Accelerating ERP Visibility to the Plant Floor: Core MOM Strategy Enables Rapid Multi-site Rollouts

Transcription

1 Accelerating ERP Visibility to the Plant Floor: Core MOM Strategy Enables Rapid Multi-site Rollouts JUNE 2007

2 Table of Contents Executive Summary... 3 Introduction... 4 A Combined Manufacturing Operations and ERP Solution... 4 MES Is Not Enough... 5 What s Driving the Need for Global MOM Systems?... 6 A New Approach... 7 Define Best Practices Locally, Deploy Globally... 8 Deployment Methodology... 8 Cross-Organizational Support: Core Team Approach... 9 Conclusion About Apriso , 2009, 2010 Apriso Corporation This white paper, the software described in it, and other program materials are copyrighted works of Apriso Corporation, with all rights reserved. Trademark Information Apriso and FlexNet are registered trademarks of Apriso Corporation. Limitation of Liability The information in this document represents to the best of our ability the product functionality of Manufacturing Execution, Manufacturing Operations Management and other software products. These materials are subject to change without notice. These materials are provided by Apriso Corporation for informational purposes only, without representation or warranty of any kind. Apriso Corporation shall not be liable for errors or omissions with respect to the materials. The only warranties for Apriso Corporation products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. Version Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

3 Executive Summary As globalization continues to impact manufacturing strategies, an evolving set of business challenges must be addressed for manufacturers to maintain a competitive advantage, deliver consistent quality product cost effectively, while staying ahead of the innovation curve. Enterprise Resource Planning (ERP) systems have been implemented to best leverage distributed operations, providing a view of the business through financial and other senior management reporting. To support globalization, the ERP evolution has now reached the plant floor, where the desire exists to obtain greater detail and specificity required for continuous process and quality improvement, supply chain visibility and complete product traceability and genealogy across global manufacturing operations. The challenge however, lies in not only achieving this integrated environment, but in how to implement such a system on a global basis while ensuring connectivity to the business s ERP system. And, to be successful, a manufacturer s global operations execution programs must be meshed with each individual plant s operations processes and key performance indicators (KPIs), providing the necessary visibility and control to effectively manage a global and locally distributed manufacturing environment. To meet the challenge of deploying an integrated operations-level Manufacturing Operations Management (MOM) solution, best in class manufacturers apply the concept of an 80/20 rule of deployment and integration, recognizing that approximately 80 percent of their business process functionality can be standardized across globally dispersed plants. By setting up a master profile representing best-practice processes and KPIs, a template can facilitate smooth global deployment across multiple locations. Local custom work, to support local idiosyncrasies of each particular location is applied to the remaining 20 percent of the implementation. This white paper will explain how a MOM deployment can cost effectively accelerates ERP visibility to the plant floor. 3 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

4 Introduction Over the years, manufacturers have made tremendous investments to embrace the global economy, including the distribution of operations to low cost labor locations, while at the same time establishing their brands in new markets to achieve heightened sales objectives. One trend that has supported this expansion is the growing deployment of Enterprise Resource Planning (ERP) systems. However, according to industry analyst firm Aberdeen Group, on average, companies are using less than 28 percent of available ERP functionality. In part, this is due to the fact that nearly one-third of the ERP systems in production are more than 10 years old, so tend to lack features such as multi-site capabilities and extensions for production, warehouse, customer and supply chain management driving the need to deploy separate best-of-breed solutions. 1 Many manufacturers have come to the realization that while newer ERP systems provide the requisite functionality to handle production and manage finished goods inventory, what often remains is white space a void of operational details concerning activities in between. Work orders and materials enter the plant from one end finished products exit at the other with a dearth of operational data necessary to facilitate informed timely decisions that optimize the complete process. ERP systems were designed for the business from a top-down perspective. As of now, they have been less effective integrating down to actively manage and track plant floor activities. Faced with a chasm between what people in the shop floor know and do, and management s conceptualization of what is happening, is perhaps a manufacturer s greatest challenge today. Many manufacturers are struggling to resolve this disconnect between the plant floor and the enterprise, by extending ERP systems to meet the new and emerging requirements of global competition. A Combined Manufacturing Operations and ERP Solution Manufacturers who are among best-in-class organizations are taking action to unify their manufacturing processes to assure real-time, predictable product output and quality, with standardized global measurement, collection and evaluation of key performance indicators. The experiences of these pioneering manufacturers have established a best practice deployment strategy to coordinate the execution of their manufacturing operations as part of their ERP deployment. 1 ERP in Manufacturing Benchmark Report, Aberdeen Group (August 2006). 4 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

5 These manufacturers recognize that a combined solution can establish a system to capture relevant operations data that can then be incorporated within ERP to address corporate planning requirements, providing full visibility from the top floor down to the plant floor, accelerating time to global market. The challenge lies within how to deploy such a solution, which must now include multiple systems installed remotely at locations worldwide. Each must work seamlessly as an integrated component of ERP. And, in the spirit of supporting the Continuous Improvement philosophy now firmly ingrained by leading manufacturers, this system must be capable of optimization through the timely modification of business processes to improve overall output, adaptability and responsiveness to external market pressures. Taking detailed measurements and performing select adjustments to improve overall productivity and product quality is even more complex when performed over a series of distributed, globally separate systems with multiple interrelated variables, especially when change ramifications impact the entire organization. MES Is Not Enough In the past, Manufacturing Execution Systems (MES) were deployed at the plant- or site-level. Execution tasks were primarily local, impacting decisions performed at the plant that didn t require enterprise wide visibility for global planning or supply chain management. Today, however, the function and therefore deployment of MES has shifted. According to Gartner Research, MES is changing from a production-focused application to a critical part of enterprise business process integration. 2 Today, MES and other operations execution and management systems, collectively referred to as a Manufacturing Operations Management (MOM) system, is a component of the systems which operate throughout the enterprise, providing control of operations and management of important data to multiple locations. And, these systems must be capable of horizontal integration across each of the various production lines, addressing ever increasing quality standards, metrics and processes, which must be implemented, documented and validated to address respective internal quality objectives, as well as numerous regulatory compliance initiatives. What is MES, and How Does it Compare to MOM? A Manufacturing Execution System (MES) is a dynamic information system that drives effective execution of manufacturing operations. Using current and accurate data, MES guides, triggers, and reports on plant activities as events occur from point of order release into manufacturing to point of product delivery into finished goods according to Manufacturing Enterprise Solutions Association International (MESA). Manufacturing Operations Management (MOM) is a new term, and has a wider scope of meaning, including each of the operational areas of manufacturing, from production to warehouse, quality, maintenance and labor processes. And, a MOM system can be deployed across multiple locations for a more comprehensive, enterprise-class solution. With the growing need for real-time visibility to plant-floor operations, MOM systems are no longer considered part of the top level of a plant s operations, but rather part of the bottom level of the business system stack, requiring full integration across the plant floor and into the ERP framework. 2 MarketScope for MES Software, 2006 by Andrew Hughes and Kenneth Brant, Gartner, Sept Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

6 In this way, MOM integrates business-critical applications into a cohesive, efficient system that provides consistent visibility for a single version of the truth, thereby reducing IT complexity and infrastructure costs. This is good news for manufacturers that have seen a steady proliferation of manufacturing applications and a resulting escalation in IT complexity and management overhead required to support these systems over the years. And, with mergers, acquisitions and best-of-breed or customized applications that are inherited as part of M&A activities, the systems environments faced by some IT management professionals are quite daunting. What s Driving the Need for Global MOM Systems? There are many factors driving the adoption of MOM, namely any manufacturer s efforts to expand and integrate operations globally. Integrating enterprise manufacturing systems across a multitude of international operations is a common challenge among those companies that are expanding their businesses to enter new markets or take advantage of offshore capabilities. Aside from the obvious language and localization issues, global manufacturing adds an exponential layer of complexity and the need to navigate and adapt to ever-changing global market dynamics. Best-in-class companies are taking action to unify manufacturing processes and standardize KPI metrics globally. Manufacturing Operations Management Systems are increasingly being used as the system of choice to support consistent product production and quality. Another key driver is the need for systems to support manufacturing business initiatives such as Lean Manufacturing and Six Sigma in the ongoing quest for performance and quality improvement. MOM integrates the plant floor with the enterprise, blending financial and operational metrics to ensure manufacturing enterprises are focused on common overarching corporate goals and enterprise-wide initiatives, rather than simply the optimization of a singular function over another. Of course, a discussion on business drivers for global MOM would be remiss without mention of the heightened need for increased visibility and accountability to meet compliance requirements. Integration of manufacturing data provides companies with highly granular data to track materials and components through the factory and customer delivery while tracing quality problems back to a specific machine, raw material, shift or operator. Knowledge of what machines, operators, processes and anything else involved in the manufacture of finished products is available which becomes critical in a recall scenario. 6 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

7 A New Approach Global manufacturers are moving beyond MES systems to support the execution of dispersed operations. These manufacturers are seeking to establish a MOM platform capable of supporting ERP with real-time data from the plant floor, warehouse, maintenance and quality operations processes. However, the question still remains How can such a solution be implemented? What are the best practices to achieve a seamless deployment, without serious disruptions to production, which might then remove upside potential for such a new architectural approach? A strategic approach is to treat MOM as if it were a module of ERP, to be implemented as an enterprise application. By establishing a Core blueprint for deployment that identifies 80 percent of the relevant business processes used by each location, it is possible to create a core operations platform, which may then be easily replicated throughout the enterprise. This approach leverages the value of an ERP system, by integrating plant floor operations from across the global organization with corporate planning activities, providing complete visibility and control, yet still enabling local customization to meet the unique requirements tied to each plant s particular circumstances. By setting up a master profile representing best-practice processes and KPIs, a template can be established to facilitate smooth global deployment across multiple locations. Local custom work, to support local idiosyncrasies of each particular location is applied to the remaining 20 percent of the implementation. The benefits of such an approach include the ability to hasten the implementation and integration of operations execution across more facilities. Success in this approach can only be achieved when a strong technology deployment mechanism is available to easily group and distribute these best-practice business processes, while also supporting the management and updating of processes on a go forward basis. The Apriso FlexNet platform for manufacturing operations management is one such solution. Once the relevant activities have been identified representing approximately 80 percent of key business processes for typical locations, the application makes it possible to package these processes, distribute them to all locations followed by minimal local customization to achieve economies of scale through repeated uniform implementation of the system. Many manufacturers get started with an MES deployment, to only become stuck, unable to bring all locations on line as part of the roll out. Others complete the task, only to realize that making a future change back to previously implemented systems is time consuming, costly and resource intensive. To that end, they have built a static system to compete in a highly dynamic world. 7 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

8 By enabling the globally managed enterprise regardless of whether processes are centralized or decentralized with complete operations integration to provide visibility from the top floor to the plant floor in real time, it is possible to easily and effectively spread knowledge, best practices and technology worldwide, while at the same time enjoying the benefits of a distributed enterprise. In essence, a Core implementation approach provides a way for manufactures to achieve a virtually integrated manufacturing enterprise, with much needed control and visibility while remaining flexible in operations both at the local and enterprise-level. Define Best Practices Locally, Deploy Globally When evaluating potential MOM providers, be sure to research the implementation experience of standardized processes and best practices across multi-location enterprises. Best-in-class providers will accommodate multiple manufacturing methods (discrete and process), product mixes, specifications and localizations. Platform architectures that incorporate a unified data model will facilitate faster implementations, as less integration work is required, especially when data is already shared across each area of manufacturing operations (production, quality, warehouse, maintenance, etc.). Other technologies to facilitate smoother deployments include a business process- and serviceoriented architecture, supporting widespread, consistent distribution of a set of business processes. Deployment Methodology Apriso s Core deployment methodology ensures a rapid and smooth implementation to help manufacturers realize quick and substantial ROI. From a methodology perspective, accelerated deployment is achieved by treating the FlexNet system as a unified platform that offers a blueprint for standardizing business processes and performance measurements (KPIs) across geographically dispersed sites. However, the system is sufficiently flexible to accommodate necessary local adaptations on a plant-by-plant basis, as well as to support the need to change future business processes as often as needed. This Core approach methodology follows an 80/20 rule of deployment. Eighty percent of the business processes most common within a typical plant are standardized as templates within the FlexNet Global Manufacturing Suite, enabling rapid and efficient deployment throughout the enterprise. By establishing this consistent framework or foundation as the same set of business processes, it is possible to address common requirements of the plant those processes that are key drivers of the business and those which are most uniform across the 8 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

9 enterprise while providing a means for consistent measurement and evaluation of plant best practices. Once this template has been replicated across the enterprise, the remaining business processes can be customized to address site-specific requirements. Using the FlexNet Global Manufacturing Suite, process owners can deploy process flows to specific work stations throughout the enterprise, without re-coding or bringing the system down. The BPM interface hides the complexity of business logic, enabling business analysts to work at the highest level of the process without being exposed to hard coding. Additionally, Apriso helps speed process deployment through its library of more than 130 standard process flows, providing manufacturers with best practice process templates that can be easily expanded or modified. The result is an enterprise-wide system that is highly relevant to each manufacturing site, yet offers lower cost deployment and lower total cost-of-ownership. Additionally, this program provides flexibility and business agility, since changes in business processes can be implemented locally, remotely or globally without hard coding. Cross-Organizational Support: Core Team Approach Championing and executing the Core approach and methodology is best implemented with strong, consistent sponsorship from the highest levels of management in the organization. Best-in-class manufacturers have shown success through a broad, cross-organizational team approach led by the establishment of a Core MOM program office. To be successful, these Core teams are made up of representation from corporate or enterprise organizations (i.e. Industrial Council, Operations Center of Excellence) and supported by the highest levels of executive management. In addition to the corporate or enterprise team, and the Core MOM program office, local areas are represented (i.e. region, division, plant) and actively participate in the development and implementation of the Core MOM system. Through this team approach, the Core MOM program office is best capable to facilitate knowledge transfer between individual plants and enterprise organizations, whereas in the past, plant priorities have prevented sites from driving and fully participating in global initiatives. The team approach enables local plants to manage the pressures of their operational demands, while at the same time participating in a joint program. Together, the crossorganizational team works to leverage a broader set of knowledge in development of bestpractice business processes. These processes are in turn better supported by the plants because they have been jointly developed by the process owners themselves. 9 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

10 Many manufactures Core teams also choose to tap Apriso s world class professional services team, expert in the design and implementation of Apriso s FlexNet. The Apriso team integrates and customizes Apriso technology by providing professional services around the FlexNet MOM platform. By partnering with Apriso, manufacturers benefit from a broad collection of manufacturing and logistics experience. Apriso s world-class network of partners and integrators has extensive consulting and professional services expertise. This experience provides them with the knowledge of which business process flows to expand or adjust to achieve the most efficient process. Their job is to help deploy best practices from a global perspective, while minimizing configuration customization for ease of maintenance. Every deployment leverages Apriso s FlexNet Accelerated Services Track (FAST) Apriso s rapid implementation program. FAST is one of the main reasons FlexNet deployments are the quickest in the industry. With every implementation, a project team is formed to work with the Core team on design, planning and rollout. Apriso s project team works to outline measurable goals, acceptance criteria and test scenarios. Next, they gather requirements, document business processes and develop an Apriso project management plan and timeline. Following this, quality assurance and change management processes are developed. All along, the project team works alongside the Core team, to educate staff on the technology to ensure proper knowledge transfer. This proven methodology ensures support from start to go-live as well as ongoing FlexNet operation. 10 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

11 Conclusion Faced with an ERP system that is effectively running and consolidating back office planning and operations, it makes sense to now try and expand this functionality down to the shop floor. Executing on this vision, however, can be quite challenging. Determining what IT architecture is optimal is the first step; execution on a global scale is the next step. A Manufacturing Operations Management (MOM) system can effectively bridge the gap between corporate planning and plant floor execution. MOM solutions can be viewed as an enterprise solution for standardized operations execution across a global footprint of manufacturing operations. Best in class manufacturers apply the concept of an 80/20 rule of deployment and integration, recognizing that approximately 80 percent of their business process functionality can be standardized across globally dispersed plants. By setting up a master profile representing best-practice processes and KPIs, a template can facilitate smooth global deployment across multiple locations. Local custom work, to support local idiosyncrasies of each particular location, can then be applied to the remaining 20 percent of the implementation. A globally synchronized ERP and MOM solution can enable enormous competitive advantage for a manufacturer, including faster time to global market, reduced waste across operations and a platform for global continuous improvement initiatives. 11 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy

12 About Apriso Apriso Corporation is a software company dedicated to providing competitive advantage for its customers. It does so by enabling organizations to adapt quickly and easily to market changes and unexpected events. Since 1992, Apriso has been helping companies improve manufacturing performance by providing visibility into, control over and synchronization across manufacturing operations both within and in coordination across plants and the product supply network. Some of the world s largest and most successful manufacturers have leveraged Apriso s unique combination of software solutions and expertise to transform their manufacturing operations to achieve and sustain manufacturing excellence. As an adaptive platform for manufacturing operations management, FlexNet manages production, quality, warehouse, maintenance and labor processes to provide visibility into, control over and synchronization across global manufacturing operations. Built with a native Business Process Management (BPM) framework that incorporates a unified data model, FlexNet applications enable continuous improvement and rapid response to market changes. FlexNet delivers a global view of manufacturing operations by utilizing a Service Oriented Architecture (SOA) to ease integration with enterprise applications, such as ERP and PLM, while interfacing with the shop floor and automation equipment. Apriso serves 180+ customers in 40+ countries across the Americas, Europe and Asia. Its customers include General Motors, Lear, Honeywell, L'Oréal, Trixell, Lockheed Martin, Becton Dickinson, Saint-Gobain, Novelis and Essilor. For more information, please go to 12 Accelerating ERP Visibility to the Plant Floor with a Core MOM Rollout Strategy