operators’ intimate knowledge of this trendy academic terminology (which might sound like Greek to many plant folks).

For example, comparative factory KPIs would be: the factory’s overall equipment effectiveness (OEE) trends, manufactured units per man-hour across plants, cost per unit (by product and/or product type), and on-time delivery. For its part, plant performance KPIs would be: performance by shift/product, plan attainment, downtime percentage, labor variance, and waste percentage. Finally, operation intelligence and analysis could provide KPIs like the categorization of downtime, reasons for yield loss, or reasons for slow running.

Open Source and Business Intelligence: The Common Thread

"Open source applications" is the term that describes systems built using open source software in the form of frameworks or libraries. Although copyleft licenses do not permit organizations to resell software developed using open software, mechanisms such as dual-license models have arisen, whereby commercial vendors can deliver their software under a community license that follows the open source license regulations and offers a commercial license with an attached fee. Vendors may charge users for services such as support, training, consulting, and advanced features.

In the past two years, commercial open source vendors have been working actively towards establishing a long-term position in the enterprise applications space. In February 2007, the Open Solutions Alliance (OSA) was formed to bring together commercial open source software businesses; its main purpose is to broaden the horizon of open source applications and most importantly, foster interoperability between them. JasperSoft, one of the pioneers of open source BI is among the founding members of this alliance. Pentaho, another open source BI vendor, has set itself apart by leading and sponsoring all of its core projects, implementing open industry standards and establishing partnerships with vendors of data warehouse technology, such as InfoBright and ParAccel.

BI has some of the most challenging technology problems among all enterprise software applications. These challenges include the design of very large databases; complex data integration between disparate and multiple data sources; the ability to search across a surfeit of information; and some of the most stringent performance and latency requirements. Even with proprietary solutions, organizations need a team of experienced professionals—including database administrators, business analysts, and programmers—to implement and support a data warehouse and BI environment.

Open source BI goes one step further: it encourages organizations to use and modify the software as needed and share advances with the rest of the community. It seems only natural that open source and BI technologies have converged. A crucial factor to consider when adopting an open source BI solution is that underlying technologies are often, if not always, open source themselves; although not mandatory, it is prudent to have technical teams acquire the necessary skills. For instance, most open source BI software is built on the LAMP stack. In order to adopt and maintain the applications, technical teams need to have development and administration skills using the LAMP stack.

Extensible Business Reporting Language (XBRL) Back in the News Again

Visiting the Securities and Exchange Commission’s (SEC’s) web site, I came across this 143-page PDF file, which deals with XBRL. As a gung-ho proponent of automation, I’m calling attention to it here to show that the head of the SEC (Mr. Christopher Cox) and I are on the same wavelength when it comes to promoting cost saving automations. Here is some interesting stuff from the PDF, together with my comments.

The Christopher Cox modernization commission proposes that companies provide their financial statements to the Commission and on their corporate Web sites in interactive data format using the eXtensible Business Reporting Language (XBRL). A statement on Page 29 of the PDF states that the decision about this request becoming compulsory was to have been decided on December 15th, 2008.

XBRL was derived from the XML standard. It was developed and continues to be supported by XBRL International, a collaborative consortium of approximately 550 organizations representing many elements of the financial reporting community worldwide in more than 20 jurisdictions, national and regional.

The proposal is a significant one for Mr. Cox as he is a proponent of modernization and the use of current technology to reduce business and government expenses. His legacy will be the promotion of “interactive data” and modernization of SEC filings through the use of XBRL.

Mr Cox has decided to retire at the end of President Bush’s term. During Mr. Cox’s tenure, the regulator has convinced over 8,000 companies to use XBRL in various types of filings. Large international organizations such as Proctor and Gamble and Pepsi file with GAAP and IFRS, are using XBRL, and are on the very pro XBRL bandwagon.

Sterling Software Sees the Light with Eureka:Intelligence

MINNEAPOLIS, Nov. 15 /PRNewswire/ -- Sterling Software, Inc. (NYSE: SSW) announced general availability today of its new EUREKA:Intelligence product. EUREKA:Intelligence is a Web-Based Integrated, Query, Analysis and Reporting tool that allows users to easily query, manipulate and format data for personal or shared use. It integrates the most commonly used business intelligence capabilities into a single tool, making it valuable for the majority of business users. EUREKA:Intelligence is ideally suited for large, distributed organizations that require general purpose analyses reporting requirements for a large portion of business users. The 100% Java tool also satisfies the unique requirements of business-to-business e-commerce companies.

EUREKA:Intelligence is the latest product to be added to the integrated EUREKA:Suite. The suite also contains products for web-based production reporting, analysis of very large databases, and advanced ad-hoc analysis. In addition, EUREKA:Portal provides a single point of entry and is a common platform of services for all EUREKA:Suite products. Since EUREKA:Intelligence is 100% Java, it provides cross-platform support. The client code is maintained and deployed automatically by the EUREKA:Intelligence server, so there is no need to install or update client code. The product has multiple analytical view modes including chart, pivot, table, and report document. There is also a scheduling capability to allow users to monitor performance over time. Time-series groupings of similar archived reports can be used to generate historical information.