Mastering Metrics that Matter: Research Reveals Manufacturing Software Systems Help Distinguish Leaders over Laggards
New Research from LNS Research and MESA International Uncovers the Metrics, Technologies and Strategic Best Practices Driving Better Manufacturing Performance
Highlights Value of Epicor Consulting Services in Bringing the Right Discipline and Expertise to Fast Track Performance Management Improvement
It's been said: “you can't manage what you can't measure,” and now new research reveals that manufacturers with the right software tools in place to track and manage performance metrics come out on top-outperforming competitors by up to 10% in areas such as manufacturing cost reduction, net profit margin increases, and on-time delivery.
The 2013-2014 Manufacturing Metrics that Really Matter research study conducted by LNS Research, a technology research firm focusing on the industrial space, and MESA International, a global not-for-profit industry association that helps manufacturers understand the role of Information Technology in plant operations, surveyed more than 200 manufacturing professionals globally across a wide range of industries to understand which operational metrics had the greatest bearing on their bottom line and what strategies were most effective in helping drive improvement around these key metrics.
Epicor Software Corporation, a global leader in business software solutions for manufacturing, distribution, retail and services organizations, sponsored the five-month research study on manufacturing performance improvements. The research identifies trends and correlations between specific business and operational metric improvements, the use of Manufacturing Operations Management (MOM) and other enterprise manufacturing software applications, role-based metrics reporting, and the effect of emerging technologies such as mobile, big data, and cloud computing on metrics programs.
“Metrics are a critical element to drive operational performance and financial results,” says Stewart Baillie, vice president, product, manufacturing for Epicor. “Many of the 'metrics that matter' identified by the research aren't new-they're things that organizations have traditionally tracked. What's changed is the speed of data and the quality of information. Business demands today dictate that speed must be real-time and the quality of the information absolute. Business systems, such as enterprise resource planning (ERP) solutions and manufacturing execution systems (MES), have improved both and are today available at a price that is affordable to the midmarket, whereas in the past it was only available to big companies.”
Having the Right Systems in Place Support Successful Metrics Programs
Some of the key relationships uncovered were correlations between average annual metric improvements and the use of software technologies to support them. Overall, the most deployed applications by respondents were ERP, Planning, Scheduling & Dispatching, Quality Management, MES, and Asset Management. Specifically, there was marked adoption growth from last year's survey: ERP from 67% to 74%, and MES from 35% to 40%.
“Many companies have an understanding of high level metrics, but what they don't know is the why,” says Baillie. “In order to analyze the root cause companies must have confidence that their metrics data is true. Shop floor production must be measured correctly and consistently; automated systems such as ERP and MES ensure the validity of metrics data.”
Many Companies Challenged with Execution
While the research reveals that software is a key factor in helping companies optimize performance improvement metrics and boost financial results, it shows that software, in and of itself, is not a panacea for achieving operational and financial improvements. Some 85% of survey respondents also had process improvement programs in place, underscoring the importance of people, process and methodology for performance management.
Many organizations have a difficult time getting started with performance management initiatives-from getting the data collection software in place to translating the analysis in a way that's meaningful to company goals and objectives. Epicor has consulting resources and expertise to help organizations understand “which levers to pull” to enhance performance and training to help organizations get set up for success, and accelerate improvements for faster return on investment (ROI).
In addition, Epicor senior researchers help to examine the data and correlate operations practices-strategic and tactical-with manufacturing performance. Through performance benchmarking, Epicor makes it possible to share best knowledge throughout an enterprise and leverage vertical and industry best practices. “It's important to work with a vendor that can show customers how to interpret their company's unique data and metrics so improvements 'stick,' and the improvement process becomes repeatable and sustainable,” adds Baillie.
A complimentary copy of the 2013-2014 Manufacturing Metrics that Really Matter summary report and eBook are available for download here: http://info.epicor.com/Manufacturing-Metrics.
About Epicor Software Corporation
Epicor Software Corporation is a global leader delivering inspired business software solutions to the manufacturing, distribution, retail and services industries. With over 40 years of experience serving small, midmarket and larger enterprises, Epicor has more than 20,000 customers in over 150 countries. Epicor enterprise resource planning (ERP), retail management software, supply chain management (SCM), and human capital management (HCM) enable companies to drive increased efficiency and improve profitability. With a history of innovation, industry expertise and passion for excellence, Epicor provides the single point of accountability that local, regional and global businesses demand. The Company's headquarters are located in Austin, Texas, with offices and affiliates worldwide. For more information, visit www.epicor.com.
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