Fabtech 2016 Winning Management Buy-In for a New Digital Shop Floor Management Solution

Presentation Title

Winning Management Buy-In for a New Digital Shop Floor Management SystemMike LeRoyPaper-Less, LLC

FABTECH 2016 LAS VEGAS

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Mike LeRoy30+ years background Manufacturing technologies focused on Manufacturing Execution Systems (MES) & Enterprise Resource Planning (ERP) Software DevelopmentSoftware Development ManagementSales in the ERP Domain Sales Management of MES and ERPBusiness Unit ManagementPresident of Paper-Less, LLC


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Vision MES OutlookManufacturers are in business to make money. While operations teams often chafe at the need to justify projects that will clearly help them do their jobs effectively, responsible managers will insist on a sound business case to fund investments in systems and improvement projects. Unfortunately, many engineers, IT and operations personnel have not been trained to build a financial business case. MESAs members have struggled with the challenge of successfully justifying investments and getting them funded.

MESA Metrics Guidebook: ROI and Justification for MES


FABTECH 2016 LAS VEGASExplain the evolution of this presentation3

Vision MES OutlookIt goes on to say.. Before teaching the basic elements and methods for building a business case, this guidebook explains the advantages of taking a detailed approach to Return on Investment (ROI).

MESA Metrics Guidebook: ROI and Justification for MES



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Vision - The Birth of an OpportunityThe opportunity to implement a comprehensive Manufacturing Execution System begins and ends with YOU.


FABTECH 2016 LAS VEGASWhen you think about it, thats the way with everything. Whether its furniture for the living room, a new car, a new machine on the plant floor or an MES system, everything begins with a groundswell of enthusiasm, stemming from one person. Then the selling begins, and I am not talking about the selling someone does from the outside to peddle their product, I am talking about the selling the individual does to others they need to convince before they can buy. If a purchase is small, whether at home or at work, you can usually make those decisions yourself. If a purchase is large, you need to gain the consensus of others before you can proceed. Thats when the going can get tough.

Did ever stop to think about how many times you initiated something versus follow the lead of an initiative someone else launched? I have to say many of the things I participated in over my career were launched by someone else. But, in time you progress and at some point you realize there is no one else that can initiate things. I needs to be you.

So, motivation is the key. Someone needs to hold the vision and this is particularly hard as manufacturers get better and better at what they do. The opportunities for huge gains from and any given initiative reduce as processes continue to improve. But, our experience suggests there remains to be significant strides that can be made on the shop floor from a processes and procedures standpoint, but someone needs to hold the vision.

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VisionProspective customer in northern Illinois

All paper basedNo prior experience with MES systemsResearched on the webPitched the contributions of MESGained executive sponsorshipAssembled an evaluation team and is narrowing the field of vendorsAssembly supervisor


FABTECH 2016 LAS VEGASThe birth of an idea can come from anyone. 6

VisionI think it is possible for ordinary people to choose to be extraordinary. - Elon Musk, CEO of SpaceX



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Vision The Outcome The sponsor gets what they want.The sponsor decides against it.The sponsor gives up.


FABTECH 2016 LAS VEGASThere are only a few scenarios to conclude an initiative.

The sponsor gets what they want, and everyone is happy.The sponsor decides against it it was not all they thought it would be.The sponsor gives up they get tired of pushing. Giving up usually comes from not being able to get the buy in of others either your subordinates and peers, or your management.

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Vision Why Give Up?Giving up is more common than we could imagine. Why?

- A comprehensive system requires widespread endorsement- The decision process becomes too cumbersome- MES systems value is not understood by upper management

Our number #1 competitor is no decision.


FABTECH 2016 LAS VEGASBefore engaging vendors, an early assessment can be made on the acceptance level of stakeholders within your organization can be made, and this will also help determine some early perspectives on the return on investment.

Ask your management if the are open to your idea. And with that you gain insight to the potential for your idea if you journey forward.

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Vision - Clich timeIf you do what youve always done, youll get what youve always gotten.- Anonymous



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Motivation The TypicalBetterFasterEasierLess Error ProneMore efficientSaves money


FABTECH 2016 LAS VEGASMotivation for an MES purchase can come from a variety of things. These are the typical assumptions.11

Motivation The ClubCompliance!

Customer contracts/fines Late deliveryQuality issuesISO or other regulatory guidelinesFDA



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Motivation The ClubChicagoland customer

Very successful implementation projectDelivered on time and within budgetConducted a walkthrough and commended them on their vision Apparently is was the FDA!


FABTECH 2016 LAS VEGASCustomer, Government, FDA

Why wait for the club to come down. Push toward process improvements that will save you money now, under your own initiative?13

Motivation A New ClichDont let your ability to cope with the status quo overwhelm your desire to change it. - Mike LeRoy



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Justification - MetricsReturn on investmentHard and soft savings (tangible/intangible)Internal Rate of ReturnHurdle RatesNet Present ValueDiscount FactorsProjected Cash Flow Cost Benefit Analysis


FABTECH 2016 LAS VEGASDetermine how fast a return on investment your company requires

Ask your CFO about your hurdle rate

Net Present Value Ask your CFO about the discount factor used in your company

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Justification Selling your ideaWho is the sales rep?

At a point in time, the selling transitions to youWhen you are sold, you the need to begin to sell others within your organizationNot selling a particular product, but your idea.



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Justification Be PreparedDo you have what it takes to gain approval?Can you convince management of the project benefits?Should you involve other key influencers in the organization to help tell the story? Do you need others, peers, to help tell your story?


FABTECH 2016 LAS VEGASWhat happens when ideas are met with less than an enthusiastic response?

Mostly the die on the vine.

Contrasted against gaining momentum when met with enthusiasm.17

JustificationHow comfortable are you presenting the need for a $25,000 project for your company? $250,000??? $2,500,000??????

Not everyone does this everydayRecruit SupportSurround yourself with expertise, particularly the CFO


FABTECH 2016 LAS VEGASBe convincing and confident18

Justification Manage ExpectationsHappiness is determined by the outcome versus the expectations

Overall Happiness = Actual Outcome > Expectations

Expectations are everythingSet them properlyBe conservative


FABTECH 2016 LAS VEGASSet expectations right, you have a chance to become successful.

When you become successful on major projects like an MES system, you become a hero. 19

JustificationROI

If there is true ROI it suggests the solution is currently being paid for through waste under the current methods.


FABTECH 2016 LAS VEGASAir Conditioner Example

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JustificationCost of Delay



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JustificationRemember.. responsible managers will insist on a sound business case to fund investments in systems and improvement projects.

And contrasting against that, many .. have not been trained to build a financial business case.. And struggle with the challenge of successfully justifying investments and getting them funded.



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Knowledge Executive InsightUnderstand your businessWhat do your executives need to approve a project?What are their business drivers?What are their business objectives for the year?What is the cash flow situation at your company?What will you do if what you want is impeded by the above?



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Knowledge Executive InsightDoes your project line up with their objectives?Do you know what other projects you are competing with? Lets discuss budget



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Knowledge - MESUnderstand the Orientation of Others They may not know what MES isThey may have a dated understanding or a misunderstandingThey may thoroughly understand a different type than you are suggesting



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Knowledge - MESMES systems are computerized systems used in manufacturing to track and document the transformation of raw materials to finished goods. MES provides information that helps manufacturing decision makers understand how current conditions on the plant floor can be optimized to improve production output. MES works in real-time to enable control of multiple elements of the production process (e.g. input, personnel, machines and support services) - Wikipedia



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Knowledge - MESA manufacturing execution system is a control system for managing and monitoring work in process on a factory floor. An MES keeps track of all manufacturing information real time, receiving up to the minute data from robots, machine monitors and employees. Although MES is used to operate as self contained systems, they are increasingly being integrated with EP software suites. - Search Manufacturing ERP



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Part of the problem is that MES means different things to different people.

Top Down Bottom UpInside Out

Knowledge - MES


FABTECH 2016 LAS VEGASWestern States

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IssuesResultTop DownEvent driven based on the needs of ERP. Not aligned to processes on the floor.Workers push back. Poor adoption/success rates. Inside OutTend to be fragmented depending on how vertical the solution is and may result in disparate systems.System administration is more complex. Replication of data, and inconsistent dataBottom UpMachine centric, statistical in nature, people processes are not well represented Isolated information, disconnected from ERP and can be very finite in its contribution.

Knowledge - MES


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Knowledge - MESDo not fall into the assumption that MES is.

Nothing more than a glorified data collection system

Nothing more than a system that talks to the machines and equipment


FABTECH 2016 LAS VEGASERP and finance orientation versus production and maintenance

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Data Collection Manufacturing Execution SystemMOM, CPM Smart Manufacturing, Manufacturing 4.0, Digital Manufacturing

Knowledge MES Evolution


FABTECH 2016 LAS VEGASThese all speak to the evolutionary path of manufacturing systems. And depending upon ones experience and if or when they encountered software in manufacturing, they can have a very strong opinion in play that you need to understand and shape before it undermines your initiative. 31

Knowledge - MESWe are at a point in the evolution of manufacturing systems where we can expect comprehensive solutions from MES / MOM software providers.


FABTECH 2016 LAS VEGASThese all speak to the evolutionary path of manufacturing systems. And depending upon ones experience and if or when they encountered software in manufacturing, they can have a very strong opinion in play that you need to understand and shape before it undermines your initiative. 32

Knowledge - ERP ProcessesProcesses in the office are plentiful

EstimatingPurchasingCustomer Order ProcessingAccounts PayableAccounts ReceivableGeneral LedgerPurchasingInventory ControlMaterial Requirements Planning

Capacity PlanningCostingPricingCash Requirements ForecastingPhysical InventoryCycle CountingCustomer Relationship MgmtTime and AttendanceMaintenance Management

PayrollHuman ResourcesEmployee Incentive ProgramsSales commissionsSales ForecastingSales AnalysisWarranty Claims TrackingBusiness AnalyticsWarranty Claims & more


FABTECH 2016 LAS VEGASERP selections and ERP software has matured to where buyers look to ERP providers to address all of the needs above from one vendor. They systems have matured and so have the expectations of ERP to the point where expectations are what they are today.

The beauty of this is we no longer have a bunch of standalone systems. 33

Knowledge Production ProcessesProcesses on the plant floor are plentiful

Time and attendanceLabor reportingProduction status and resultsInventory ReceiptsInventory TransfersWIP InventoryWork AssignmentFinished goods inventory

Supporting DocumentationKanban reporting Genealogy TrackingLabel PrintingQuality ManagementNon-Conformance ReportingCorrective ActionRouting Steps

Work InstructionsActivity ManagementReportingMachine InterfacesMove ticketsDashboardsAttendance TrackingAnd more


FABTECH 2016 LAS VEGASShop floor systems should be no different think in processes and workflows, not in modules.

There are systems that can help with most of these processes, under one roof.

Engineering solutions have been separate from ERP systems for years, but MES systems should not be. 34

Justification may come from greater visibility into productionJustification may come from accuracy in the interface to ERPBut the real justification comes from improving processes on the production floor

Knowledge Focus on Manufacturing



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Knowledge Production ProcessesThink in processes and procedures, not departments and modulesContinuous ImprovementMonitoring & ControlSupporting InformationRecordingWork Assignment


FABTECH 2016 LAS VEGASMES/MOM Systems should enable all of these.

Recording may involve Quality, Production or Inventory data, issues may stem from any one of those.

Thinking on modules results in modules, from different vendors, and different modules from different vendors leads to disjointed user experiences and added overhead for system administration.36



FABTECH 2016 LAS VEGASYou cannot manage a process until you can measure it. You cannot measure a process without data. So the key becomes,,,,, how to gather that data with minimal imposition?37



FABTECH 2016 LAS VEGASThese two are joined at the hip. If I do work assignment correctly, I have little data I need to enter because I already know what is being done since I assigned it, therefore I only need to know what I dont know from production. But these two things together, pave the way toward a more responsive manufacturing environment, and enable continuous improvement processes.

You cant manage a process until you can measure it, you cant measure it until you can collect data. So collecting data with minimal imposition is the key. 38

Paper-Less, LLC Confidential

Paper-Less, LLC Confidential

PROD Order Dept Mach Item Oper Empl Date Time Good Qty Bad Qty Speeds Cycles Settings ReadingsE R P

EngineeringInventory ControlManufacturingQualityMaintenance

Customer ServicePurchasingAccountingPlanningHR/Payroll

PROD

Life Cycle of Data Knowledge - MES

FABTECH 2016 LAS VEGAS39It builds on the same information. It is not production, quality, accounting, planning its all manufacturing orders and items and related data.

If you think in modules, and not workflow you will have disjointed solutions and disjointed databases.

Confidential Paper-Less, LLCGartner and MESA Annual Survey Extend the Value of MES Beyond the Plant, 10/26/14. MES attacks immediate cost-cutting and continuous improvement opportunities for local plant operations.

Knowledge - MES


FABTECH 2016 LAS VEGAS40

Confidential Paper-Less, LLCGreg Gorbach, VP at ARC Advisory Group Both MES and MOM aim to increase the throughput and quality of manufacturing processes. "No matter what you call it, these things are key to the new competitive paradigm. This is about using information to drive performance inside and now, outside, the four walls of the enterprise.

Knowledge - MES



Reduced changeover/setup times Reduced data entry times Reduced shift change paperwork Reduced lost paperwork Reduced inventory transactions Reduced investigation/resolution times Reduced product delays (lost time between operations)

Knowledge Stated MES Benefits



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Confidential Paper-Less, LLCFilled gaps in visibility on our shop floor Integrated Quality Control procedures into our work flowNo longer have to physically track down work orders to determine current statusWork order traceability is at our finger tipsSaved over $250,000 for our physical inventory processesReduced data entry time 50% and errors by 66%, job activity is real-time & accurateReduced scrap by 50% representing a cost savings of over $250,000 in the first 9 monthsReduce overhead by $115,000; shop paper by over 28,000 pieces; and labor processing by 83%Improved accuracy & timeliness - collecting over 20K transactions /week with only 1or2 errorsSignificantly reduced cycle time enabling customer service to quote more accurate ship datesExperienced a significant increase in the accuracy of our direct labor hoursReduced data entry by 70%Increased productivity, decreased costs and were able to realize payback in 6 monthsimmediately saw a $135,460 reduction in labor and paper cost and we are projected to conservatively see a 5% reduction in scrap ($339.058) as well as a 3% productivity improvement ($357,000)

Customer Comments



Confidential Paper-Less, LLCFilled gaps in visibility on our shop floor Integrated Quality Control procedures into our work flowNo longer have to physically track down work orders to determine current statusWork order traceability is at our finger tipsSaved over $250,000 for our physical inventory processesReduced data entry time 50% and errors by 66%, job activity is real-time & accurateReduced scrap by 50% representing a cost savings of over $250,000 in the first 9 monthsReduce overhead by $115,000; shop paper by over 28,000 pieces; and labor processing by 83%Improved accuracy & timeliness - collecting over 20K transactions /week with only 1or2 errorsSignificantly reduced cycle time enabling customer service to quote more accurate ship datesExperienced a significant increase in the accuracy of our direct labor hoursReduced data entry by 70%Increased productivity, decreased costs and were able to realize payback in 6 monthsimmediately saw a $135,460 reduction in labor and paper cost and we are projected to conservatively see a 5% reduction in scrap ($339.058) as well as a 3% productivity improvement ($357,000).

Customer CommentsQUALITY



Confidential Paper-Less, LLCFilled gaps in visibility on our shop floor Integrated Quality Control procedures into our work flowNo longer have to physically track down work orders to determine current statusWork order traceability is at our finger tipsSaved over $250,000 for our physical inventory processesReduced data entry time 50% and errors by 66%, job activity is real-time & accurateReduced scrap by 50% representing a cost savings of over $250,000 in the first 9 monthsReduce overhead by $115,000; shop paper by over 28,000 pieces; and labor processing by 83%Improved accuracy & timeliness - collecting over 20K transactions /week with only 1or2 errorsSignificantly reduced cycle time enabling customer service to quote more accurate ship datesExperienced a significant increase in the accuracy of our direct labor hoursReduced data entry by 70%Increased productivity, decreased costs and were able to realize payback in 6 monthsimmediately saw a $135,460 reduction in labor and paper cost and we are projected to conservatively see a 5% reduction in scrap ($339.058) as well as a 3% productivity improvement ($357,000).

Customer CommentsINVENTORY



Confidential Paper-Less, LLCFilled gaps in visibility on our shop floor Integrated Quality Control procedures into our work flowNo longer have to physically track down work orders to determine current statusWork order traceability is at our finger tipsSaved over $250,000 for our physical inventory processesReduced data entry time 50% and errors by 66%, job activity is real-time & accurateReduced scrap by 50% representing a cost savings of over $250,000 in the first 9 monthsReduce overhead by $115,000; shop paper by over 28,000 pieces; and labor processing by 83%Improved accuracy & timeliness - collecting over 20K trans/week with only 1 or 2 errorsSignificantly reduced cycle time enabling customer service to quote more accurate ship datesExperienced a significant increase in the accuracy of our direct labor hoursReduced data entry by 70%Increased productivity, decreased costs and were able to realize payback in 6 monthsimmediately saw a $135,460 reduction in labor and paper cost and we are projected to conservatively see a 5% reduction in scrap ($339.058) as well as a 3% productivity improvement ($357,000).

Customer CommentsVISIBILITY




Customer CommentsProductivity




Customer CommentsAccuracy & Timeliness




Customer CommentsPaper & Costs



Confidential Paper-Less, LLCPaper-Less MV2 was a great addition to our system. It has filled gaps in visibility on our shop floor and integrated Quality Control procedures into our work flow.



Confidential Paper-Less, LLCBefore Paper-Less, we had to physically track down work orders and determine current status of activity. Since the implementation of MV2, work order traceability is at our finger tips.



The Dexter Company Fairfield, IAThe Dexter Company saved over $250,000 using the Paper-Less for their physical inventory processesDexter Apache HoldingsIA



Everbrite, Inc. Greenfield, WIusing Paper-Less software, weve achieved:

reduced data entry time 50% reduced errors by 66% job activity is real-time & accurate

Everbrite, Inc.WI



using Paper-Less for 9 months, weve: reduced scrap by 50% representing a cost savings of over $250,000



Trail King Mitchell, SDPaper-Less has allowed us to: reduce overhead by $115,000 reduced shop paper by over 28,000 pieces reduced labor processing by 83%

Trail King, Ind.SD



Lube Devices Manitowoc, WIwith Paper-Less, we dramatically improved the accuracy and timeliness of shop data daily, we collect over 4,500 transactions with only 1 or 2 errors per week.

Lube Devices, Ind.WI



with Paper-Less, we significantly reduced cycle time enabled customer service to quote more accurate ship dates



Conn-Selmer Elkhart, INSince implementing Paper-Less, we have experienced a significant increase in the accuracy of our direct labor hours reduced data entry by 70%



Centrax, Ltd. Devon, England(Centrax) was very impressed withthe quality control within Paper-Less, which will have a major impact on reducing re-work, non-conformance and paperwork.



Lube Devices Manitowoc, WIusing Paper-Less software even increased employee morale throughout the entire shop



Continental Electronics Dallas, TXPaper-Less helped our ERP implementation:

reporting time was cut in half inventory accuracy has improved The applications are seamless employees love the touch screens



using Paper-Less, we increased productivity, decreased costs and were able to realize payback in 6 months...



SummaryRemember.A comprehensive MES system affects many areasSponsorship and collaboration will be needed above and belowResponsible managers will insist on a sound business case to fund investments in systems and improvement projectsBut you need and deserve to know what they will or will not approveMES will drive ROI through greater efficiency and reduced overall costsIf there is ROI, there is a cost for further delay of implementing your vision



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Thank You


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