The arrival of the MES is not a new prediction; a boom has been proclaimed several times in the past, only to fizzle as manufacturers spent their money on financial and other type business systems.
But as we emerge from the recession, the planets may finally be aligned for MES to break out.
“We've seen a definite uptake in the amount of interest in MES, based on client inquiries,” said Bill Swanton, an analyst with Boston-based AMR Research. “Two years ago, things were skewed toward collaboration and e-Business. Now there is interest in nuts-and-bolts manufacturing.”
Put simply, MES systems provide a middle layer between the process control systems and the business enterprise and supply chain management (SCM) applications, allowing visibility, control, and access to all manufacturing resources—including equipment, labour, orders, and inventory.
“We all overestimated the growth (a few years ago)," says Jonathan Kall, president of Interwave Technology, a systems integration firm that concentrates solely on MES implementations.
"We all underestimated the impact of the Y2K phenomenon. Companies had to replace their business systems and invested heavily to do that, driving the growth of enterprise resources planning (ERP). Then they had this huge, expensive infrastructure in place, so it made sense to squeeze as much out of it as possible, and extend its reach to customers and suppliers.
“Hence the rise of e-Business, supply chain management, and customer relationship management.
“Now people are tighter with suppliers and customers, but manufacturing still is a black hole in the middle,” Kall concludes. “The orders come in faster than ever before, the components are there on time, but it still takes the same amount of time to turn out a widget as it did five years ago.”
Fixing a hole
Kall also believes this opens the door for MES as the next natural step in the evolution of the manufacturing industry.
Says AMR's Swanton, “People are looking at how they can squeeze costs out of their processes using information technology, and they are more understanding of what their ERP and supply chain systems can really do. Now they're looking to fill in the holes.”
From the inquiries he's had, Swanton sees demand for three primary sets of MES functionality: visibility, genealogy, and quality control processes. Note that these are all product-related, as opposed to process-related, attributes.
By its nature, MES provides visibility into what is happening on the plant floor, answering questions such as order status and available plant capacity. It also can record the materials being used, lending historical information that has been of particular interest in the automotive industry, where manufacturers are correlating warranty claims to specific materials and machines.
According to Ian Stone, executive vice president of CIMNET, an MES solutions vendor, the primary factor driving the rise of MES is the increasing pressure manufacturers are under to adopt lean, make-to-order, and collaborative manufacturing processes.
“These strategies require a lot more flexibility and visibility into production than is traditionally available through home-grown, custom-made, or paper-based systems,” said Stone. In addition, ERP and SCM systems do not have the data fields required for product-related attributes. MES provides that data.
“Manufacturers are realising that there is something missing in their systems,” Stone continues. “People are getting back to grass roots. At the end of the day, a factory has a simple responsibility: it has to make high-quality products on-time. MES helps make that happen (while ERP and SCP don't).”
Founded in 1985, CIMNET experienced 200-percent growth last year. Along with Datasweep, Camstar and Mountain Systems, it is one of only a handful of independent MES vendors remaining. Others have been swallowed up by the large automation companies, which are pre-integrating them with their automation systems, and using them to grow their footprints in plants.
For example, Honeywell acquired POMS, Rockwell picked up Propak, while Siemens and ABB also made acquisitions. Invensys combined Foxboro and Wonderware to its Baan ERP investment, while Oracle and J.D. Edwards have released MES modules.
Struggle
Swanton expects these developments to lead to a rough ride for most of the independents. “It will no longer be a US$20-million company trying to peddle it. It will be a larger company and it will be part of a larger offering.”
While Swanton, Kall, and Stone all agree these acquisitions are another indicator of the recognized need for MES solutions, how exactly the market will play out remains unclear.
Says Swanton, “The automation vendors have struggled in rationalizing these investments, and making the new business model work. GenRad acquired ICC (and has since been acquired by Teradyne), but couldn't get its sales force to sell the solution, and POMS was never very well integrated into Honeywell because of the distraction caused by the parent company's merger with GE.
“They have to use MES as a strategic wedge to pull through their existing offerings. They need to package this stuff as a business improvement project, rather than as a pure software sale.”
Swanton does have some words of encouragement for the independents. “There is still a place for the independents, but they will need to find somebody big to work with, either through a close partnership (as Datasweep is doing with GE) or acquisition.
“They could be squeezed but, given the track record of the big automation companies, there may always be a place for the nimble independent.”
Alex Anderson