Buying a new manufacturing execution system (MES) would suggest a project that entails defining requirements, gathering a cross-functional team, investigating solutions, and going out to buy an MES. Except that last part can be a killer. Actually purchasing the MES implies someone approved the purchase and you got the funding to proceed. That can be easier said than done.
Expensive software investments require financial justification and a sound business case to gain executive sponsorship before you can make your purchase. At Fabtech 2016 in Las Vegas, I did a presentation on this very topic of selling a production execution software solution within your organization. In preparation for the session, we researched a number of sources to validate our opinions that the root cause of why a process improvement initiative such as MES fails to get off the ground is typically due to a lack of a sound business case from which to proceed.
It is not generally a requirement for most managers to assemble the financial justification needed to adequately inform executive management of the merits of their ideas and gain executive sponsorship for their initiatives. Instead, they launch their idea by assembling teams and going out to research products. Some will not even formally define their requirements. Presumably, their assumption might be that the returns and the merits of the system will become apparent through their assessment and in turn the value and justification will be obvious. But it is not that simple, and the cart is well before the horse with this approach.
Cross-functional teams, requirements gathering and value exploration are all necessary steps, but will die on the vine when faced with an unsupportive executive team. Managers need to understand the overall business objectives and how their product or idea enables those higher-level objectives. Some of the higher-level business objectives might be:
- Reducing costs of manufacturing
- Reducing waste
- Improving order timeliness
- Improving quality
- Improving customer satisfaction
The largest companies still have budgets that need to be considered, and the executive team holds the key to the purse strings that enable all projects, not just yours. And having the expenditure in your budget has nothing to do with the approval you need when the time comes to spend the money. Executive management will require financial justification and clear designation of business benefits before approving any significant expenditure.
The “MESA Metrics Guidebook: ROI and Justification for MES” is a really valuable resource to help guide you through a thoughtful process of gaining approval for your MES project. The guidebook offers detailed information about how to initiate an MES project and justify it through return on investment (ROI) metrics and by building a compelling business case. The guide is one of many practical educational resources you can gain as a MESA member. There are currently some publicly available manufacturing technology and business resources that can be found in MESA’s smart manufacturing portal and smart manufacturing case studies. The case studies will help you better understand what your manufacturing business can accomplish through using technologies such as MES.
The definition of requirements and evaluation of vendors is the easy part. Take the time to do the front-end work to position your project properly. Gain a sense for upper management’s openness to your ideas. Learn specifically what they require in order to approve projects and use that insight to determine how—and as importantly when—your team should put forth the full effort of choosing an MES. The alternative imposes delays and dampens the enthusiasm of the very people you will need on board to ensure the project’s success. We wish you and your team a Happy New Year and all the best as you work together to realize the next level of progress and prosperity.
>>Mike LeRoy has more than 30 years of experience in the manufacturing technology industry. His expertise includes manufacturing execution systems (MES) and enterprise resource planning (ERP) systems. He has been in software development and software management as well as sales and sales management. He is currently president of Paper-Less, a MESA Premium Solution Provider.