do you know mesa ? build a business case for plant systems mesa unconference may 5, 2014 platinum...

Do you know MESA?

Build a Business Case for Plant SystemsMESA unConference

May 5, 2014

Platinum Keystone Sponsors Gold Keystone Sponsors

http://www.brocksolutions.com/default.aspx

The power of knowing what MESAKNOWSCopyright 2014, MESA International

Format for this Session

• What is an unConference?• MESA Content to start discussion• MESA Working Group hot topics• Discuss your questions and expertise• Create action items for MESA

Learn from each otherExperience what MESA Knows!


IntroductionsDarren RileyDirector Solution Strategy/Business DevelopmentDassault SystemsMESA ROI Working Group Chair

John DyckJob Title/MESA Title

John JackiwBusiness DevelopmentManager, MAI MESA Metrics Committee Chair [email protected]

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The power of knowing what MESA KNOWSCopyright 2014, MESA International

Introduction to MESA International

MESA is…

…building bridges-of-understanding from the Plant to the Enterprise

…to drive clarity on the role and value of modern Information Technologiesin production operations


How MESA Delivers

Speaking with the Voice of Industry’s Practitioners

Peer-to-Peer

Global Education Program

Points-of-

View

MESA International:Building Bridges-of-Understanding from the Plant to the Enterprise


MESA’s Working GroupsROI Guidebook Working Group• Founded in 2010• Focused on documenting the business

case for MES/MOM initiatives, from project identification to benefits and costs identification and analysis

• Open for new members (must join MESA to participate)

• Published MESA ROI Guidebook in May 2014

• Chaired by Darren Riley, Solutions Consultant at Apriso, a division of Dassault DELMIA


Quick Survey

PeopleBusiness

Technology


ROI is still the biggest obstacle!

People

Business

Technology


Timing and Importance of Benefits


More Comprehensive ListNon-quantified – Soft Benefits• Meeting regulatory requirements• Providing better shop floor process visibility and

decision-making• Increasing the speed and accuracy of decision

support• Supporting and enabling business growth• Enabling fast response time to issues (e.g. quality

recalls, equipment breakdowns, fault-finding, etc.)• Increased operator satisfaction• Capturing knowledge from the aging and retiring

workforce in a standardized business process• Increased customer satisfaction as a result of

consistent quality and order accuracy and favorable lead times

• Improved public relations (demonstrated sustainability practices, avoided environmental impact, etc.)

• Exposure to potential customers that the workforce is empowered with information and has a direct impact on production, quality, etc.


Capacity Utilization

Source – IMA 1996

Theoretical

Productive

Non-Productive

Idle/Excess

+

-

?

MES do great job with capacity….but what do you do now?


Excess Capacity Created

Type Leverage ReduceEliminate

DoNothing

Labor Volume Revenue, CI

COGS Overtime, Outsource ($)

Velocity Revenue

Equipment Volume Revenue, Efficiency

Velocity Revenue

Floor Space

ft2 Revenue OverheadOutsource ($)

Capacity Situation utilization < practical utilization ≈ practicalutilization > practical Market

Equality

Capacity Recommendations


Obvious Costs

• Hardware• Software • Internal• Services/Consulting• Risk Management


Less Obvious Costs• Running an additional production line or shift• New First Article of Inspection (FAI) needs• Parallel systems• Production losses• Process validation needs• Curriculum development• Maintenance and support • Diagnostics and troubleshooting


MESA ROI GuidebookCOST-BENEFIT ANALYSIS

45Return on Investment

45Payback

46Time-Value of Money

47Future value

47Present Value

48Capital Structure

48Debt Equity

49Owner’s Equity

49Weighted Average Cost of Capital (WACC)

49Net Present Value

50Internal Rate of Return

51Modified IRR

53Project Go/No Go Criteria

54Mutually Exclusive Project Analysis

55Real Option Method

56Capital Budgeting Process

61Cost-Benefit Conclusions

62

PROJECT DEFINITION

7Definition and Assessment Process

7Stakeholder Identification

11

BENEFITS IDENTIFICATION & ANALYSIS

15Introduction

15Critical Manufacturing Issues

15Estimated Business Impact

16Identifying Business Impact

16Increased Revenues

18Reduced Costs

20Cost Avoidance

24Reduced Risk

24Qualitative (non-quantified) Benefits

25Quantifying Benefits

27Benefit Timing

27Benefits Conclusion

29

COST COMPONENTS

30Total Life Cycle Costs of Projects

30Planning Cycle with TCO

32Costs Outside of MES

33Planning, Preparation and Feasibility Phase

33Internal

33Services

34Project Development Phase

35Hardware – Infrastructure and Application

35Software

36Internal Costs

38Services and Consulting

39Risk Management

40Support Phase

40Hardware

40Software

40Internal Costs

41Services and Consulting

41Risk Management

42Other Methods of Cost Definition

42Risk Management

42Soft Costs for Soft Benefits

43


More Resources

(Include relevant materials from Resource Library here – these are examples – delete this)• White papers #• MESA Metrics that Matter Research Studies• Guidebooks (pick 1-2 most relevant to topic)• B2MML and BatchML XML instantiations of ISA-95• Other presentations or webcasts• GEP modules

100s of materials available to Premium membersat no additional charge


Why MESA?Global community for improving Operations Management with IT

Best practices & guidance to drive productivity & profitability

Global Education Program raising competency for production IT success

Facilitate innovation for real-time Plant to Enterprise (P2E) integration

Be heard and drive industry forward

Join the conversation at: www.mesa.org

http://www.mesa.org/


To Improve Your Success…

www.mesa.org



Thanks for Participating!

Darren RileyDirector Solution Strategy/Business DevelopmentDassault SystemsMESA ROI Working Group [email protected]

www.mesa.org

mailto:[email protected]


do you know mesa ? build a business case for plant systems mesa unconference may 5, 2014 platinum...

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