MESA Part 5 – Forging a Path Forward

This posting is a continuation of the “MESA to Change Direction?” posting.  This series discusses how to implement MES systems using a Business Process Management approach, looking at the manufacturing processes and then determining how to implement those processes through changes in how operators perform tasks and the technologies that enable those changes.

It’s not enough to simply hold workshops solve world hunger and sing Kumbaya.   Having a roadmap, a plan for change, and the business case to back up our claims for improvement can make it a reality.

Ok, so we’ve held the workshops…   WHOOHOO!   Exhausting as they are, we’re now armed with some fantastic information. Our four deliverables from those workshops look something like this:

To-Be Process

A process map of how each manufacturing activity will be performed in the Future State.

During the workshops, we sketched these on flip charts or whiteboards at a high level.  Afterwards, we need to create an electronic version with all the details, both in the form of a process flow map, and a textual document describing the process.  Route it through the participants and get their sign-off.   

System Footprint

A mapping of the capabilities defined in the above processes to existing systems and new systems that will be required to support the Future State.    This requires some analysis.  We’ll need to determine which capabilities (or pieces of capabilities) will be performed through modification of existing systems, and which will be performed through acquired systems.  We’ll need to identify those new systems.  How?  Because many of the MES application vendors (MES, LIMs, Data Historians, PLM, etc) have developed and market their products using the ISA-95 standard its usually a straight-forward process to map the future state processes with MES application capabilities.

Interfaces

A collection of “touch point” agreements between systems that specifies each specific interface called out in the To-Be process.   This provides the information we need to get the IT department in gear.  Probably the most important piece of this deliverable though is a Data Walk-Through.  This takes our future state process, assigns real values to the data transferred between systems so everyone can see how their processes will be expected to work.  I can’t emphasize enough how important this is.  Just seeing the real data will bring everyone down to the reality of how the new process will work.

Business Case

A high level business plan that contains:

• Description of the objectives
• A list of requirements
• A Gap Analysis
• A description of the change management issues
•  A migration plan
• Expected ROI’s by activity

Objectives – We’ve already collected these for the workshops, we just need to include them to frame the business case.  We can also provide some high level statements, from analysis of our future state and ROI, for how our new way of doing business will meet our objectives.

Requirements – Since we’ve conducted our workshops based on ISA-95 capabilities and functionality, we need to capture those capabilities and assign a priority value to each.  The intent here is to form the basis for selection of technologies and provide justification for changes in current business practices. 

Gap Analysis – Working from our list of shortfalls from the workshops we can now develop a gap analysis that describes how the new process addresses those shortfalls, or describes the mitigation plan where the processes do not address or solve the shortfalls.

Change Management – By including a change management champion in our workshop sessions, we’ve been able to collect change management issues, bring them into the discussions of future state, and begin the planning to address them.  The list of change management issues may surprise you but it’s imperative that the company is aware of and planning for the changes in how you will do business.  Change issues can range from simple tweaks to the way a department handles a transaction, to an overhaul in how documents are managed and employees are trained or certified.

Migration Plan – No matter how you will proceed, having a roadmap for how you will get there is critical.  A high level technical roadmap that calls out the order and timeframe of implementation of the systems needed to support your future state can provide the budgeting information you need to sell your program internally.   Don’t think it’s all about the budget either, having a plan for implementing fundamental capabilities or capabilities that have far reaching impact in your organization can help you transition smoothly and more efficiently.

Return on Investment – All the work we’ve done in the workshops to determine the costs of the shortfalls we’ve identified pays off here.  Remember that each workshop was set up for a particular set of capabilities or functions, and that we’ve collected the shortfalls, and the costs of those shortfalls for those capabilities.  In addition, we’ve identified estimates of lost opportunities during those workshops.  This defines our ROI for each of those activities.  Having this granular level of ROI allows us to do one very important thing, we can measure it.  Along with the identification of the ROI for each activity, we’re going to identify the KPI that measures how well we will accomplish the improvement we seek.

OK, that’s great!  We’ve got our workshop deliverables.  Now what do we do with them?

Next time – Making It Real

MESA Part 4 – Laying the Foundation for Change

This posting continues our discussion of how to apply Business Process Management methods to implementing MES. 

In previous discussions we talked about the materials we needed to prepare for a series of Consensus Workshops.  What are Consensus Workshops?  That requires a little background. 

What is a Consensus Workshop?

For the selected functional areas (see below) subject matter experts from each of the affected departments or functional areas are assembled to; review the current As-Is state and shortfalls, generate a To-Be state process flow, determine how the process flow addresses the shortfalls and the company objectives and strategy, develop a list of the gaps between the To-Be state and those shortfalls left unaddressed, and address the change management issues related to the future state processes.

What are the topics for the Workshops?

The full list of topics available for holding Workshops follows the ISA-95 Model:

1. Production Control
2. Quality Assurance
3. Maintenance Management
4. Material and Energy Control
5. Product Inventory Control
6. Production Scheduling
7. Procurement
8. R&D
9. Order Processing
10. Cost Accounting
11. Product Shipping

Some notes on this list:  You can usually combine Material and Energy Control with Production Inventory Control under a single topic Inventory Management (as it is in the MOM).  This allows you to address raw materials, WIP, and finished goods discussions in a single workshop.  If Energy Control is a significant topic, create a separate workshop for it.  Don’t discount the Cost Accounting and Order Processing discussions, they may be short but they can be significant.  For example, determining how product unit costs are evaluated can affect critical KPI’s and incentives.

How do we select the topics?

As you prepare the As-Is state process flows and gather shortfalls for the way you currently do business, a picture emerges of areas that need attention or present opportunities.  You could hold a workshop for each area of the ISA-95 model, one for all the activities in Production Control, one for all the activities in Quality Management, one for all the activities in Procurement, etc.  Do you need to hold a workshop for every area?  That depends on how comprehensively you intend to apply an MES system.  Another way to look at it is to identify those areas with the most problems and the most opportunity for payback.  It’s a trade-off, expediency and short-term payback versus comprehensiveness and longer term payback.

A few of the advantages of selecting a limited number of areas are;

• It is usually easier to determine the true ROI for change.
• It’s easier for participants to understand the value of the change. 
• It requires fewer resources to implement.  

Remember it’s a trade-off.  There are also advantages to the comprehensive approach;

• Having a full picture of the numerous and various interfaces between systems and implementing them one time is much more efficient, 
• Even if you don’t implement all of the future state or To-Be processes you will have a long-term plan to work towards,
• It’s easier to implement full-scale change while you have your foot on the gas.

Next Time:  Creating the Framework for Change

MESA Part 3 – Delivering Value through BPM Workshops

This post continues the discussion of how to apply Business Process Methods to implementing MES based on the ISA-95 standard.

As you recall, we had to develop some material before holding consensus workshops.  It goes something like this :

1. Use the ISA-95 definitions for manufacturing activities and determine those performed
2. Determine the strategy and objectives of top management. 
3. Develop an As-Is state in the form of a process flow for each activity
4. Determine the shortfalls, issues, and requirements for each activity

This material provides the framework and focus for consensus workshops that will be held to determine how to both address identified shortfalls, and to reach the objectives of top management.

So, what do we expect to get out of the workshops?  In order to develop a justification and plan for reaching the aforementioned objectives, we need some supporting material:

1. To-Be Process – This is a process flow that has been modified from the As-Is process flow we bring to the workshop for each activity.  Again, this is a high level flow that shows how the basic activities are performed and the information flows between different activities, systems, and resources.  Don’t forget to put it down on paper.  A textual description of the process flow goes a long way in clearing up the understanding of what’s going on.  I usually put this into a companion document that accompanies the process flow.
2. Systems Footprint – Although we’d like to focus discussion on the process alone, independent of which system performs each.  As much as we’d like to believe we can start over and make everything work in an optimal way, it’s not completely practical.  There are legacy systems that already perform some functions, and initiatives for new systems that will pick up other functions.  Without getting into details, a high-level mapping of functions across existing systems will help to determine what the technical roadmap for implementation will look like.
3. Business Case – Here’s where collecting those shortfalls in the As-Is state really pays off.  If we assign an issues Champion to bring real-life examples of each shortfall, and an estimated cost per occurence, we can start to build a case for ROI.  This goes a long way in addressing the savings and efficiency aspect of the business case, but we shouldn’t ignore lost opportunity costs.  If we consider the revenue impact of reaching the objectives laid out by top management, we can calculate the impact of increased revenue as well.  Consider the example in my previous post “MES for Competitive Advantage.”  During our workshop, we should capture how the To-Be process will address the shortfalls and provide competitive advantage.
4. Change Management – How a company addresses change determines how successful the MES implementation will be.  It’s critical that a Change Management Champion, CMC,  attend every workshop, capture issues requiring change in related functions, departments, and systems.  The CMC will be a liason role that communicates the impact of the proposed To-Be state.  It is critical that the CMC has the full and real support of top management.  Change can be difficult and it will be important to identify areas of resistence, overcoming resistence, and determining the cost for change.  In addition to determining the impact of change, the CMC will also identify those areas that will require either modification of training or additional training.

 This is material that we develop during the workshop.  It doesn’t have to be detailed or pretty.  It does have to address the shortfalls and objectives, so keeping the conversation focused is important.   

What workshops should we hold?  The workshops should be organized at a level high enough to capture one of the major areas in the ISA-95 framework (for example:  Quality, Production Control, Inventory Management, Maintenance, Procurement, etc).  Each workshop will address a series of activities performed for an area.  For instance, a Quality workshop might address:  Test Definitions and Distribution, Testing Procedures (in-line, at-line, off-line),  Material Review Board, MRB, procedures for rework, Quality analysis procedures).  These are by no means complete, but they should address those areas where the shortfalls are significant and are critical to meet the objectives laid out.

Who should attend?  Representative Subject Matter Experts, SMEs, that either appear on the As-Is process flow, or subject to change with the anticipated To-Be process.   As much as manufacturing companies hate to commit these resources to these kinds of workshops, because they were hired to actually produce things, their participation is absolutely critical to the success of the proposed changes.  Without their input and consensus, there will be resistence to change that is not always possible to overcome, and mistakes made in both requirements and implementation strategy that will be costly to remedy.

Next time – Laying the Foundation for Change

MESA Part 2 – Business Process and MES

This posting is a continuation of the “MESA to Change Direction?” article that pointed out the results of an Aberdeen Group survey suggesting MESA may want to emphasize Business Process Management approaches to MES implementation.

It’s Not an IT Initiative

Most MES practitioners have been through the following scenario…. The client asks you to implement an MES package and gives you a set of requirements for configuration.  The IT Team is the only source of information you have.  It’s an IT initiative.  Requests for Production, Quality, Maintenance, and Engineering participation fall on deaf ears, token attendance at meetings is the best they can do.  You know it will be a disaster.  IT will love it, production won’t use it, cost accounting could care less, quality is mad, and engineering will do everything in its power to subvert it.  It will be dead before it hits the first terminal.   Besides the change management issues here, there is an obvious gap between the top floor and the shop floor.  Production, Quality, Engineering, and Maintenance not only need to be part of the change, they need to be driving the change.  Methods for Business Process Management really can help.  Combining BPM with the ISA-95 model is even better.  The ISA-95 model (part 1 and part3) does a great job of outlining the manufacturing activities that 99% of all manufacturers do now, or should do.  They also suggest how those activities might interact with others.  This is the real power of the ISA-95 standard, it provides a basic template to help companies organize, review, and improve how they do business.

Game Plan

Combining the ISA-95 model and Business Process methods is really very straight forward:

• Provide Focus – Get the company objectives and strategies from the top.
• As-Is State – Determine how manufacturing activities are currently performed
• Future State – Hold Consensus Workshops to determine how activities will be performed in the future
• Roadmap – Develop high-level process flows, requirements, and how they fit into a timeline

Providing Focus

Effective BPM relies on a cohesive and coherent framework.  It is absolutely critical that top management provide that framework in the form of goals and objectives for manufacturing.  For example, the VP of Operations may have objectives related to product mix and manufacturing flexibility.  The VP of Quality may have objectives related to minimizing and tracking product escapes.  Those objectives provide the constraints and focus for consensus workshops used to develop new or improved manufacturing/business processes.  This seems extremely obvious, but the simple process of getting the message from the top and using it to provide focus during discussions is invaluable. 

As-Is State

There are three universal truths about a Company’s thinking on the way they currently do business:   1) They’re pretty sure the right people know how it works, 2) It isn’t true, and 3) They really hate putting it down on paper.

The second item becomes clear when a company actually does put it down on paper.  Yes, Betty in procurement knows exactly how to order inventory restock from consumed inventory last month.  She doesn’t know how Bill the Production Manager counts production and consumes inventory.  Getting it down on paper lets both parties see the bigger picture.  This is key if you want both parties to understand the value of information exchanged between functions.   And you do.  Determining the impact of shortfalls and improvements requires this more holistic view.

Using the ISA-95 activity model is a great place to start discussions on the As-Is state.  As an example, consider the following activity descriptions:

2.0 Production Scheduling	Description
2.1 Availability	The ability to determine the availability of all resources required to produce items contained in a production order.  This may include raw materials, labor, and equipment availability and/or capacity.
2.1.1 Provide finished goods availability to Order Processing	The ability to provide the availability of finished goods inventory items.  This allows the planner to plan production for the shortfall between requested sales order quantities and existing finished goods quantities for that item.
2.1.2 Provide available production capacity to Order Processing	The ability to determine the capacity of the available equipment necessary to produce a given item.

 

These activity descriptions provide a guide and a focus for subject matter experts , SMEs, during discussions and laying out the process flow for each activity.  What’s a process flow?  It’s a way to graphically represent what’s going on in each activity.  Here’s an example:

 

Process flows show the high-level activities and how they exchange information with different functions and resources.  It’s a great way for SMEs from adjacent functions to understand what is happening without getting bogged down in the details.

An important second step in putting together an As-Is state is identifying the shortfalls.  This should be an issues list with examples.  Assigning a SME to determine the costs associated with a shortfall, based on the example, is a great way to begin to identify both the cost of doing business, and the potential ROI for future change.

Next time:  Developing the future state.

MESA to Change Direction?

It looks as if MESA might be rethinking their MES strategy. 

 A recent survey conducted by the Aberdeen Group showed several very interesting results.   The survey compared the general population of manufacturers versus those manufactures belonging to MESA.  One of the most striking themes showed that the top of class in the general population valued and made better use of Business Process Management methods when integrating/implementing MOM capabilities.  A correlating factor in that result showed that top management for the general population was more involved in MOM projects than MESA members.   It also showed that the general population payed more attention to integrating with other ERP and Supply Chain systems.  Hmmmm….  How does this cause MESA to pause and think?  I think the gist of it is that MESA will take a harder look at how to present and position Business Process Management methods relative to the MESA model and the ISA-95 model.  While the absence, and need, of Business Process methods may not be new to most MES practitioners, it is certainly a welcome sign that MESA now thinks so too.

Another interesting result showed that the bottom tier (the bottom 30%) from the MESA group ranked highest in adopting MOM technologies, even above best in class.  In addition to being the top technocrats, the bottom tier paid less and got better ROI.  This I think speaks to the fact that the best in class are the early adopters and pay a premium, while the bottom tier took advantage of competative pricing. 

The results were presented in a  recent MESA webinar; “Manufacturing Operations Management: Insights for MESA Members.”  It was presented by Matthew Littlefield from Aberdeen Group for MESA.