How an MES can help companies take advantage of manufacturing changes

Manufacturing execution system (MES) insights

• Manufacturing execution systems (MES) are designed capture data to provide a complete view of all steps of a production process.
• Manufacturers can use an MES to give them a better view of their operations and reduce inefficiencies and better utilize their assets.
• This is a good time to take advantage of an MES because manufacturing as a whole is going through major changes in the last several years due to technology advances, particularly in automation.

Manufacturing in the U.S. lost ground to lower-cost overseas manufacturing in the last few decades, particularly in China. However, that terrain is shifting, due to several recent developments:

1. The trade tariffs imposed in 2018 increased the cost of components made overseas – in some cases up to 50%.

2. The COVID-19 pandemic revealed the lack of resilience in global supply chains in the face of shortages of labor and materials as well as massive overseas shipping

3. Increasing standards of living in China have buoyed the service sector, which has grown to more than 54% of that nation’s gross domestic product (GDP) as manufacturing continues to contract.

On top of these factors, the U.S. government has taken concrete steps to revitalize U.S. manufacturing, reinforce domestic supply chains and promote the industries of the future, sparking a historic recovery in manufacturing. Since 2021, the U.S. has added 642,000 manufacturing jobs, and the construction of new manufacturing facilities has jumped 116% over the last year.

This growth will gain even more momentum with the Inflation Reduction Act, which is backed by $374 billion in climate and energy spending. This will allow carmakers to convert their plants and prepare their supply chains to meet these new rules. Tax credit incentives, related to electric vehicles and estimated to be $3.5 billion, is also part of the overall bill.

While all these elements contribute to an improved outlook for manufacturers, it is not going to be a walk in the park. Many businesses face a labor shortage, which takes time to build a specialized workforce. That’s why many companies are now focused on leveraging technology to help factory workers do their jobs better by enhancing not just productivity, but also consistency, quality, and documentation – especially given the growth of dual sourcing of components from domestic and overseas factories. Providing the right tools will result in a better experience for operators, ensuring an integrated environment and increased retention, productivity and overall job satisfaction.

Small and midsize factories benefit from enterprise resource planning (ERP) and manufacturing execution systems (MES). Courtesy: Pico MES

Benefits of a manufacturing execution system (MES)

Large-scale manufacturers turn to the big consulting firms – and pay them handsomely – to develop customized technology solutions that will help them accomplish these goals. However, small and midsize businesses (SMBs) make up the vast majority of the supply chain, and they typically lack the tools and technologies – not to mention information technology (IT) budgets – large enterprises take for granted.

That’s where manufacturing execution systems (MES) come in. The best MES capture data to provide a complete view of all steps of a production process: raw material batch info, how each production line performs over time, location of bottlenecks and traceability, which lets operators determine where each component was built, determine the root cause of any issues that arise and switch off one of the dual suppliers until the issue is resolved.

Another underappreciated element of MES is it provides a user interface the entire manufacturing operations team can easily use. This makes for shorter learning curves and fewer workflow bottlenecks. In addition, the ideal system will capture and provide real- time data from operators, tools, machines and procurement systems in one location. This provides insights necessary for increasing the pace of improvement while integrating with existing factory equipment and linking tools to established procedures.

This also would allow other team members to use the software, spreading out the workload and ownership, as well as facilitate involvement across many members, minimizing the burden on the small number of engineers.

Factory operators won’t be the only employees using the system; it also should connect other teams to make everyone’s work easier and more efficient. An MES should be affordable and scaled for SMBs. They can leverage the MES as part of a simple tool set by utilizing specific programs and focusing them on their level of operations.

SMBs often need only two systems: Enterprise resource planning (ERP), which resides with accounting and procurement, and covers sales orders, POs, issuing work orders, and tracking inventory of components and finished goods; and an MES, which encompasses worker guidance, tool, and machine connections.

A good MES will have a straightforward user interface, produce usable data, provide strong connection to all departments and is easily accessible. Courtesy: Pico MES

To make sure the MES is the right solution, a factory should test the system on a small scale, to learn, improve and repeat, help ensure the business is on the path to continuous improvement. By leveraging the right solution, SMBs not only become more efficient, extracting 20 to 30% more productivity from the existing workers and current equipment to become leading suppliers and an integral part of the U.S. supply chain. They also are in a better position to as leverage the current situation happening in manufacturing right now.

The benefits of giving SMBs an advantage by equipping them with effective MES and enabling them to better compete with larger enterprise manufacturers are manifold. While it’s clear creating and maintaining a more resilient supply chain aids the U.S. economy, local communities, which often rely on small factories as economic drivers, also are strengthened when these SMBs thrive.

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