Manufacturer's Nirvana -- Real-Time Actionable Information
Written By: Predrag Jakovljevic
Published On: March 12 2005
Extended enterprise resource planning (ERP) software (or sometimes referred to as ERP II, the term coined by Gartner), extends ERP information to other interested users presumably with no barriers to data flow (see Enterprise Applications—The Genesis and Future, Revisited). Such an enterprise system would provide extensive business management functionality (e.g., real-time production monitoring, warehouse management, job shop tooling, quality control, supply chain planning, execution and connectivity, customer relationship management [CRM], preventive maintenance, and so on), that was previously available only through multiple vendors' solutions. It would also involve a single database solution with integrated modules to deliver improved implementation, ease-of-use, and efficient administration for manufacturing companies.
The system would be a complete enterprise solution with the provider even being able to offer its customers one-stop-shop development for programming, sales, implementation, and support services. This would in turn help manage the rapidly changing business environment of today, as there would, for example, be a survey of current business practices, an analysis detailing areas of improvement, an assessment of the use of the current system, all of which becomes an advocate for software enhancements to better serve the customer.
In other words, such an integrated broad system would expand the business intelligence (BI) of the enterprise solution by helping businesses better capture data, track operations, and improve overall efficiencies.
How Close Is This Nirvana?
How many traditional ERP vendors, including the largest ones, have natively built-in real-time production monitoring, warehousing management, time and attendance capture, and complete quality management systems?
Well, almost none when it comes to integrating ERP and parts of a manufacturing execution system (MES), which, as per the Manufacturing Enterprise Systems Association (MESA International) definition is essentially any system that uses current and accurate data, triggers, and reports on plant activities as events occur. From electronic production management systems to shop-floor data capture, MES functions manage operations from point of order release into manufacturing to point of product delivery into finished goods.
The possibility of integrating and providing all elements of a complete manufacturing solution, at least from a same source if not exactly as a single computing platform, has always been tempting, and possibly lucrative, but never delivered, not even by once mighty automation provider Invensys, who once had under its roof Baan, Marcam, Avantis, and Wonderware, respective ERP and MES products, yet never delivered together (see The Name and Ownership Change Roulette Wheel for Marcam Stops at SSA Globa—Part Three: Last-Ditch Effort by Invensys).
Thus, IQMS (http://www.iqms.com), a privately held, Paso Robles, CA (US)-based developer of EnterpriseIQ, a well attuned extended-ERP system for small and mid-size plastic processors and like repetitive manufacturers, might be unique in the entire ERP arena, and not only within its mid-market realm, by providing the powerful IQ RealTime Production Monitoring module to ensure plant efficiency by identifying poor machine performance before it becomes a problem. The module provides automatic tracking of production by hardware being wired directly to production machines, while a special user screen (e.g., touch screen, capable of simplifying data entry) can be created for shop floor personnel to provide virtually real-time data flow to and from the shop floor (i.e., to bring the production and ERP information together). Both office and plant personnel should thereby know via a color-coded screen exactly what is happening with each machine (i.e., "yellow" would indicate that the machine is down, while "green" would mean it is in production).
Real-time information that can thereby be captured would be: cycle times, machine efficiency, scrap percentage. The machine operator can enter timely production, backflush raw materials, print labels, change cavitation of the mold on the fly as necessary, assign labor, record rejects with user-defined codes, enter downtime with user-defined codes, and view internal and external documents (e.g., part production, setup control, material staging, quality control, overall plant performance, etc.). All the above information chunks increase data integrity and reduce transaction costs, given the complete access to the ERP functionality as to automatically update production schedule and generate production reports. Without such a module, gathering actual production information is typically a time consuming, tedious, and highly subjective task, while the reconciliation of the actual data on the floor with the planned data in ERP is often delayed for days, if not weeks, with the resulting lack of actionable information.
The examples of potential benefits from intrinsic integration of ERP with the plant floor and of achieving near real-time information are multiple. For one, such a system could enable many data entry functions that are traditionally performed in the office to be transferred directly to the manufacturing floor, so that the material personnel would transact the issue of resin to and from machines on-line instead of turning in the material transfer paperwork to be entered the next day by the office. Further, the material could be classified as regrind immediately within the system, giving production planning a real-time inventory situation of resin.
Production counts would be automatically updated with the IQ RealTime Production Monitoring system and verified by machine operators, giving supervisors constant feedback on how their shift is performing. Production reports for completed jobs would then be generated and analyzed the day after the run is complete, whereby this process would typically lag production by few weeks.
All of this should bring the production floor and financial and planning departments closer together because they would be working shoulder to shoulder instead of passing outdated papers back and forth. This could in turn also encourage discussions regarding improvements on how to do things internally instead of both teams continuing to live in their separate worlds, whereby there would be no cognizance by the "office staff" when some machine would go down or the production would be far off the target for some shift.
The system even offers touch screen time clock capabilities to input labor and automate timecards. Incidentally, the optional IQ Time & Attendance module is a broad time clock system that also eliminates the need for a third-party time clock system typically implemented by ERP competitors (i.e., normally by partnering with the likes of Kronos) and minimizes time required for labor data input.
The product generates payroll timecards or output files for external payroll systems (since the native integration with the IQ Payroll module is currently available only in the US), and it also generates more accurate job costing information by allowing labor tracking to specific tasks. The module provides links to labor reporting for production reporting or job costing in JobShopIQ, IQ Project manager, and IQ Preventive Maintenance modules, as required. IQ Time & Attendance also supports visual scheduling of shifts and supports multiple devices for login purposes, such as keyboard, "swipe" readers, and biometric scanners.
The above illustration would depict great first steps toward the manufacturer's nirvana of making every batch a great batch, or, in the plastic processors' language, to ensure shot-to-shot and run-to-run repeatability. At least, if they can eliminate the terrible runs and lift the ranking of every run, the result would be a significant financial gain (for more details, see Process Manufacturers—Great Batch, Every Batch).
Integrated Warehouse Management System
Along similar lines would be the wireless IQ Warehouse Management System (WMS) module that supports hand held scanners, personal digital assistants (PDA), and radio frequency (RF) technology and thus likely improves plant floor communications and lowers the cost of inventory data collection while aiming at achieving on-line updates in almost real-time, although this kind of functionality tends to be provided by many peer products, such as Made2Manage Systems. The module handles a raft of inventory transactions such as receiving, manual adjustments, physical inventory, production entry and materials backflush, pick tickets, packing slips, etc., while also having access to the above IQ RealTime Production Monitoring information like setup jobs, entered scrap, reported production, printed labels, or reported downtime codes. For automotive suppliers, another industry of IQMS' interest, it features a serialized inventory labeling system that is Automotive Industry Action Group (AIAG) compliant.
Although the above optional modules require additional shop floor user licensing and additional hardware, they often turn out to be a cost effective production monitoring solution, whereby production information could be accessible from virtually anywhere. To that end, the machine interface units (MIU) are mounted directly onto each machine control panel to capture the machine cycle information and transfer it to the machine monitoring unit (MMU). The data from each machine is collected through the RealTime Box (MMU) and sent back to the Oracle database via a IQ RealTime workstation (a dedicated Microsoft Windows server), whereby the capacity for each MMU is 64 machines.
For some plastic shops that require even more complex monitoring of molding, stamping, forming, extrusion, and assembly, there is the IQ Gate application programming interface (API) as a gateway to Mattec Corporation' equivalent solution, a leading process monitoring specialist product in the industry. The information that would be transferred to Mattec would be production schedule or work order information, item data and bill of material (BOM) data, while EntepriseIQ would capture production data from Mattec, such as cycle information, downtime intervals, scrap information. The API thereby cross-references or maps scrap and downtime codes between EnterpriseIQ and Mattec, whereas there are automated data transfers via the IQ Alert notification system and at user defined intervals for data exchange.
EnterpriseIQ also offers a number of useful utilities, such as the IQAlert notification system, with many nifty business activity monitoring (BAM) features (see Business Activity Monitoring—Watching The Store For You). For example, appropriate persons are alerted of low inventory levels, missed shipments, late or pending purchase order receipts or other burning issues. It can also schedule unsupervised tasks like running a material requirements planning (MRP) engine, electronic data interchange (EDI) processing, or creating database backups late at night.
Another notable utility would be IQ Enterprise Plant for multiple facilities or companies. EntepriseIQ provides extensive interplant capabilities for complex organizations throughout all modules allowing multiple plants or companies to utilize a single database to centralize data storage and administration and reduce redundant activity across multiple sites. That is to say, multiple divisions can exist in a single company, and multiple companies can exist in a single business entity, whereby each division contains its own BOMs, tools, dies, inventory, cost, supply, schedules, and production records. This allows for multiple facility or distributed manufacturing, as sales and purchasing operations can be centralized and decentralized concurrently, while forecasting, master scheduling, and MRP can function separately for each division (or across divisions) for interplant requirements.
Users can view location-specific or plant-wide information, while financial statements will then show the financial condition of each company, as well as any combination of companies within the business entity, as interplant transfers are streamlined with the general ledger (GL) rollup. From a technology side, the system would use Windows Terminal Server (with Citrix Metaframe) operating across a wide area network (WAN).
While some larger complex enterprises, with a variety of unrelated businesses and divisions, may need a best-of-breed solution to extend their activities into e-collaboration in a more flexible manner, we also believe that managing this large application portfolio, much of which involves partnering or extensive integration and customization, is cumbersome to say the least. While the best-of-breed approach can have its merits (see Best of Breed Versus Fully Integrated Software: The Pros and Cons, Single Source or Best of Breed—The Debate Continues and Pure-Play CRM Vendors: Choose an Integrated or Best-of-Breed Solution?), we believe it consistently leads to additional integration costs and complicates service and support arrangements. Also, interfaces between the above depicted diverse components to a core ERP system usually require significant tailoring. This can be a barrier to future changes as further revising already modified code is notoriously time consuming, costly, and risky, while there are also occurrences of these product concoctions having different "look-and-feel" across the range.
In a nutshell, bad news with interfaces comes from the need for continuous management and upgrade coordination, increase in IT support staff, multiple software company maintenance contracts, and complications with report writing. Moreover, one should beware of financial (in)stability of multiple software providers, while all involved providers may have different, even diverging individual business strategies.
Conversely, a fully integrated extended-ERP product like IQMS's EnterpiseIQ might almost completely eliminate all of the above issues for a small or medium repetitive manufacturing enterprise with a scarcity of IT skills. Namely, when the data is stored in the same database, there is no need for the creation and management of the above ungainly interfaces, because there is only one master application, whereby data visibility is inherent, since with the proper links, data can be gathered and disseminated in multiple ways, without delay.
Yet, in most cases, multiple databases on the shop floor (e.g., quality management data, production and warehousing real-time transactions, plant maintenance data, ERP master data, etc.), are rarely in sync, making timely decision-making difficult and often inaccurate. This concept holds true any time information is kept in more than one location, since without a highly advanced method of synchronization, the chances of having accurate data stored in more than one location are small indeed.
If data is only synchronized on a batch mode basis daily, or even by shift, managers have a difficult time making timely, accurate decisions, which impacts all functions such as production planning, shipping, inventory control and purchasing, while also handicapping customer service representatives as they attempt to serve customer requests for their order status. In the worst cases, some data is never synchronized to the master ERP system, which creates a serious communication void and promotes the proverbial and likely the worst situation of so called "islands of automation". In this scenario, various groups under the same roof concern themselves with only their records and responsibilities and never collaborate to address the total environment in a unified way.