Global manufacturing trends are driving changes in manufacturing execution systems (MES) and operations management (OM). Traditional MES applications and older IT infrastructures are limiting performance. Now manufacturers are investing more in plant floor IT like OM, an $8 billion market. Today's dynamic environment values information and synchronization across functions like design, engineering, supply chain, production, and customers. OM provides real-time visibility, analytics, connectivity, and orchestration to help manufacturers improve performance metrics like flexibility, quality, and productivity. An effective OM solution has three pillars - infrastructure, connectivity, and functionality - to support business needs across the operations.

1. Global Manufacturing
Trends and Solutions in
MES and Operations Management
Greg Gorbach
Vice President
i id
ARC Advisory Group
ggorbach@arcweb.com

2. Today’s Business Requirements
Drive Change & Determine Real-time Enterprise Needs
Globalization
Rapid Product Innovation
Process Innovation
Collaboration
Synchronization
S h i ti
Lean
Continuous Improvement
Compliance
Risk Management
Performance
Flexibility
y
Pull-based Production
Etc.
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3. Manufacturing Systems Have Not Kept Pace
Older Applications and IT Infrastructure Limit Performance
Manufacturers have
not invested enough
Source: ARC Advisory Group in plant floor IT
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4. Manufacturers Are Now Investing in OM
OM is an $8 Billion Market and Growing
$ g
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5. Today’s Dynamic, Demanding Environment
Places a Premium on Information and Synchronization
Industry Classic MES New Requirements
Semiconductor Complex Routing, Resource Visibility, Analytics/Decision Support, Outsourced
Allocation, Quality
Allocation Quality, WIP Tracking,
Tracking Manufacturing,
Manufacturing Business System Synchronization,
Synchronization
etc. KPIs, Performance, Change Mgmt, Security,
Electronic Manufacturing History etc.
Pharmaceutical Compliance, Quality (Direct and Visibility, Analytics/Decision Support, Outsourced
Enforce Production), Electronic Manufacturing, Business System Synchronization,
Batch Records, Electronic Performance, Change Mgmt, Security, Electronic
Signature, etc.
Signature etc Manufacturing History etc
Continuous Collection of Apps: Optimization, Visibility, Analytics/Decision Support, Outsourced
Process Historian, Advanced Process Manufacturing, Business System Synchronization,
Control, etc. Performance, Change Mgmt, Security, Electronic
Manufacturing History, etc
A&D (Complex CAPP, Quality, Resource Allocation Visibility, Analytics/Decision Support, Outsourced
Discrete) (Operators, Workstations, Tooling, Manufacturing, Supplier Quality Mgmt, Change
etc.) WIP Tracking, Traceability, Management, Security, Electronic Manufacturing
Work Instructions, NCR Resolution, History, etc
etc.
Automotive Quality, Resource Allocation Visibility, Analytics/Decision Support, Orchestrate
Supplier (Operators, Workstations, Tooling, Inventory Replenishment by Operation,
etc.) Work Instructions, Just-in Traceability and Recall Management, Business
Sequence Manufacturing/ Packing/ System Synchronization, Performance, Change
Shipping, Error-proof Packout and Mgmt, Security, Electronic Manufacturing History,
Labeling, etc. etc
Automotive OEM Visual Alarms, Stack Lights, and Visibility, Outsourced Manufacturing, Global
Marquees,
Marquees Line Control & Manufacturing,
Manufacturing Business System Synchronization,
Synchronization
Broadcasting, Supplier Component Performance, Change Mgmt, Security, Electronic
Sequencing, etc. Manufacturing History, Traceability and Genealogy,
etc
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6. Discrete Manufacturing Dynamics
Require a Collaborative Manufacturing Approach
q g pp
Business
Systems
Components &
Supplier
Materials
Network
Product
Support
nterprise
Design, Specifications, Manufacturing
& Mfg Process Finished
Operations
En Goods Customers
Design
Engineering Distribution
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7. Today’s Market Dynamics Demand Speed
OM Enables Real-time Performance Improvement
p
Manufacturing ARC ‘s
Plant
Collaborative
Manufacturing
Internal Management
Business Model
ERP
Manufacturing
Plant External
SRM CRM
nterprise
Customers
Contract Suppliers
Manufacturer PLM
Logistics
OM
En
Automation Distributor
Production
Logistics
Provider
Retailer
Assembly
Plant
Retailer
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8. CMM Applications Map
Let’s Get on the Same Page re: MES and OM
Business
ERP
HR FIN
SCM CRM
Suppliers Customers
Enterprise Infrastructure
CAD Gen 4
Operations Infrastructure
TMS (SOA)
CAM MPM
MI T&A
Sched
WMS
Quality etc. Operations
Gen 3
Lean/CI
MES EAM Management
(Integrated Apps,
HMI Infrastructure, &
Connectivity)
Equipment &
E i
MES Gen 1 Automation
(Standalone, Industry- Production MES Gen 2
(Collection of Applications)
Specific Application) 8
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9. 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
in house
• And for some products, supporting them through their End-
of-Life
Let Business Requirements Drive
Technology Solutions
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10. CMM Model for Production Excellence
Engineering, OM, and Resources Working Together
g g, , g g
Enterprise/Business
Operations
Inbound Customer
Supply Chain Relationship
& Logistics OM IT
Infrastructure
Operations
Operations
MManagement t
Management
OM Functionality
Product Systems
(Apps or Services) Outbound
Design Supply Chain
& Logistics
Manufacturing Production
Automation
Engineering Equipment &
Automation
Systems
Collaborative Production Environment for Highly Flexible Manufacturing
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11. Three Pillars of OM Solutions
Support Business Needs with Operations-Wide Performance
pp p
Infrastructure Connectivity Functionality
• Real-time Plant Support
pp • Enterprise
p • Plan Production
• Technology Platform • Design & Engineering • Execute Production
• Applications Platform • Operations, Controls, & • Track Product Data
• Business Processes Equipment • Inform & Analyze
• Security • Supply Chain & External • Enforce Quality
• Role-based Portals Operations • Move & Store Inventoryy
• etc. • Product Support Ops
d • Manage Assets
• Support Product thru EOL
Operations Management
Source: ARC Advisory Group
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12. Pillar 1: OM IT Infrastructure
Platforms, Processes, Portals, etc.
, , ,
Infrastructure
• Real-time Plant Support
Real time
• Technology Platform
• Applications Platform
• Business Processes
• Security
•R l b
Role-based P t l
d Portals
• etc.
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13. Multiple Platforms Need To Collaborate
Enterprise Technology
g
Platform
Content FIN
ERP EAM
SCM CRM
Enterprise Apps Platform
Custom Integration
Eng. & Design Apps Operations Apps
Platform Platform
Drawings Equipment Data WMS
PDM CPM/Automation
Specs TMS
Models PAM
P&IDs LIMS
Equipment
Technology Technology
Eng & Design Platform Operations Platform
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14. Global Manufacturing Operations
Enterprise Infrastructure
Operations Infrastructure
Design/Engineering Infrastructure
es g / g ee g as uc u e
= Manufacturing Node = Design Node
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15. Pillar 2: Connectivity
Required for Performance
q o o
S
Synchronization
h i i
Enterprise of Manufacturing with other entities
Orchestration
of B i
f Business Processes
P
Design & Product
Engineering Support Response
Operations to dynamic demands
Connects
with: Collaboration
among all required parties
Supply
Operations
Alignment
Chain &
Controls & of goals throughout the Enterprise
External
Equipment
Operations
Visibility
of Manufacturing Information
Source: ARC Advisory Group
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16. Typical Integration Approaches
1. Enterprise Communications Bus
Select Technology Platform Manage Interfaces, etc.
Platform, Interfaces etc
2. Standardize Infrastructure
Tools for All Integration Projects
g j
3. Operations Management Supplier Solution
Align with Operations Management Supplier’s Chosen
Technology
T h l
4. Enterprise Supplier Solution
Align with Enterprise Supplier s Chosen Technology
Supplier’s
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17. Pillar 3: OM Functions/Processes
Use Detailed, Industry-Specific List for System Selection
Processes Examples
•Schedule
Plan Production •Processes
Processes
•Data and Test Needs
•Enforce Processes
Execute Production •Guide Operators
•Collect Data
•WIP Tracking
Track Product Data •Electronic History
•Traceability & Genealogy
•Role-based Views
Inform & Analyze •Drill-down & Analytics
•Event-triggered Notification
•CAPA
Enforce Quality •NCM
•Supplier Quality
•WMS
Move & Store Inventory •Line-side
•RFID
•Maintenance & Repair
Manage Assets •Work Orders
•Synchronize w/Operations
•RMA
Support Product thru EOL
S d h O •MRO
•Recovery & Recycling
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18. OM Functional Requirements
3 of 8 Categories Partially Illustrated Here
g y
Category Function Description
Production Schedule Management Develop and maintain short-term detailed schedule. Coordinate with
Planning input from ERP schedule or Order Management system
Production Sequence Build to Order Support 100 or more operations and multiple production lines
Planning building products according to the OEM sequenced build
requirement. Develop …
Production Define In-Process Data Data Collection Templates shall be configurable and allow users to
Planning Collection specify a list of rules and data items to be collected at a process step:
User defined …
Production Define Create and maintain workflows that define and enforce complex
Planning Workflows/Process p
procedures, standard processes, rework paths, Material Review
, p , p ,
Category Enforcement
Function Board (MRB) procedures …
Description
Production Define
Production Sequence Build to Order Support 100 or more operations and multiple production lines
Create process plans (similar to ERP routings, but much more
Execution Workflows/Process
Planning Execution building products according to the OEM sequenced build
detailed) consisting of: …
Enforcement requirement...
Production Workflow Any sequence of the following actions occur within a defined process
Execution Management/Process step: • Enter Step …
Enforcement
Production Workflow Ensure that all routings, assembly instructions, rework, inspection
Execution Management/Process and test operations, data collection, approval/buyoff signatures,
Enforcement material movements,…
Production Start Processing Provide the ability to induct a lot and have it automatically go to a
Category
Execution Function
Verification Description
preparation process (e.g cleaning or inspection). This should be …
Product DataEnd WIP Tracking
Production Processing At or near work-in-processof y lot, batch, on serial the system in
Track the completion by
p processing or a lot, number or must be
lot
Tracking
Execution Verification able to check that: The correct components and consumed...
combination, across all production stepswere processes and
locations, including …
Product Data Sequence Build to Order Collect and associate process variable information by operation and
Tracking sequence number
Product Data Serialized Component Support OEM requirement for complete part traceability and
Tracking Tracking, Genealogy, and genealogy, all the way from material suppliers through each
Traceability manufacturing operation in …
f t i ti i
Product Data Genealogy Trace from assembly lot numbers or serial numbers to all of the
Tracking component and sub-assembly lots that were used to construct those
assemblies, and…
Product Data Bulk Issue Transactions When MRP bulk-issues material to the floor and does not track
Tracking 25
consumption, the Operations Management system should not …
© ARC Advisory Group

19. OM Functional Requirements
Must Include Integration & Performance Requirements
g q
Category Function Description
Integration - New Product Define processes for prototype lots and collect detailed data for
Product Introduction analysis. Support multiple prototyping iterations. Synchronize …
Lifecycle
Integration - Post-production Provide a mechanism to feed post-production quality/defect data back
Product Category Product Function
Support Description
into the product development cycle (design engineering and …
LifecycleIntegration - Realtime Data - Integrate to plant equipment, systems, and devices as necessary to
Operations, Machine Integration, gather or share data and information required to coordinate the …
Controls,
C t l & Barcode, RF, M
B d RF Manual l
Equipment
Integration - Interface to Plant Provide connectors/adapters to enable the collection of data in near-
Operations, Applications and real-time from plant applications and systems such as HMI, …
Category
Controls, & SystemsFunction Description
EquipmentIntegration - Integration to Receive order status and quality information from outsource
External Outsourced manufacturing operations and independent supplier operations to
Operations and Manufacturing ensure …
Supply Chain Operations or Supplier
Manufacturing
Operations
Integration - Integration to Customer Provide real-time production status information to customer systems.
ExternalCategory Function
Quality, Supplier Description
Provide component/assembly identification information to customers
Integration - Real-time Visibility
Operations and Management, ERP, and … Provide portlets to support real-time graphical, tabular, and drill-down
Enterprise
Supply Chain Operations Systems display of manufacturing data in dashboards or portals such as …
Category
Integration - Function
Scenario Integration Description
Provide a means to compose, populate, generate, and exchange
System
Enterprise System Start-up, Assess and evaluate the system in detail. Document evidence that the
messages with ERP and other business systems, based on P2B
Performance Validation, & Change
standards such operates and behaves in accordance with specifications …
system as …
Mgmt
System System Design and Design and create routings, workflows, etc. based on digital virtual
Performance Configuration: Virtual manufacturing model. Automatically generate OM system …
y
OM System
Configuration
(FUTURE)
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20. Thank You!
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