A few weeks before Gartner Research and MESA.org published their annual MES/MOM survey results [1], LNS Research released some survey results from their report, “The Global State of Manufacturing Operations Management (MOM) Software,” [2] with consistent positive trends for the adoption of MOM systems in manufacturing.
#1 - MOM is an Enterprise Level System
Why have MOM systems moved up to enterprise level importance? Manufacturers have realized that manufacturing processes are important after all. It is not enough to engineer a product and rely on outsourcing manufacturing processes. The brand owner becomes too dependent on the contract manufacturers and suppliers can become competitors after a few years of experience in the market. There is also an understanding that the old paper-based procedures of the old factory will not cut it in the new manufacturing marketplace. The path to a digital enterprise with a digital thread from engineering to production and supply chain starts with replacing the old paper-based procedures.
In the LNS survey, 68% of manufacturers are viewing MOM as part of an enterprise strategy versus 32% that see it as a plant level decision. The MESA survey also showed that 77% of manufacturers where budgeting and approving MOM systems at the enterprise level. MOM is viewed as a key bridge to realize the digital thread in the enterprise closing the gap left between engineering, shop floor, procurement and financial systems.
#2 - MOM has Real Return on Investment
Leading companies are sharing their MOM success stories in surveys, at conferences and press articles, and the word is getting out. The LNS report shows that implementers of MOM/MES systems have improved Total Cost Per unit by 22.5%, Net Profit Margins by 19.4%, and On-Time Delivery by 22%. Improvements for MOM users were generally double the average among all respondents.
Areas of improvement include:
- Common user interface across the enterprise
- Elimination of duplication of input
- Integrated interdepartmental information
- Platform of interdepartmental collaboration and workflow
- Closed-loop quality management
#3 MOM has Fast Return on Investment
MOM projects are achieving quick returns. Return on Investment (ROI) is achieved in less than 1 year by 47%, and less than 2 years by 81% of respondents. These numbers are consistent with the number of respondents finding more out-of-the-box (OOB) MOM solutions that fit their needs. Over 30% of manufacturers were able to support 80% of their requirements with OOB functions in their selected MOM solutions. This is consistent with the findings in the MESA report which showed a big decrease in the amount of customization performed in MOM software implementations.
#4 - MOM Adoption is Driven by Competitive Pressures
Perhaps because the surveys asked slightly different questions, it is interesting that the top drivers and challenges listed by LNS are not the same as those reported by MESA. In the MESA survey the top three benefits from MOM were: increasing product quality, reducing operational cost, and improving operations visibility. In the LNS survey the top drivers included: increased number and complexity of new products, lack of collaboration across departments, inconsistent data from disparate systems, and lack of coordination across the supply chain.
A general theme among all the listed drivers is that competitive pressures are making manufacturers take notice that systems like MOM are needed to complete the digital thread in the enterprise. The capabilities gap between the Have-MES and the Have-No-MES companies will continue to grow. Companies that adopt and integrate an MES/MOM system will have a significant competitive advantage moving forward.
For more information on the LNS Research or MESA/Gartner reports check out the reference below.
References:
[1] “Four Good Trends for Manufacturing Execution System Adoption”, manufacturing-operations-management.com, 2015
[2] “The Global State of Manufacturing Operations Management Software - Weaving the Digital Thread Across Industrial Value Chains”, LNS Research, 2015
[3] “Has MES Come of Age?”, Recorded webcast by Julie Fraser of IYNO and Rick Franzosa of Gartner, MESA.org, 2014
https://services.mesa.org/ResourceLibrary/ShowResource/47eff093-b4f9-417e-9aa1-1ddbf3e82757