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MESA Conference Wrap-Up

WEB EXCLUSIVE: Last week’s MESA International conference provided insights on improving manufacturing competitiveness.

“Achieving Business Success through Manufacturing Excellence” was the theme for the MESA International 2003 Conference of the Americas, held Sept. 7-10 in Bloomingdale, Ill.

MESA (for Manufacturing Enterprise Solutions Association) International is a Chandler, Ariz.-based not-for-profit organization that focuses on education and guidance for manufacturers in the effective use of information technology solutions. MESA this year expanded its charter to include manufacturing end users as part of its membership base, in addition to information systems providers.

In line with that initiative, the first day of the conference was largely dedicated to presentations by representatives of manufacturing companies whose solutions were deemed illustrative of manufacturing excellence. Companies that made presentations included Barber Foods, Coors Brewing Co., Corning Inc., Cybex International, IBM Corp., KLA-Tencor, Kraft Foods Inc., SonoSite and Willamette Valley Co.

One first-day highlight was a presentation by keynote speaker Carol A. Ptak, vice president, manufacturing industries, at PeopleSoft Inc., based in Pleasanton, Calif. With more than two decades of experience as a practitioner, consultant and educator in manufacturing operations, Ptak is known as an authority in the use of Enterprise Resources Planning and Supply Chain solutions. Her latest book, “Necessary but not Sufficient,” was co-authored with well-known author Dr. Eli Goldratt (“The Goal”).

Ptak told conference attendees that competitive conditions for manufacturers worldwide have changed due to the emergence of the Internet. Power has shifted to the customer, she said, who is demanding ever shorter response times. It’s a shift that has changed the rules of business. “The only competitive advantage for manufacturers is a win-win between you and your customers and you and your suppliers,” Ptak said. “We’re not living in a world today where it’s individual companies competing any more. It’s supply chains competing against supply chains.”

Manufacturers need to find ways to solve customer problems in ways that uniquely leverage their capabilities as manufacturers, Ptak advised. Every company is different, she said, and the vision to understand what a company is uniquely capable of is a major constraint in manufacturing today. Manufacturing technology is not in short supply, said Ptak. But technology can produce a return on investment if, and only if, it addresses a limitation that the company faces in achieving its vision, she said.

Analysts Speak Out

Among highlights of the second day of conference sessions was a lively roundtable of industry analysts. Participants included David Cahn, chief executive officer of Atlanta-based Y2G Associates, Julie Fraser, principal with Industry Directions, in Cummaquid, Mass., Greg Gorbach, director of collaborative manufacturing research for the ARC Advisory Group, in Dedham, Mass., and Bill Swanton, vice president of research for AMR Research, in Boston.

The analyst panel addressed the questions, “Where’s the value of MES (Manufacturing Enterprise Solutions); what’s worked for manufacturers; and what lies ahead?” Swanton discussed recent research at AMR that showed an average payback period for MES projects of about 12 months. “Users see a hard return on investment through reduced cycle times, inventories and reworks.” In 12 to 36 months after completion of the MES project, users achieved 3 times benefit to cost ratios, claimed Swanton, in areas such as faster time-to-market, traceability and flow manufacturing. “The greatest benefit payback is three years after deployment,” continued Swanton, “with users gaining 10 times benefits through collaboration and supply chain visibility.”

ARC’s Gorbach said MES is at the beginning of a “leapfrogging” in technology due to changes in the competitive dynamics of manufacturing. Business processes are migrating from transactional to real time, with the status quo of “plan, execute, and analyze” being replaced by real-time performance management techniques. “It’s not manufacturer vs. manufacturer anymore, but rather network vs. network.”

Building on that theme, Fraser, of Industry Directions, noted how the historical perspective of implementing MES projects now needs to be reversed. In the past, a project would build from data storage, to automating transactions, to supporting local and business decisions in order to drive performance and success. “What works today is doing this process in reverse. Define success and figure out how to make the important decisions, and then start to automate transactions.”

“What’s the value of MES? It’s all about the money,” said Cahn of Y2G. Both MES vendors and manufacturers all have the same goal—increase value and attain savings through better quality, reduced compliance costs and improved inventory control. “Typically, labor costs comprise 15 percent or less of the cost of a product,” said Cahn. Rather than just looking to outsource labor, manufacturers should reap savings through better inventory management and reduced product content. “It’s not about the best product, it’s about execution,” said Cahn, “and there are new MES solutions coming out that will optimize even the most complex manufacturing environments.”

Integrate Enterprise with SP95

One of the emerging standards to help integrate enterprise solutions with control systems is the ANSI/ISA SP95 standard. Dennis Brandl, of BR&L Consulting, in Cary, N.C., presented a summary of the standard and how it relates to MES. “SP95 deals with all of the systems that work with people, materials and equipment to get product made,” Brandl explained. “SP95 will help integrate logistics solutions across different systems and cultures, and will provide manufacturing benefits independent of the industry because it’s based on industry standards and best practices.”

Brandl, who is a member of the SP95 integration committee, editor of the standard, and chairman of the IEC and ISO Joint Working Group on Enterprise/Control Integration, said the first two parts of the standard have been released. Part 1, on models and terminology, defines the structure of the information that flows between manufacturing and other areas. Part 2, on object attributes, defines eXtensible Markup Language (XML) schemas for object models. Part 3, on activity modes, is in draft, and describes information collection activities first outlined in MESA white papers. Visit www.isa.org/standards for more information.

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