Evaluating your need for an MES upgrade

Legacy manufacturing execution system (MES) software is often poorly integrated with ERP and SCM systems, which can isolate products in silos. But new MES has limitations you should know before starting an MES upgrade.

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Roughly half of the manufacturing execution system (MES) software out there was deployed in the last six years, a sign that manufacturers are finding that MES upgrades are not easy, according to interviews with analysts.

MES is not easy to connect to the rest of the plant or support, and it runs on old hardware platforms that are no longer viable, analysts say. For example, many MES systems were written for DEC's VAX platform, which is no longer supported.

Manufacturers opting to replace MES software

As more manufacturers look to standardize their MES, many are opting instead to rip and replace the systems. Integration is far easier with most of the new MES systems that are based on Microsoft .NET Web services technology, according to Robert Parker, an analyst at IDC Manufacturing Insights. That's making it much easier to standardize across multiple plants, one of the most important reasons for investing in the new systems, analysts and vendors said.

"If I'm going to have manufacturing flexibility, I need consistent systems," Parker said. "So the movement toward putting new MES in is less about something great about the new stuff. First and foremost, it's because I need a standard reference system running across the plants."

Making the case for an MES upgrade

How can an organization tell when it's time to make a change?

The No. 1 sign that it's time to do something, Parker said, is realizing that there is no longer portability of products between plants because everything is kept in silos.

The rising cost of obsolescence is another sign, according to Simon Jacobson, a research director at AMR, a Gartner Inc. company. Manufacturers consider new systems when the cost of maintaining an MES on an old mainframe goes through the roof, he said.

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The need to make a major business change is another common motivation, according to Jacobson. For example, a company might want to better align its MES with a customer, supply chain, or product supply initiative.

A new MES can cost anywhere from $150,000 to $300,000 for the software license, plus one and a half to three times that amount on services, depending on the complexity and the number of sites involved, Jacobson said. Parker put the cost for a large plant at $150,000, a third of which is the license, two thirds being services.

Implementations started this year are likely to take three to six months for a project of very low complexity, while a highly complex project can last a couple of years, Jacobson said. Parker has seen rollouts as short as six months for a single plant, while slower implementations tend to take 18 months.

MES integration poses some challenges

Newer MES systems, while much improved, still have weaknesses. MES integration is easier than before but can still cause problems, these analysts said.

Parker said that most MES systems handle scheduling processes very well; but for product genealogy, quality management and asset management, it's a mixed bag. What's more, MES is sometimes weak at managing the costs associated with processes. To compensate, companies sometimes buy separate quality management, product, costing, and asset management packages to run in conjunction with the MES, according to Parker.

Also, MES software hasn't gained many truly new functions in recent years. Many of the recent innovations have focused on visualizing the production process and performing analytics. "That's great, but if you're not delivering any value to the customers or increasing their brand value, those things are ultimately rendered useless," Jacobson said.

Although off-the-shelf MES generally performs well, most MES is weak in plant-to-enterprise integration, said Julie Fraser, principal industry analyst and president of Cambashi Inc. Integration can be difficult if the MES and legacy ERP can't cope with the constant reconfiguration needed to support Six Sigma continuous-improvement initiatives, which often require adding fields for data capture and complex feedback loops as processes change, Jacobson said. However, ERP vendors that also offer MES tend to have easier integration between the two packages, according to the analysts.

To ward off these MES challenges, it is important for a company's business and IT sides to collaborate on an MES project, they said. Whoever is setting the operating strategy -- for example, a chief product supply officer -- must be involved in major decisions along with a cross-functional team that brings the leaders of each manufacturing site together with managers of centralized IT.

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