Time and technology have changed, but many software companies are still selling dated manufacturing solutions. Get more value from your MES with a few simple tips.
We’ve gotten a lot of comments on our Two-Comma MES blog. Some agree the benefit of some MES may never justify an (extreme) two-comma cost. Others are quick to defend the high-cost, arguing a world-class manufacturing software system will have a world-class price. If you cut corners on your MES, and install a “cheap” software solution, you cut corners on productivity – the profit-driver for manufacturers.
There’s truth in both positions, and there isn’t an “optimal” price for manufacturing software. That said, times have changed, and the MES of the past no longer offer the value (even if slick marketing is hiding the creaking old code of some systems) they once did. We need to change how we approach the MES purchasing process.
Breaking Down the MES Budget
Assessing value starts with your budget. How much benefit can you buy for your budget? The IT budget is normally 1% to 3% of a company’s annual revenue. For a $50,000,000 company, that would leave a budget of $500,000 to $1,500,000. From that budget, you need to pay for support, licenses, hardware, software, license fees and infrastructure costs. How much of that will be left for an MES? With the budget left, is there any way to financially justify the extreme cost some companies demand for their software?
In today’s fast-paced, technology-driven marketplace, it just doesn’t make sense to install a high-cost, system if you’re not getting flexibility. Systems like that are normally difficult to upgrade or adapt. Overly complex and over-engineered systems can’t handle the demands of modern manufacturing, even if the system looks modern, is it flexible and can it manage change? Will the effort and cost to maintain system efficiency represent a sunk cost that will quickly bury any initial benefit?
Tips for Finding Paperless Manufacturing Value
A powerful, effective and incredibly efficient MES doesn’t have to cost two-commas. It can be easy-to-use, easy-to-install, adaptable and flexible without a high cost. Here are a few tips for finding value in your search for an MES:
Avoid the modules: Modules sound like a great option. Presented like a giant MES vending machine, you pick your feature, nothing more and nothing less, then it comes together magically. It doesn’t work that way. A “module” is often a separate app built by an entirely different company, which means configuration and integration costs. The more modules you add, the higher the cost. Companies offer a lower base cost, then drive profit on the “modules.” An integrated MES platform, with all features and functions built natively for the system, will deliver more functionality for a much LOWER cost.
Beware of forms-based systems: Companies that promise to “configure” a system for you specifically are likely using forms. They “make” it for you by mirroring your current processes through a form in their MES. They add to the initial cost of the MES a configuration “charge,” and know that any time you want to change the form, due to a process change or manufacturing need, you’ll go back to them. A forms-based system seems perfect at first, and then loses efficiency over time. A truly flexible, and lower-cost, option will use your current work instructions on a framework within the MES. Any work instruction or plan can be used in the software, delivering all the tools and functionality you want or need, in the format you want.
Flexible support options: Some companies, especially companies using an older software system, will hide the true cost with a confusing array of support options. There may be tiers of support, an entire configuration team you pay for, a base cost with an array of additional costs. It may seem like “comprehensive” support, but add it all up and the “support” will have destroyed your budget. Look for a solution provider who can offer a set cost for support expenses, or who is willing to offer a cost-not-to-exceed contract for work.
Utilize a phased implementation: With a phased implementation, you have greater control over the pace, focus and cost of a project. You select the features and functionality that offer the greatest return and put them in place first. Other systems, especially ones that require extensive configuration or messy integration of modules, will limit how you use and roll out the software. You’ll have a much higher initial cost, longer training, and often an open-ended implementation phase where expenses pile up. With a phased implementation and an integrated software system, the software is installed once and you turn on and use whatever you want whenever you are ready.
In the past, a 6 – 18 month installation and implementation period for an MES was standard. A multi-million, two-comma cost was to be expected. MES has grown up since then. The technology and market have changed, and manufacturers are benefiting with lower-cost systems that are adaptable, flexible, easy-to-use and –learn.
Don’t be suckered by flashy promises of a high-cost software company. Look for value in your manufacturing software solution, not two-commas.