MES/CPM Trends and Opportunities

Plant Software Plays A Key Role in Manufacturing Innovation

ARC Forum, Pune, August 2011

Greg Gorbach
Vice President ARC Advisory Group ggorbach@arcweb.com

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

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Macro Trends Driving Todays Industrial Ecosystem

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Todays Business Environment

Business Environment
1.
Power of Emerging Economies Global Competition Barriers to IT Access Falling Dwindling Resources Increasing Energy Cost 4. Recycling, Disposal Water Scarcity

Makes Innovation and Responsiveness A Necessity

Differentiators
Quality Branding Product Innovation Product Design Traceability, Product Info Process/Service Innovation Response Time Technology

2. Rise of the Millennials 3.

Climate Change
Social Responsibility Increasing Regulations IT Security etc.

Localization
Green Value Networks Anti-Counterfeiting Price

etc.
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3. Accessible IT
IT Trends
Cloud computing Mobility Internet of things

Will drive and enable manufacturing ecosystem changes

Impact
Competition for tech savvy workers Need to manage complex network of suppliers, partners, customers

Continuous Services/Connected Devices Cybersecurity threats Virtualization In-memory computing Openness

New competitors entering the market

More consumer power Online ratings Collaborative buying Increasing cybercrime More customization New business processes will emerge etc.

Ease of use
Reduced cost Social networks Ease of communication Accessible, powerful analytics etc.

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2011: A New Perspective

Next Decade Will be About Empowering Value Networks

Shifting Economic Power

Changing Demographics

Powerful New IT Capabilities

Resource & Environment Drivers

= Transformation of Manufacturing
From: To:

Plant-Centric, Integrated

Value Network Collaboration

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Collaborative Value Network (CVN)

Today manufacturers operate within one or more networks of companies that work together to provide goods and services to end consumers
Construction
Plant & Equipment

Focuses on Activities Throughout the Value Network

In order to compete effectively, better IT tools are being utilized throughout the value network to speed and optimize innovation, Logistics production, and delivery of goods Customers and services
Service

Sales, Retail

Design
Supplier Network
Product & Plant

Engineering Distribution Purchasing

Production Network

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New MES Requirements

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Todays Dynamic, Demanding Environment

Places a Premium on Information and Synchronization
Industry
Semiconductor

Classic MES
Complex Routing, Resource Allocation, Quality, WIP Tracking, etc. Compliance, Quality (Direct and Enforce Production), Electronic Batch Records, Electronic Signature, etc. Collection of Apps: Optimization, Historian, Advanced Process Control, etc. CAPP, Quality, Resource Allocation (Operators, Workstations, Tooling, etc.) WIP Tracking, Traceability, Work Instructions, NCR Resolution, etc. Quality, Resource Allocation (Operators, Workstations, Tooling, etc.) Work Instructions, Just-in Sequence Manufacturing/ Packing/ Shipping, Error-proof Packout and Labeling, etc. Visual Alarms, Stack Lights, and Marquees, Line Control & Broadcasting, Supplier Component Sequencing, etc.

New Requirements
Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, KPIs, Performance, Change Mgmt, Security, Electronic Manufacturing History etc. Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History etc Visibility, Analytics/Decision Support, Outsourced Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History, etc Visibility, Analytics/Decision Support, Outsourced Manufacturing, Supplier Quality Mgmt, Change Management, Security, Electronic Manufacturing History, 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 Visibility, Outsourced Manufacturing, Global Manufacturing, Business System Synchronization, Performance, Change Mgmt, Security, Electronic Manufacturing History, Traceability and Genealogy, etc
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Pharmaceutical

Continuous Process

A&D (Complex Discrete)

Automotive Supplier

Automotive OEM

Contemporary Plant Software Topics

Operations Platform, Integration Visibility, Analytics, Intelligence

Manufacturers need a path to tomorrows solutions

KPIs and Metrics

Workflow, Business Process Mgt Security Mobility

Innovation
PLM Integration Quality Management Materials Movement Integration Traceability Collaboration/Social Computing SaaS, Cloud Computing

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MES, CPM, and MOM

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Manufacturers Needs Extend Well Beyond Traditional MES Applications

Increasing Functionality

MOM
includes EAM, LEAN, QMS, RPO, LIMS, EH&S, HMI*, Software Platform, etc.

CPM
includes EMI, SPC, Historian, CAPA, Recipe Mgt, etc.

MES
Performance
Line/Plant Enterprise & Business Network
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Manufacturing Operations Management

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Operations Management

Operations Management
Production Management Business Integration Regulatory Compliance

Inventory Management

Maintenance Management

Energy Management

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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 Endof-Life

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Whats Needed?

A Holistic IT Approach to Managing Operations

Operations Management = Modern Platform

Broad Connectivity & Synchronization

Comprehensive Application Suite

Source: ARC Advisory Group
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Components of a Comprehensive Plant Floor Solution

Business

Integration

Engineering

Supply Chain

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

Platform

Processes

Plan

Operate

Inform

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Manage Production Processes

Processes Examples

Use Detailed, Industry-Specific List for System Selection

Plan Production

Schedule Processes Data and Test Needs

Execute Production
Track Product Data Inform & Analyze Enforce Quality Move & Store Inventory Manage Assets Support Product thru EOL

Enforce Processes Guide Operators Collect Data

WIP Tracking Electronic History Traceability & Genealogy Role-based Views Drill-down & Analytics Event-triggered Notification CAPA NCM Supplier Quality WMS Line-side RFID Maintenance & Repair Work Orders Synchronize w/Operations RMA MRO Recovery & Recycling

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Operations Management Systems

Global Perspective

Enterprise IT S/W Infrastructure

Operations IT S/W Infrastructure

Different Automation Systems Different Software MES systems Systems

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

Enterprise Infrastructure Operations Infrastructure Design/Engineering Infrastructure

= Manufacturing Node

= Design Node

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A 3-Platform Architecture
Enterprise
Content SCM ERP FIN EAM CRM

Technology Platform

Enterprise Apps Platform

Custom Integration
Eng. & Design Apps Platform
PDM Models P&IDs Equipment Drawings Equipment Specs Data PAM

Operations Apps Platform

CPM/Automation WMS

TMS LIMS

Eng & Design

Technology Platform

Operations

Technology Platform

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LEAP Manufacturing
Leading-edge
Innovative Technology-forward

Technology and Business Practices for World-Class Manufacturing

Efficient
Profitable High Quality Compliant Safe & Effective Local/Regional
LEAP Mfg

Mobile, Social, Cloud, Modelbased, Virtual, PLM, MES, etc.

Collaborative, Integrated

Performance driven

Agile
Responsive
Collaborative, Networked, Pull-based, Interactive

Progressive
Sustainable
Energy, Carbon, Social, Water, Waste, Closed Loop

Flexible, adaptive, changeable

Responsible

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

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LEAP Manufacturing
Business Strategies

Leverages Innovative IT and Business Strategies Enterprise Platforms IT Innovation

Value Network Collaboration

Cloud

SC

ERP

Analytics

PLM

MOM

Mobile Virtualization

Social

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

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The Players

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MES/CPM/MOM Supplier Category Matrix

Category MES Suppliers Objectives Grow in Core Industries & New Energy Tech Own the Shop Floor; Process & Discrete; Targeted expansion Themes Performance, Compliance, Quality, Distd Mfg, Ops platform Control System Integration, Distd Mfg, Interoperability, Sustainability Products Enterprise Platform, Solumina, FlexNet, MAN-IT, etc. FactoryTalk, Proficy, SIMATIC IT, WW MES, etc. Status Many continue to grow

e.g. Camstar, iBASET, Apriso, VIA-IT, etc.

Automation Suppliers e.g. Rockwell, GEIP, Siemens, Aspentech, IOM, Schneider, etc.

Growth thru acquisition slowing

ERP Suppliers
e.g. SAP, Oracle, CDC, Plex Systems Infrastructure Suppliers e.g. Microsoft, IBM , Cisco, (with SAP, Oracle) PLM Suppliers e.g. Siemens PLM, Dassault, Oracle, etc. SC Suppliers e.g. HighJump, Red Prairie

Own the Shop Floor;

Own the Infrastructure Own the Infrastructure

Collaboration, Performance, Agility, Lean, Distd Mfg

Collaboration, Performance, Agility, Distd Mfg

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

Strong performance

Microsoft succeeding thru partnering

Own the Shop Floor; End 2 End PLM Penetrate Shop Floor

Innovation, Supplier Collaboration Inventory Management

Teamcenter, Tecnomatix, SIMATIC IT; Intercim products Manufacturing Advantage, Manufacturing Execution

Growing integrated solutions SC sector is stressed

Technology/Toolkit Suppliers
e.g. Savigent, NinetyFive

Penetrate Shop Floor; OEM their technology

BPM, ISA-95, etc.

Catalyst, Easy95

Tiny

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CPM-D Market Leaders for 2010

2010 = 1073.7 Million US Dollars

Applied Materials

SAP
Camstar Systems Siemens

Rockwell Automation
Invensys Apriso

Oracle
IBS AG MPDV Mikrolab

IBM SiView
0% 4% 8% 12%

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CPM-D Revenue Growth

CAGR = 11.7%

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Purchase Criteria

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How Do I Justify Plant Software?

Plant IT is Necessary and Cost-Effective Cost

YESTERDAY:
Cheap Energy TODAY: Cheap Water Cheap Waste Energy Cost Swings Free Emissions Water Cost Rising Predictable Raw Materials Expensive Waste Available Talent Pool Expensive Emissions Unpredictable Raw Materials Limited Talent Pool

Cheap Controls & Automation Technology Cheap Software and IT Expensive Controls & Automation Technology Expensive Software and IT

Manufacturing Software is an Essential Tool for Agility, Compliance, and Cost Control
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CPM 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.

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CPM Purchase Criteria (continued)

Supplier Qualifications

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

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CPM Purchase Criteria (continued)

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.

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CPM Purchase Criteria (continued)

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

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Final Thoughts

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LEAP Manufacturing
Leading-edge
Innovative Technology-forward

Technology and Business Practices for World-Class Manufacturing

Efficient
Profitable High Quality Compliant Safe & Effective Local/Regional
LEAP Mfg

Mobile, Social, Cloud, Modelbased, Virtual, PLM, MES, etc.

Collaborative, Integrated

Performance driven

Agile
Responsive
Collaborative, Networked, Pull-based, Interactive

Progressive
Sustainable
Energy, Carbon, Social, Water, Waste, Closed Loop

Flexible, adaptive, changeable

Responsible

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

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LEAP Manufacturing
Business Strategies

Leverages Innovative IT and Business Strategies Enterprise Platforms IT Innovation

Value Network Collaboration

Cloud

SC

ERP

Analytics

PLM

MOM

Mobile Virtualization

Social

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

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Drive Manufacturing Performance

Three Business Imperatives for a Changing Marketplace

Be Effective
Operating Excellence
Enterprise Visibility & Control Quality, Flexibility Efficiency & Cost Control Asset Performance Energy, Resource, Mgt Risk Mgt & Safety Optimize Performance

Be Proactive
Dynamic Value Creation
Collaboration Business Innovation Product Innovation Mfg Process Innovation Marketing Extend & Transform Current Business

Be Responsible
Governance & Compliance
REACH Emissions Mgt Carbon Tracking 21CFR part 11 MTSA etc Support Corporate Citizenship

Execution

Innovation

Compliance

Plant Software is a Critical Tool for Achieving Enterprise Performance

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Thank You
For more information, contact the author at ggorbach@arcweb.com or visit our web pages at www.arcweb.com

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