Case Study Why a Shop Floor Execution (SFX) System is an Essential Component to Enterprise Systems

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1 Case Study Why a Shop Floor Execution (SFX) System is an Essential Component to Enterprise Systems Table of Contents Executive Overview... 2 History of ERP & SFX... 3 Model of Enterprise Applications... 4 Description of Shop Floor Execution (SFX) Capabilities... 5 Problems That Result from Lack of SFX... 9 Ensuring a Complement versus a Clash Conclusion Spotlight on Casco Development... 12

2 Executive Overview ERP systems are designed to pull together information from across an enterprise for streamlined materials management and accounting accuracy. They are not intended to manage manufacturing operations at a detailed, day-to-day level. Shop Floor Execution (SFX) systems interface to ERP/MRP systems to provide that set of functionality. SFX automates and streamlines factory operations by combining three popular applications around a core of Shop Floor Data Collection: Labor Management, Machine Utilization and Paperless Dispatching. The execution-oriented combination provides the essential tools for real -time production process management. SFX handles the high volume of detailed information about production activities and feeds the Enterprise system just the essentials to keep it functioning properly and improving the timeliness, accuracy and reliability of the enterprise data, adding to the ERP systems value. Additionally, it is not always possible to customize your enterprise system to the unique needs of individual plants. An SFX System is intended to be that configurable layer between your factory floor and your enterprise system. The functions and characteristics of SFX are not available in most ERP systems. Manufacturers, particularly those with high transaction volumes and high labor content, have found that SFX delivers significant benefits to the operation, IT staff, and business.

3 History of ERP & SFX Most ERP systems are derivative of the original MRP blueprint developed by Joseph Orlicky of IBM in the late 1960s. This original design centered on material requirements planning, hence the term. It was primarily about ordering the right material at the right time, and correctly accounting for its whereabouts so that accounting could produce routine financial statements. MRP evolved to Manufacturing Resources Planning or MRP II, and when capabilities for multi-site global capabilities were added, Gartner Group coined the term Enterprise Resources Planning, or ERP. The evolution from MRP to ERP primarily added breadth, not depth, to the functionality. Over the years, ERP systems have not provided strong functionality for scheduling and day-today execution in production operations. The ERP system is designed to tell manufacturing what to produce, but offers little about how to do it. As a consequence, today a full 30 years later most factories in the US still manage production in an informal reactive manner based on whiteboards, spreadsheets, etc. and the tribal knowledge of a few key foremen. With the ERP system always starved for transactions, many users feel like they are a slave to the system instead of the other way around. Countless applications have been developed to address the specific needs of plant floor operations. These include shop floor data collection, labor management, work dispatching, finite scheduling, electronic work instruction delivery, and so forth. Together they comprise another broad category of software, variously called Manufacturing Execution Systems (MES), Plant Software, and Plant/Production Information Management Systems (PIMS). Casco categorizes its particular offering of plant functionality in ShopVue as Shop Floor Execution (SFX). These software systems automate and improve plant personnel s jobs, much as ERP has done for those in materials management and accounting. They assist plant managers and supervisors in pinpointing problem areas while they can still improve on the situation. In addition, plant floor systems provide dramatically more timely and accurate information about actual operations in plants. The functionality of plant floor software offerings such as Casco s ShopVue SFX tend to be more industry-specific, since various types of plants run in unique ways. It is because of the wide variety of functions required by different plants that the plant floor systems marketplace has not created extremely large software providers, as the ERP market has. As a result, leaders in various segments of the plant floor software market are comparatively narrowly focused companies.

4 Model of Enterprise Applications There are many depictions of Enterprise Applications. The following diagram is a model created by Interwave Technology in Exton, PA to depict the many categories of software and how they form a complete Enterprise System. The important thing to note is that the ERP system is at the top three levels above the people and machines that are actually making parts. Manufacturing capabilities are different between ERP and SFX or MES. Specifically, each system handles the following: ERP All maintenance of master files: o Work Centers o Employees o Routings Scheduling completion of work orders Work order release SFX Single Supervisor screen to reconcile Operator Labor with Attendance Paperless Dispatch Micro-scheduling of resources Machine Utilization tracking Easy ad-hoc reporting Touch screen interface Special forms (e.g. quality data) Bar code terminal management 24 X 7 operation via stand-alone server Direct machine interface Massive data storage

5 Description of Shop Floor Execution (SFX) Capabilities Shop Floor Execution (SFX) systems combine three popular applications Labor Management, Machine Tracking and Paperless Dispatching. Also referred to as MES-lite, SFX represents the core subset of MES that is essential to most manufacturers. To our knowledge, these capabilities do not exist in standard Enterprise packages such that the business need can be addressed easily and quickly. The SFX systems therefore provide an excellent extension that can greatly boost operational success and provide superior data on actual performance.

6 The benefit of SFX is in the integration of traditional Shop Floor Data Collection, Labor Management and select aspects of MES (graphical dispatching) into a unique tool that the manufacturing employees truly embrace because it was created especially for them. It helps them do their jobs better, and helps the company as a whole be more competitive. SFX Feature Description Why Essential Single Supervisor Screen Reconciles Operator Labor with Attendance One screen that allows the Supervisor to check the Operators Production Reports in the context of attendance. Answers the question did the Operator account for all of his time properly? A painstaking practice that has been done manually in most factories for decades. Dramatically increases accuracy of the fundamental inputs that drive ERP. Eliminates time-consuming manual reconciliation. Shows where indirect labor costs and non-productive time are being spent. Paperless Dispatch Online interface that tells the Operator the next job to do and how to do it. Provides links to drawings, captioned pictures and other process instructions. Allows Planners to properly manage priorities. Reduces idle time on part of both Operator and Supervisor. Improves communication and delivery of information to Op- Micro-Scheduling of Resources A Graphical Interface that offers Planners and Supervisors the ability to create a short-term plan that reflects in sufficient detail how people, machines and orders are supposed to flow over the next couple of shifts. Examples include selecting alternate machines, combining setups, setting temporary rates, etc. As priorities are changed, instantly shows impact on completion dates of operations. Allows proactive management of what can realistically be accomplished in the near term. Eliminates the need for manual systems that break down over time or don t get used because they are too timeconsuming to maintain.

7 SFX Feature Description Why Essential Machine Utilization Tracking Monitors machine state changes as they happen: idle, running, down, scheduled off, etc. such that a variety of reports can easily be produced. (May get its input from a direct, electronic interface.) Allows factory personnel to manage key resources to ensure optimum uptime and throughput. Precludes the need for separate manual systems. Touch screen Interface An interface specifically designed for use by an untrained Operator. Must be highly configurable so as to limit prompts and enforce all reasonable validations. The best interfaces are smart in that they suggest what the Operator should do next dramatically limiting the possibility of a wrong choice. Minimizes Operator time at terminal. Prevents errors at the source that would otherwise contaminate data throughout your ERP application. Imagine what would happen to a bank s records if they allowed customers to bypass the idiot proof ATM machine and go behind the teller counter to do a cash withdrawal transaction directly in the online application. Special Forms The ability to extend the Operator interface to collect other data essential to managing the process and ensuring quality. Prevents need for separate paper-based systems that dilute the Enterprise System. Bar Code Terminal Management Software that controls the network of terminals prompting the Operator and sending responses back to the server. Creates a real-time connection between hardware and Enterprise System.

8 SFX Feature Description Why Essential 24 X 7 Operation Via a Standalone Server A ground-up design that ensures the Operator and Machine interfaces are available an absolute 24 hours a day, 7 day a week regardless of the status of the ERP server. Keeps the factory productive. Shields Operators and factory management from ever being victims of downtime for any reason. When the ERP server is down, the ShopVue server continues to manage the factory network of touch screens and bar code terminals. ShopVue backups are done concurrent with live operation. Direct Machine Interface The ability to connect directly to machines, scales and test equipment. Ensures ultimate in accuracy by eliminating the need for Operator to write down data from machine s control panel and then keypunch. Acknowledges that this is the only viable way to collect large data streams at frequent intervals, e.g. speeds, feeds, temperatures, etc. Massive Data Storage Stores the massive volumes of data resulting from the hundreds/ thousands of daily transactions like Operator starts/stops and direct interface of machines and test equipment. Avoid cluttering core ERP application and slowing its performance.

9 Problems That Result from Lack of SFX Some companies fail to formally recognize the need for SFX. In these environments, operational issues continue to exist, and a variety of applications and processes sprout up in an uncontrolled manner. IT staff and operational managers at these companies spend valuable company time and money selecting, purchasing, implementing and troubleshooting disparate systems that fail to work in an integrated fashion. This creates: Duplication of effort Non-value added activities Excess cost for purchase of unnecessary software licenses (e.g. cost of ERP licenses for factory PCs when Operators should really be using bar code terminals) Lack of trust in the ONE Enterprise System Silos of information Inconsistent information, data, and processes Unnecessary training due to proliferation of unrelated software packages Excessive IT costs in maintaining multiple, disparate systems A coherent SFX system can provide consistency and value to the operation much as your host ERP does to the office workers throughout the enterprise. The successful implementation of a plant-wide software solution provides similar benefits to an enterprise-wide solution.

10 Ensuring a Complement versus a Clash Of course, the SFX system must work with the ERP system smoothly. As mentioned above, the ERP system owns master files and releases work orders to the plant. To ensure the SFX System will act as an extension to host, consider the following in your purchasing decisions: 1. Give preference to vendors with a proven ERP interface. 2. Ensure the interface properly manages exceptions, to ensure synchronization is maintained continuously and automatically. 3. Explain the big picture integration to all related managers, putting each function clearly in one camp or the other. Train each role accordingly to clarify who has responsibility for data integrity. 4. Restrict Operators access to ERP/MRP screens; the SFX system will become their system. 5. Test your new implementation extensively before going live. 6. Involve experts who have a proven implementation methodology.

11 Conclusion Manufacturing companies have implemented ERP systems to ensure their entire enterprise works together smoothly. SFX is the parallel to ERP for each production plant: an integrated application set that automates and streamlines operations. While ERP systems generally feed information down to and expect actual data back up from the plant, they are not designed to serve Operators, Supervisors, and Managers in their day-to-day activities. That is the role of SFX. SFX is implemented in many manufacturers plants, integrated to the corporate ERP system. Special APIs provide appropriate interface points. SFX customers can attest to the benefits they achieve from using the system to manage manufacturing at a detailed level. They have also improved the timeliness and accuracy of data inside their ERP systems a chronic problem for manufacturers attempting to move to a more real-time management process. Companies with high volume, high labor content manufacturing use SFX systems to track WIP inventory, time & attendance, and labor. SFX systems are highly specialized tools for factory supervisors. Users can improve their workflow and profits and their workers have easy access to the information they need to do their job better. This provides them a competitive advantage in production that can translate into increased responsiveness and profitability.

12 Spotlight on Casco Development Casco Development provides innovative software solutions that help manufacturers achieve best-in-class production efficiencies by effectively managing the real-time interaction of workers, machines and orders. Many of our customers are Fortune 500 companies that depend on our systems for round-the-clock operations. We are a group of manufacturing professionals dedicated to delivering solutions to real life problems. Our continually-enhanced flagship product, ShopVue, evolves with ongoing input from our customers at all levels of the manufacturing industry. The result is a user-friendly, best-of-breed Execution system that can guide non-computer oriented factory personnel through the day s work. From the beginning, we recognized the potential to build a system that not only tracks orders, labor and attendance in real time, but integrated these components to provide a highly specialized tool to help factory Supervisors execute more efficiently. Now they can improve their workflow and profits, and their workers can readily access the information they need to do their job better. Casco Development targets the job-oriented, discrete Fortune 2000-size manufacturer seeking to enhance production efficiency. Our customers range from privately held North American manufacturers with 100+ employees, to Fortune 500, multinational, multisite manufacturing organizations. Contact Us 2 Portland Fish Pier, Suite 310 Portland, ME

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