Take advantage of this stoppage/slow down to advance your selection process
During this crisis caused by the new coronavirus, there are three fundamental aspects to be considered, in descending order of importance: 1) stay safe – take no unnecessary risks; everything else is secondary; 2) guarantee the supply of minimum goods and services – do not hoard; 3) do your best to make this outbreak have the least possible impact for your organization – it is very important that organizations continue to exist and remain healthy.
Although some companies, such as tourism and restaurants, will necessarily have very difficult days ahead of them, there will also be countless difficulties for manufacturing companies, related to people’s fears, to the logistics of supplying raw materials and shipping products, and even to possibly forced stoppages.
However, there are several activities that not only do not have to stop, but with a stop or slowdown in operations, can even gain new breath. More strategic activities, for which it is necessary to allocate time and resources, are ideal for these phases. The selection of a MES (Manufacturing Execution Systems) solution is one of those activities.
Why start a selection process now?
The selection process for a MES system is by nature time consuming. If this downtime is properly used by the manufacturer, for all phases in which physical contact is not necessary once restrictions are lifted, it will be in ideal conditions for the final stages of the process. So, not only can you take advantage of the downtime or slowdown, but you will be prepared to have a restart faster than your peers.
MES suppliers still remain in full availability. Software companies are one of the very few that feel the least impact in terms of work, since workers can do it from home, and can handle many (if not all) aspects remotely.
In the sections below, we’ll analyze the main phases of a MES selection process and describe which of those can be done remotely.
1. Building the Business Case
The first phase is related to the construction of a business case. Contrary to popular belief, it is not the MES supplier who determines the ROI, but the company itself. The supplier can and should provide the necessary framework, but the exercise of applicability and measure of the real expected benefits must be done internally.
This analysis usually groups the MES benefits in four categories: Productivity, Quality, Regulatory Compliance and Agility:
- Productivity considers improvements in Production Volume, Cost, Work-in-Progress and Cycle Time
- Quality considers improvements in topics such as Production Yield, Product Performance, On-Time Delivery and Customer Production Returns
- Compliance includes benefits from Process and Regulatory regulatory enforcements and from Tracking and Traceability
- Agility considers the improvements in time and cost to introduce new or modified Products and Processes
Obviously, it is necessary to counter these benefits with the costs of the solution to build your business case:
- MES-related hardware depreciation – Recurring cost (not incurred if hardware is not renewed at the end of depreciation period)
- MES-related software licenses – One-time cost, during the project implementation (not considering other installments or pay per use models)
- MES-related software maintenance – Recurring cost, post project implementation, which typically includes access to new software versions and product support
- MES-related implementation services – One-time cost, during the project implementation, including configuration and integration
- MES-project implementation internal employees’ time – One-time cost during the project implementation (considering the operational MES utilization is part of their daily job)
- MES-related operational costs – Recurring costs, costs related with training, operation and administration of the MES system
- Opportunity costs: if you didn’t invest in MES, what could you do with the funds to achieve the same/similar results? Normally, this is zero/negligible, since it’s difficult to find solutions that bring the same level of benefits as a MES
Using the data that manufacturers have of their own operation, this phase can be done completely remotely. This is a crucial stage for getting the management buy-in, securing the necessary budget and aligning the project expectations by providing the boundary conditions in terms of time, scope and budget for the MES project implementation.
2. Defining the MES requirements
Defining the requirements early on is of utmost importance, because this will be the foundation for doing the overall MES vendor screening and selection, and even the real implementation later on. Such requirements are normally grouped in three categories:
Functional – determines which functions must be provided by the MES application. It is very important to note that these functions must extend to all physical (transformation, logistics, etc.) and business (production, engineering, maintenance, quality, etc.) processes – in short, all processes that are in one way or another related to the shop floor. A good way to organize this is according to the MESA International model, which defines the 11 MES Functions.
The Technical category involves analyzing the technology, the obsolescence risk, the integration capabilities, the scalability and availability, latency, extensibility and user interface ergonomics among other considerations.
Finally, consider Business Requirements. This involves other relevant aspects such as:
- Vendor size – the ideal dimension should be considered, in order to guarantee implementation capacity and continuity, but simultaneously a dimension that gives relevance to the client
- Geographical presence – support directly or through partners
- Partner network – the existence of a solid partner network is important, not only to guarantee the aforementioned geographical presence, but to provide alternative implementation and training services
- Financial situation – essentially linked to business continuity and scaling capabilities
- Product references, particularly within the segment or vertical, which basically certifies the ability of a supplier to successfully do business in your area
- Product roadmap – the inability to clearly point to next versions and new planned functionality may show a product at the end of its life
- Level of training offered, with emphasis on the availability of e-learning, which is extremely important
- The quality of the documentation provided, covering user manuals and how-to-guides; administration, installation, and troubleshooting; extensibility guides; etc.
- Processes and capabilities related to support, including solid processes, a support portal and 24×7 hotline
- Other contractual-related requirements
Creating the entire set of requirements is a lengthy and effort intensive job, but again one that can be fully prepared remotely.
3. MES Vendor Screening
The next phase is the MES Vendor Screening. Once the requirements are set, it is obviously not practical to analyze every single MES vendor against them. So, the best approach in this phase is to get information from an Internet search, an expert consultancy (there are several companies which can provide advice), or using market research (from Gartner, IDC Insights, ARC Advisory, LNS Research, or MESA.org, just to name a few).
One of the main aspects to consider is related to the experience of the vendors in certain market segments. Although many indicate a presence in these verticals, this factor must be confirmed, for example by third market research analysts or customer testimonials.
The target list should be to come down to 4 to 6 potential candidates. Sometimes we see initial lists of 15 or 20, and this doesn’t make sense at all. A list that is too broad means that the basic scrutiny of possible providers has not been done, and a supplier might not even reply to an RFI (Request for Information) or RFP (Request for Proposal) under such conditions.
Once again, the work related to this phase is not trivial, but the good news is that it can be done fully online, and hence from home, if necessary.
4. MES Vendor Filtering
So now that you have the list of possible MES vendors to work with, the next step is to narrow it down to the top two candidates. The list of requirements should be sent to vendors in the form of an RFI.
A good practice is to prepare an evaluation matrix with different weights based on the list of requirements. This should be prepared before questionnaires are sent out to avoid any bias.
Particularly on the functional requirements, another good practice is to request the supplier to provide information on how they meet each requirement (categories could include out-of-the-box /configuration vs customization /extensibility), as this provides a very good indication of both the native capabilities of each system and also of the extensibility options.
Surprisingly, or not, the two next activities for MES vendor filtering can also be done remotely. The first is the product demo. This should be arranged with suppliers, who can do it all remotely; this is actually becoming a common practice, even before the situation of coronavirus outbreak. One important aspect is in addition to the general product demonstration, to request the demonstration of key complex scenarios relevant to your manufacturing operations.
The other is customer references. While it’s relatively common for companies to request site visits to see the software running in a live production site, the majority of what the selection team wants to know can be done in a normal call. It’s all about getting the right confidence levels about the vendor’s ability to meet your functional and non-functional requirements which are important for your specific segment.
Finally, it’s important to note that although this has been so far described as a set of activities that can be performed remotely; this does not mean that it should be determined by a single individual. Quite the contrary, the involvement of a multi-disciplinary team with different views and needs for the application is a critical success factor.
Therefore, have the different stakeholders fill in the evaluation matrix values for each vendor and consolidate them at the end of the decision making process in order to come to a final result. The top two candidates, after validation by the steering committee, should then be selected for the next phase.
5. Proof-of-concept, bidding and final selection
In this phase, there must be a proof-of-concept for each of the two candidates, through which the providers shall perform a more extensive demonstration of the different key scenarios. In addition, the primary MES users should have the chance to get hands-on experience with the product. While this is more challenging to do remotely, it is far from impossible. Again, we’ve done cloud-based installations for customer tests, even though they’d have the software installed on- premises. Sometimes a separate group, but often the same team, evaluates the proposals from the suppliers in context with the timelines and efforts.
The two teams can run their activities in parallel: the team dealing with the contractual aspects and the one dealing with the financial proposal.
The evaluation matrix developed in the MES Vendor Filtering Phase should be supplemented with additional information that reflects the degree of fulfillment and quality of the proof-of-concept, as well as with additional contractual information (the price and the timeline).
Once again, none of these require physical presence– all can be done online.
Start now and get it going
For some of the later aspects of the selection process, it is natural that teams get more comfortable by doing them in physical meetings, but many of the referred-to tasks can be done entirely remotely. The downtime can be effectively used, and the start of the project can be done relatively quickly, once the situation normalizes. Don’t waste time. If you have an MES project planned, get it going now!