MES

Choosing an MES Solution Based on the Elusive ROI

By Mark Hungerford
13 Jan 20

You might be thinking, return on investment: I can't imagine ever getting our money back for something that's taken two years, and many full time equivalents labor. But in reality, this should be a big factor in deciding what MES solution you decide to go forward with and what will be best for your company/plant.

 

It seems the magic number for the past few years is 2 years or less ROI.  Many projects don't even get a first look without the potential to deliver some pretty quick savings. This blanket ROI threshold that many companies stand by can create huge challenges for a traditional MES implementation. Often the project itself takes 2 years.

Identifying the problem is a first key step and identifying what the return on investment truly going to be. As such the opportunity is what determines the return on investment. For others its all about risk mitigation and avoiding a catastrophic event that may negatively affect the plant, company or brand. For these companies the ROI is avoiding these types of issues.

 

Many companies will actually identify an ROI, or a specific target that they need to achieve, and then back into the problems or opportunities that make up the target. The trouble with this method is that oftentimes they end up having to resort to more extreme methods such as cutting heads or closing facilities to achieve an inflated targets.

 

Once you've identified your problem. Let's say you have an issue with quality or scrap or you have a material over usage issue, or maybe your, your productivity, or efficiency isn't where you needed to be. These are real opportunities right that can be reduced through process continuous improvement.

 

Let's use the over usage. In this example, let's say you use million dollars worth of over usage in a facility over the course of let's say a year.

 

Once you identify that over usage you can understand how your MES can the real value, you may find that some of the over usage is built in just based on material design or process incapability. So maybe 750,000 of that's true opportunity. Not saying you can't fix the other parts of that, but it may just be

outside of the scope of the MES project.

 

So now once you know the target so 750,000 over usage. You can identify exactly what can be done with the data from your MES to help resolve those over usage issues that would should be to identify where the gaps are what processes are those gaps included in, what are the biggest factors related to those gaps. When is it happening all the necessary details.

 

The next big step of the ROI calculation is to identify what resources both financial as well as manpower, are going to be required to solve those types of issues. This is not only the implementation of the MESs software and support as well as training and ongoing support, but also the amount of resources that it's going to take to actually solve the problems.

At the end of the day, in order to achieve hard savings. Sometimes you have to spend a little money and invest a little time and resources. Up front ends in foundational systems to help give you the information you need to help solve some of the critical processes you have in your plant.

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