Presentation on MES-Trends and Opportunities

MES/CPM Trends and OpportunitiesPlant Software Plays A Key Role in Manufacturing Innovation

MES/CPM Trends and OpportunitiesPlant Software Plays A Key Role in Manufacturing Innovation

Greg GorbachVice President

ARC Advisory [email protected]

ARC Forum, Pune, August 2011

2© ARC Advisory Group

TopicsTopics

Trends MES, CPM, and MOM New MES Requirements Manufacturing Operations Management The Players Purchase Criteria


Macro Trends Driving Today’s Industrial EcosystemMacro Trends Driving Today’s Industrial Ecosystem


Today’s Business EnvironmentMakes Innovation and Responsiveness A NecessityToday’s Business EnvironmentMakes Innovation and Responsiveness A Necessity

Business Environment•Power of Emerging Economies

•Global Competition

•Rise of the Millennials

•Barriers to IT Access Falling

•Dwindling Resources

• Increasing Energy Cost

•Water Scarcity

•Recycling, Disposal

•Climate Change

•Social Responsibility

• Increasing Regulations

• IT Security

• etc.

Differentiators•Quality

•Branding

•Product Innovation

•Product Design

• Traceability, Product Info

•Process/Service Innovation

•Response Time

• Technology

• Localization

•Green

•Value Networks

•Anti-Counterfeiting

•Price

• etc.

1.

2.

3.

4.


Impact•Competition for tech savvy workers

•Need to manage complex network of suppliers, partners, customers

•New competitors entering the market

•More consumer power

•Online ratings

•Collaborative buying

• Increasing cybercrime

•More customization

•New business processes will emerge

• etc.

IT Trends•Cloud computing

•Mobility

• Internet of things

•Continuous Services/Connected Devices

•Cybersecurity threats

•Virtualization

• In-memory computing

•Openness

• Ease of use

•Reduced cost

•Social networks

• Ease of communication

•Accessible, powerful analytics

• etc.

3. Accessible ITWill drive and enable manufacturing ecosystem changes3. Accessible ITWill drive and enable manufacturing ecosystem changes


2011: A New Perspective Next Decade Will be About Empowering Value Networks2011: A New Perspective Next Decade Will be About Empowering Value Networks

+

= Transformation of Manufacturing

Plant-Centric, Integrated

Value Network Collaboration

Shifting Economic

Power+Changing

Demographics

From: To:

+ Resource & Environment

Drivers

Powerful New IT

Capabilities


Collaborative Value Network (CVN)Focuses on Activities Throughout the Value NetworkCollaborative Value Network (CVN)Focuses on Activities Throughout the Value Network

Make

Design

Delive

r

Sta

ge

Source

Production Network

Logistics

DistributionPurchasing

Service

Sales, Retail Customers

Supplier Network

Engineering

Construction

Portfolio Plan

Prod’n AssetsPlant & Equipment

Product & Plant

Support

Sel

l

Ret

ire

In order to compete effectively, better IT

tools are being utilized throughout the value network to speed and

optimize innovation, production, and

delivery of goods and services

Today manufacturers operate within one or

more networks of companies that work together to provide goods and services to end consumers


New MES RequirementsNew MES Requirements


Industry Classic MES New RequirementsSemiconductor Complex Routing, Resource

Allocation, Quality, WIP Tracking, etc.

Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, KPIs, Performance, Change Mgmt, Security, Electronic Manufacturing History etc.

Pharmaceutical Compliance, Quality (Direct and Enforce Production), Electronic Batch Records, Electronic Signature, etc.

Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History etc

Continuous Process

Collection of Apps: Optimization, Historian, Advanced Process Control, etc.

Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History, etc

A&D (Complex Discrete)

CAPP, Quality, Resource Allocation (Operators, Workstations, Tooling, etc.) WIP Tracking, Traceability, Work Instructions, NCR Resolution, etc.

Visibility, Analytics/Decision Support, Outsourced Manufacturing, Supplier Quality Mgmt, Change Management, Security, Electronic Manufacturing History, etc

Automotive Supplier

Quality, Resource Allocation (Operators, Workstations, Tooling, etc.) Work Instructions, Just-in Sequence Manufacturing/ Packing/ Shipping, Error-proof Packout and Labeling, etc.

Visibility, Analytics/Decision Support, Orchestrate Inventory Replenishment by Operation, Traceability and Recall Management, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History, etc

Automotive OEM Visual Alarms, Stack Lights, and Marquees, Line Control & Broadcasting, Supplier Component Sequencing, etc.

Visibility, Outsourced Manufacturing, Global Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History, Traceability and Genealogy, etc

Today’s Dynamic, Demanding Environment Places a Premium on Information and Synchronization


Contemporary Plant Software TopicsManufacturers need a path to tomorrow’s solutionsContemporary Plant Software TopicsManufacturers need a path to tomorrow’s solutions

Operations Platform, Integration Visibility, Analytics, Intelligence KPIs and Metrics Workflow, Business Process Mgt Security Mobility Innovation PLM Integration Quality Management Materials Movement Integration Traceability Collaboration/Social Computing SaaS, Cloud Computing


MES, CPM, and MOMMES, CPM, and MOM


MOMincludes EAM, LEAN,

QMS, RPO, LIMS, EH&S, HMI*, Software

Platform, etc.

Manufacturers’ Needs Extend Well Beyond Traditional MES ApplicationsManufacturers’ Needs Extend Well Beyond Traditional MES Applications

Enterprise & Business Network

Line/Plant

Incre

asin

g F

un

cti

on

ality

Performance

CPMincludes EMI, SPC, Historian, CAPA, Recipe Mgt, etc.

MES


Manufacturing Operations ManagementManufacturing Operations Management


Operations ManagementOperations Management

Operations Management

Production Management

Inventory Management

Business Integration

Maintenance Management

Regulatory Compliance

Energy Management


Operations Management Definition:Operations Management Definition:

Operations Management is the management of the people, business processes, technology and capital assets involved in: • Procuring and receiving raw materials and components

- Especially as it relates to obtaining, storing, and moving necessary materials/components in a timely manner and of suitable quality to support efficient production

• Implementing product designs, specifications, formulations, or recipes by manufacturing products- Including manufacturing process planning and validation

• Distributing these products to customers- Especially as it relates to sequencing and in-house logistics

• And for some products, supporting them through their End-of-Life


What’s Needed?A Holistic IT Approach to Managing OperationsWhat’s Needed?A Holistic IT Approach to Managing Operations

Modern Platform

Broad Connectivity &

Synchronization

Comprehensive Application Suite

Operations Management =

Source: ARC Advisory Group


Components of a Comprehensive Plant Floor SolutionComponents of a Comprehensive Plant Floor Solution

Plan Operate InformProcesses

Integration Supply ChainEngineering

Business

Controls & Equipment

Platform

• Real-time Plant Capable• Technology Platform• Applications Platform• Business Process Mgt• Security• Role-based Portals• Unified Data• Integration Engine• Change Management• etc.


Manage Production ProcessesUse Detailed, Industry-Specific List for System SelectionManage Production ProcessesUse Detailed, Industry-Specific List for System Selection

•Schedule•Processes•Data and Test Needs

Plan Production•Enforce Processes•Guide Operators•Collect Data

Execute Production•WIP Tracking•Electronic History•Traceability & Genealogy

Track Product Data•Role-based Views•Drill-down & Analytics•Event-triggered Notification

Inform & Analyze•CAPA•NCM•Supplier Quality

Enforce Quality•WMS•Line-side•RFID

Move & Store Inventory

•Maintenance & Repair•Work Orders•Synchronize w/Operations

Manage Assets•RMA•MRO•Recovery & Recycling

Support Product thru EOL

Processes Examples


Operations Management SystemsGlobal PerspectiveOperations Management SystemsGlobal Perspective

Enterprise IT S/W Infrastructure

• Different Automation Systems• Different ‘MES’ systems• Different Automation Systems• Different Software Systems

Operations IT S/W Infrastructure

Global Business Needs:• Inventory visibility • Compare plants• Balance production• Standardization• Best Practices• Carbon compliance• S/W maintenance & rollout• etc


Design/Engineering Infrastructure

Global Manufacturing OperationsGlobal Manufacturing Operations

Enterprise InfrastructureOperations Infrastructure

= Manufacturing Node = Design Node


Custom Integration

Operations

PAMLIMS

CPM/AutomationData

TMSWMS

Equipment

Operations Apps Platform

PDM

P&IDsModels

EquipmentSpecs

Drawings

Eng. & Design Apps Platform

Enterprise Apps Platform

CRMSCM

FINERP EAMConten

t

Technology PlatformEng & Design

Enterprise

Technology Platform

Technology Platform

A 3-Platform ArchitectureA 3-Platform Architecture


LEAP Manufacturing Technology and Business Practices for World-Class ManufacturingLEAP Manufacturing Technology and Business Practices for World-Class Manufacturing

MES/MOM is Essential For Each Component: L E A P

Leading-edge• Innovative• Technology-forward

• Mobile, Social, Cloud, Model-based, Virtual, PLM, MES, etc.

• Collaborative, Integrated

• Performance driven

Efficient• Profitable• High Quality• Compliant• Safe & Effective• Local/Regional

Agile• Responsive

• Collaborative, Networked, Pull-based, Interactive

• Flexible, adaptive, changeable

Progressive• Sustainable

• Energy, Carbon, Social, Water, Waste, Closed Loop

• Responsible

LEAPMfg


LEAP ManufacturingLeverages Innovative IT and Business StrategiesLEAP ManufacturingLeverages Innovative IT and Business Strategies

MES/MOM is a Key Vehicle to Take IT Innovations Into the Plant

SC ERP

PLM MOM

Enterprise Platforms


Business Strategies

Cloud

Mobile

Social

IT Innovation

Analytics

Virtualization


The PlayersThe Players


MES/CPM/MOM Supplier Category MatrixMES/CPM/MOM Supplier Category Matrix

Category Objectives Themes Products Status

MES Supplierse.g. Camstar, iBASET, Apriso, VIA-IT, etc.

Grow in Core Industries & New Energy Tech

Performance, Compliance, Quality, Dist’d Mfg, Ops platform

Enterprise Platform, Solumina, FlexNet, MAN-IT, etc.

Many continue to grow

Automation Supplierse.g. Rockwell, GEIP, Siemens, Aspentech, IOM, Schneider, etc.

Own the Shop Floor; Process & Discrete; Targeted expansion

Control System Integration, Dist’d Mfg, Interoperability,Sustainability

FactoryTalk, Proficy, SIMATIC IT, WW MES, etc.

Growth thru acquisition slowing

ERP Supplierse.g. SAP, Oracle, CDC, Plex Systems

Own the Shop Floor;Own the Infrastructure

Collaboration, Performance, Agility, Lean, Dist’d Mfg

SAP MII, SAP ME, Oracle Shop Floor, Fusion; Plex Online (SaaS)

Strong performance

Infrastructure Supplierse.g. Microsoft, IBM , Cisco, (with SAP, Oracle)

Own the Infrastructure

Collaboration, Performance, Agility, Dist’d Mfg

BizTalk; WebSphere; NetWeaver; Fusion

Microsoft succeeding thru partnering

PLM Supplierse.g. Siemens PLM, Dassault, Oracle, etc.

Own the Shop Floor;End 2 End PLM

Innovation, Supplier Collaboration

Teamcenter, Tecnomatix, SIMATIC IT; Intercim products

Growing integrated solutions

SC Supplierse.g. HighJump, Red Prairie

Penetrate Shop Floor

Inventory Management

Manufacturing Advantage,Manufacturing Execution

SC sector is stressed

Technology/Toolkit Supplierse.g. Savigent, Ninety-Five

Penetrate Shop Floor; OEM their technology

BPM, ISA-95, etc. Catalyst, Easy95 Tiny


CPM-D Market Leaders for 2010CPM-D Market Leaders for 2010

IBM SiView

MPDV Mikrolab

IBS AG

Oracle

Apriso

Invensys

Rockwell Automation

Siemens

Camstar Systems

SAP

Applied Materials

0% 4% 8% 12%

2010 = 1073.7 Million US Dollars


CPM-D Revenue GrowthCPM-D Revenue Growth

CAGR = 11.7%


Purchase CriteriaPurchase Criteria


How Do I Justify Plant Software?Plant IT is Necessary and Cost-EffectiveHow Do I Justify Plant Software?Plant IT is Necessary and Cost-Effective

Cheap Energy Cheap Water Cheap Waste ‘Free’ Emissions Predictable Raw

Materials Available Talent Pool

Expensive Controls & Automation Technology

Expensive Software and IT

YESTERDAY:

Energy Cost Swings Water Cost Rising Expensive Waste Expensive Emissions Unpredictable Raw

Materials Limited Talent Pool

Cheap Controls & Automation Technology

Cheap Software and ITTODAY:

Manufacturing Software is an Essential Tool for Agility,

Compliance, and Cost Control

Cost


CPM Purchase CriteriaCPM Purchase Criteria

Fit for Purpose• Industry requirements, manufacturing model,

specific functionality, performance, scability• Corporate strategy – high volume? Rapid

Response? Innovative products?• Legacy systems• Technology strategy – architecture, operation

system, policies or standards, multi-plant, etc.


CPM Purchase Criteria (continued)CPM Purchase Criteria (continued)

Supplier Qualifications• Maturity• Capabilities

• Implementation, training, maintenance, etc.• Size• Industry experience, references• Local support



Implementation and Support• Up to 3x to 5x software cost• Usually with a SI partner

• Best practices, training, etc. by supplier• Methodology, strong deployment team, track

record, global reach• Support for issues, bugs, feature requests, etc.



Pricing• Generally, one-time fees associated with software

licenses plus recurring fees for maintenance and support

• Per user, per site, per server, per enterprise or some combination.

• SaaS • monthly fee, not especially low, but predictable• Per-user, with a mininimum number of users• Additional fees for extra storage or bandwidth


Final ThoughtsFinal Thoughts


LEAP Manufacturing Technology and Business Practices for World-Class ManufacturingLEAP Manufacturing Technology and Business Practices for World-Class Manufacturing

Leading-edge• Innovative• Technology-forward

• Mobile, Social, Cloud, Model-based, Virtual, PLM, MES, etc.

• Collaborative, Integrated

• Performance driven

Efficient• Profitable• High Quality• Compliant• Safe & Effective• Local/Regional

Agile• Responsive

• Collaborative, Networked, Pull-based, Interactive

• Flexible, adaptive, changeable

Progressive• Sustainable

• Energy, Carbon, Social, Water, Waste, Closed Loop

• Responsible

MES/MOM is Essential For Each Component: L E A P

LEAPMfg


LEAP ManufacturingLeverages Innovative IT and Business StrategiesLEAP ManufacturingLeverages Innovative IT and Business Strategies

SC ERP

PLM MOM

Enterprise Platforms


Business Strategies

Cloud

Mobile

Social

IT Innovation

MES/MOM is a Key Vehicle to Take IT Innovations Into the Plant

Analytics

Virtualization


• Operating Excellence

• Enterprise Visibility & Control

• Quality, Flexibility• Efficiency & Cost Control• Asset Performance• Energy, Resource, Mgt• Risk Mgt & Safety

Execution

• DynamicValue Creation

• Collaboration• Business Innovation• Product Innovation• Mfg Process Innovation• Marketing

Innovation

• Governance & Compliance

• REACH• Emissions Mgt• Carbon Tracking• 21CFR part 11• MTSA• etc

Compliance

Drive Manufacturing Performance Three Business Imperatives for a Changing MarketplaceDrive Manufacturing Performance Three Business Imperatives for a Changing Marketplace

Plant Software is a Critical Tool for Achieving Enterprise Performance

Be Effective Be Proactive Be Responsible

Optimize Performance

Extend & Transform Current Business

Support Corporate Citizenship


Thank YouThank You

For more information, contact the author at [email protected] or visit our web pages at

www.arcweb.com

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Presentation on MES-Trends and Opportunities