Why Should You Invest in IQMS MES Tools: RealTime Production and Process Monitoring?

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1 Why Should You Invest in MES Tools: RealTime Production and Process Monitoring?

2 In manufacturing, your money is made on the shop floor. Real-time data is power in helping to identify and then proactively address inefficiencies and challenges on your factory floor. The following represents the various areas of profits loss and the savings that you could be realizing to help your company justify the investment in production and process monitoring, also known as a Manufacturing Execution System (MES). While these items have been compiled from our customers' actual experiences, results are dependent on the company utilization and commitment by the user. These items in general will provide you with areas of savings that can result in a rapid payback timeframe. So what are profits? Profits are what is left over when you subtract your material costs and work center run time costs (including overhead and labor) from your selling price. Do you ever feel like there is not much left over? It doesn t have to be that way. The big savings: Average Payback Period: 6 to 18 months (less than one year is typical). Scrap Reduction: Typically a 10 to 30% reduction. Productivity Improvement: Typically a 5 to 10% improvement (most systems are justified on a 2 to 4% improvement). Customer Success: With MES tools, thermoset composite products manufacturer, Mar-Bal, Inc., was able to gain significant savings, such as: Regular and monthly physical inventories eliminated: $83,000 annually Accurate production reporting through the RealTime interface: $62,000 annually Accurate reporting of global material purchases allowing for more negotiating power with volume purchasing: $30,000 savings to date 5,000 potential machine hours no longer lost to downtime for physical inventory Typical Results from Customers Utilizing MES 10.8% Average Savings in Cycle Time 9.3% Average Total Plant Productivity Improvement 9.8% Average Improvement in Eliminating Work Center Downtime 14.8% Average Present Level Machine Downtime Recorded 12.6 Hours (Average) Saved Per Week in Scheduling Get control of the problem with knowledge today, not knowledge tomorrow.

3 Profits Loss Area No. 1: Lost Work Center Time Work center run time is one of the largest variable costs of manufacturing. Material, labor and overhead costs are fairly fixed from competitor to competitor and region to region. The one area of your factory floor that you can control is work center run time. Shorter, better run times equal increased profits. How does downtime occur? Inadequate planning for mold and tool changeovers, such as not having enough staff to perform the change or changing the tool more than is necessary. The tool was removed from the machine before all the necessary parts were made. The tool for the next job is not ready. Sorry, it s out for repair! Sufficient job materials were not prepared. The MES software is designed to reduce machine downtime and increase work center productivity with real-time status updates on production levels, scrap levels, downtime and other key data that might affect the production performance of your plant. Additionally, the MES scheduling and planning program is a powerful engine that incorporates all requirements and objectives throughout your shop floor and delivers an optimal schedule that meets your demand, while maintaining your lean objectives. An optimal schedule will decrease work center downtime, improve reactions to problems when they occur in "real time," allow for flexibility to the job schedule at any time and allow management to view the current scheduling situation for more timely and well informed decisions, especially when any unscheduled changes or problems occur. The MES software permits for the tracking, reporting and display of a job's completion time and the display of the next job to run. This helps reduce the changeover time between jobs. Gain an extra shift of production! Just one simple lost second on a 20-second part results in the loss of one whole shift of production per week per work center. Find that one little second and gain a whole shift of production to your plant immediately. What could you do with a entire extra shift of production? Do the Math: What is your number of lost machine hours due to work center downtime? x # machine down hours machine cost/hour = $ lost Typical savings with MES package is an immediate 14 to 20% reduction in machine downtime.

4 Profits Loss Area No. 2: Poor Inventory Control With detailed, accurate inventory control, you can know where every part, spring, knob, box and pallet is located within your organization. With MES inventory control tools, a superior material management program can be established. Material planning, material forecasting, proper inventory allocation and accurate physical inventories can help you best manage your materials. Customer Success: With MES tools, thermoplastics resins and alloys compounder, Network Polymers, was able to gain significant inventory savings: Eliminated overstock of raw materials Reduced daily inventory levels from more than 11 million pounds to an average of six million Increased inventory turns by 25 percent for three major feedstocks Decreased yearly physical inventory from five to seven days to only 1.5 days (a 75 percent time savings) Materials savings can run in the 10 to 15% range with substantial reductions in inventories. Profits Loss Area No. 3: Cycle Time Improvements Actual improvements can be realized by real-time monitoring of cycle performance. Obviously, jobs that run consistently outside of quoted standards can cost valuable profits. For example, slow cycle times are a major culprit behind the creation of scrapped parts. Do your personnel solve this problem by adjusting on the fly, or do they utilize real-time monitoring tools to dig deeper and cure the real problem? Do the Math: If a company can reduce its average cycle time on 22 work centers from 21 seconds to 20 seconds through the use of the RealTime Monitoring system, they can: Save 3 seconds per minute of run time per work center 3 seconds/minute x 60 minutes/hour = 180 seconds/hour 180 seconds/hour x 24 hours/day = 4320 seconds/day or 1.2 hours/day per work center 1.2 hours/day x 5 days/week x 50 weeks/year = 300 hours/year/work center 22 machines at 300 hours/work center = 6,600 plant wide hours/year $15 overhead rate per work center hour x 6,600 hours/year = $99,000 savings per year How much could you save?

5 Profits Loss Area No. 4: Preventative Maintenance Regular machine and tool maintenance can ensure that work centers do not unexpectedly go down and parts are produced most efficiently. Just as your car runs best and gets premium gas mileage with regular oil changes and full tires, your work centers operate in the same way. With preventative maintenance tools, you can implement a complete maintenance program for all your machines, tools, dies, auxiliary equipment and more. Additionally, maintenance personnel can be immediately alerted to problem areas such as down work centers or machines experiencing problems. This immediate notification of problems can minimize downtime and lost production. By tracking the actual usage (hours and cycles run) of equipment, you can proactively determine the use and wear of various equipment being monitored and create a preventative maintenance schedule that can minimize downtime and lost production. Did you know? In larger companies, reducing maintenance expenditures by $1 million contributes as much to profits as increasing sales by $3 million. Improving maintenance and decreasing unnecessary maintenance expenditures by $1 million is considerably easier and more likely to occur than obtaining $3 million in new sales. Profits Loss Area No. 5: Quality Control One of the most critical aspects of manufacturing, and certainly one of the most concerning, is quality management. With RealTime Process Monitoring tools, you can reduce the number of inspectors and equipment necessary to meet your customers tough requirements, while gaining peace of mind that you are meeting strict quality standards. Statistical Process Control (SPC) and process monitoring provides for the automatic capture and recording of process data and associated variable data. The system automatically analyzes the data recorded and allows the user to generate the necessary charts, thereby reducing the time, effort and manpower that is required to accomplish SPC. Good quality control tools will deliver a decrease in the number of rejects you produce due to the monitoring of process conditions, the use of SPC analysis and the fact that the system will alert you in real time to process variances, shifts and trends. Benefits include: More time available for quality control to analyze and solve quality problems due to less time spent manually collecting and charting process and associated part data Greater ability to achieve "zero defect" manufacturing Improved auditing capabilities and a decreased amount of time spent on audits Compliance with automotive (TS), medical (FDA, 21 CFR Part 11) and ISO standards We utilize all aspects of the quality module to do our daily work and often times our customers tell us our systems are better than theirs - and these comments are audits done by medical device customers. There is no doubt that the quality module allows us - a very small company - to outperform most of our largest competitors. Linda Sturtevant, imark Molding, Inc. Decrease your rejects by 15 to 30% with real-time monitoring of cycle times and your quality processes.