Manufacturing Execution Systems (MES) continue to be a source of competitive advantage - prompting more manufacturers to implement them than ever before. Unfortunately, many of these companies soon discover that MES solutions are overly complex and inflexible, and can result in extreme cost overruns, significant roll-out delays, and ultimately, a negative impact on business performance. Although every situation is unique, our research has shown there are four common reasons why MES initiatives fail. These reasons are outlined below.

Common Reasons Why MES Fail

1. Severe under-budgeting on the part of manufacturer
2. The attempt to automate too many dynamic processes
3. Poor alignment of expectations between the MES vendor
4. The over-complexity of MES solutions in general

These problems with MES implementations have done more than their share to make many manufacturers skeptical of MES technology. But at the same time, they have created a significant opportunity for a handful of software vendors to create robust and adaptable MES, resulting in less expensive alternatives. These vendors minimize the complexity and risk of MES projects by providing manufacturers with a more simplified – and affordable – approach to capturing, managing and executing mission critical processes.

In contrast to offering every feature for every possible manufacturing scenario, these adaptable MES systems limit their focus to only those that provide the most significant impact to manufacturing operations.

As a result, these systems offer a much shorter time between implementation and achieving the core benefits offered by MES technology - increased work efficiency, reduced operation costs and improved manufacturing execution with enforced compliance to SOP’s (Standard Operating Procedures).

The cost of a MES system can still be significant.

With the average Tier I MES customer spending $1 million and more on MES, the likelihood of a system ultimately being affordable for your company is small. Even a 50% reduction in price – which most MES vendors are not willing to do – could result in a project cost of well over budget.

So, having the flexibility to implement – and pay for – only the functions & features your company requires can make a real difference in the system’s total cost of ownership (TCO).

The MES pricing model is based on service revenue.

Of the overall price of a larger MES system, between 50% and 75% is service revenue for the vendor - money paid for implementation, maintenance, support and upgrades. Although an MES solution can be stripped down, the software-to-service-ratio will, for the most part, remain the same. In these times of tight budgets and mandatory return-on-invest (ROI), 1-to-3 or even 1-to-2 software-to-services ratios are unacceptable for many companies, and the opportunity to handle at least some of these tasks in-house is crucial.

With a less complex and adaptable MES, this flexibility can lead to a significant opportunity for companies to lower their initial costs and achieve higher and more rapid ROI.

Selecting the right MES Vendor

As with any enterprise software evaluation process, there are a handful of important questions that must be answered prior to selecting a vendor. It is critical that your selection team provide detailed responses to the following issues:

• Company history – Has the vendor been in business for a number of years? Do they have a track record of solving problems for manufacturers? Does the product line demonstrate progressively more advanced functions & features developed?

• Financial stability – Will the company be around tomorrow to support the system you have purchased? Are the vendor’s sales growing and not shrinking? Does the company have a sufficient amount of capital reserves in case of an economic slowdown?

• Customer base – Does the vendor have a long list of satisfied customers? Are the majority of these customers available as references? Can the vendor prove it can keep customers happy over the long term?

• Implementation success – Has the company ever had failed implementation? If so, how often and how recently? What were the reasons?

• Key functionality – Does the vendor offer functions and features to cover all major manufacturing aspects, e.g.:

1. Alerts and alarms
2. Bar code and RFID data collection
3. Certified host (ERP) interfaces
4. Configuration tools
5. Device and machine integration
6. Management reporting and visibility
7. Paperless shop floor activities
8. Real-time information flow

The good news for manufacturers is: lower costs, reduced risk, faster implementations and less complexity - without sacrificing the functionality that supports complex manufacturing operations are more and more becoming a reality with today's MES systems.

Free Consultation

MES systems can provide manufacturers with the tools necessary to cost-effectively increase productivity, eliminate non value-add activities, decrease operating costs and eliminate the potential for errors and waste.

We at Factorytalk believe this so strongly that we will support our customers during the educational process through white papers, presentations, conferences, an in some cases, person-to-person assistance.

We will walk you through the ROI justification process, and provide you with the information necessary to determine whether an MES system is a good fit for your company.

Simply contact the Factorytalk team and “Call in for a Coffee” for a free consultation

We are located at :
Factorytalk Co., Ltd.
12th Floor, Liberty Square
287 Silom Road
Bangrak, Bangkok
10500 Thailand
Telephone : +66 (2) 630-4525      
Facsimile : +66 (2) 630-4527

Factorytalk Pte Ltd
25 International Business Park,
#04-106-107A,
German Centre,
Singapore 609916
Telephone :  +65 6562 7634       
Facsimile : +65 6562 7635

E-mail Address :
contact@factory-talk.com