IT teams within manufacturing enterprises should spend their days concentrating on business outcomes that align with the larger strategy and generating new revenue streams. In reality, IT teams are often saddled with keeping machines running and holding viruses at bay.
Sound familiar? IT personnel are often too busy putting out fires to maintain creative sparks.
One promising solution to this conundrum is that of manufacturing execution system (MES) capabilities provided as a cloud-based subscription, or “MES-as-a-service.” A panel of experts gathered at the 2019 GE Digital User Conference to explore the concept. GE Digital Product Marketing Director Ganesh Hegde moderated a panel consisting of Mohamed Siam, CEO, and Karim Magdy, deputy general manager, both of Obeikan; Doug Bayer, associate director of global manufacturing innovation and capability with Procter & Gamble Company; and John Baier, senior manager for information systems operations with The J.M. Smucker Company.
Hegde: What market conditions are driving the need for MES-as-a-service?
Siam: One of the biggest benefits of this is reducing cost, particularly for small-to-medium-sized companies, where it’s a matter of survival. They must improve efficiency. We’ve found that in the United States about 20% of companies have budget to invest in the IoT. Globally, it’s less than 10%. With the as-a-service model you can invest as you go while getting the benefits. It’s a win/win for companies and providers.
Bayer: MES-as-a-service is a very interesting opportunity. It is new. It is different. In our main sites, we have installed infrastructure, but as we think about expanding through acquisition, we’re asking how do we connect and enable those additional sites in the end-to-end supply chain? MES-as-a-service provides an option we weren’t thinking about before. We will pursue it.
Baier: We’re looking at where the next opportunity is. We recognize how critical MES has become. This is a more adaptive model. What does the future look like? Not the mega-uplifts of years past. I think MES-as-a-service would benefit even those just starting their digital journey. Think about new customers not yet sure if they want all these functionalities. If you have this model, you have the opportunity to get MES without the major investment. Then you can expand as you go. This will help people.
Siam: The lack of a need for investment will speed the integration of MES.
Baier: And it resolves the upgrade process. It reduces complexity of information systems.
Hegde: Right. You’re moving those items from CAPEX to OPEX [capital expense to operational expense].
Magdy: MES-as-a-service enables you to focus on what you do. You don’t need to install big computers on your lines; you can just use tablets. And along with on-time decision-making we get better accessibility—we’re not limited to on-premise.
Siam: There are lots of target customers for this. Just consider the trend in industry to use contract manufacturers. Their current ability to use their data is very low. Small- and medium-sized enterprises have very lean structures for IT. Not many resources. They can’t do this on their own—they don’t have the capital to invest.
Hegde: What unique needs do users have in MES-as-a-service?
Magdy: They want to know they can have full integration with their core systems and their IT systems in the background. Then they want to know what kind of security is provided with MES-as-a-service. If I am integrating my financial data and my production data, do I know this is safe? Then, what is the R&D roadmap for my product? Finally, what if the provider is going out of business? Will I have access to my data?
Hegde: What challenges exist with the MES-as-a-Service arrangement?
Baier: It’s good and bad. There is the confidentiality perspective—protecting consumers’ assets. How do we provide the same level of security as a service provider?
Bayer: We need to walk first, with our eyes open. We must consider what this solution can deliver. You have to make sure that your scope is properly defined with your success criteria. This doesn’t absolve you from building the right level of experience; without the right level of expertise the risk is that you come out with arm’s-length engagement, which can corrupt your initial investment.
Baier: The people and skills are important. You should consider if the provider can support what you need with their model. Do they have the right human and technical assets? Or would we have to conform to their capabilities?
Hegde: On a global scale, what are the benefits of this approach?
Bayer: We at Procter & Gamble have a manufacturing network of 130 sites in 35 countries. When we think about end-to-end synchronization of our supply chain, with information flowing to the right points, and then we think about expanding that network and providing a portfolio of products that is more complex, we see a global map in the future that is much different than today.
MES-as-a-service can be a perfect fit—enabling the foundation on which we operate our supply chain together with contract suppliers leveraging the GE Manufacturing Data Cloud. As we automate our supply chain, there is a spot for MES-as-a-service.