Build a Business Case for Plant Systems MESA

Build a Business Case for Plant Systems MESA un. Conference May 5, 2014 Platinum Keystone Sponsors Gold Keystone Sponsors Do you know MESA?

Format for this Session • • • What is an un. Conference? MESA Content to start discussion MESA Working Group hot topics Discuss your questions and expertise Create action items for MESA Learn from each other Experience what MESA Knows! Copyright 2014, MESA International The power of knowing what MESAKNOWS

Introductions Darren Riley Director Solution Strategy/Business Development Dassault Systems MESA ROI Working Group Chair John Dyck Job Title/MESA Title photo John Jackiw Business Development Manager, MAI MESA Metrics Committee Chair jjackiw@altavia. com Copyright 2014, MESA International The power of knowing what MESAKNOWS

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 Technologies in production operations Copyright 2014, MESA International The power of knowing what MESA KNOWS

How MESA Delivers MESA International: Building Bridges-of-Understanding from the Plant to the Enterprise Peer -to. Peer Points -of. View Global Education Program Speaking with the Voice of Industry’s Practitioners Copyright 2014, MESA International The power of knowing what MESA KNOWS

MESA’s Working Groups ROI 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 Copyright 2014, MESA International The power of knowing what MESAKNOWS

Quick Survey People Business Technology Copyright 2014, MESA International The power of knowing what MESA KNOWS

ROI is still the biggest obstacle! Business People Technology Copyright 2014, MESA International The power of knowing what MESA KNOWS

Timing and Importance of Benefits Copyright 2014, MESA International The power of knowing what MESA KNOWS

More Comprehensive List Non-quantified – Soft Benefits • • • Copyright 2014, MESA International 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. The power of knowing what MESAKNOWS

Capacity Utilization Theoretical Idle/Excess Non-Productive - Productive + MES do great job with capacity…. but what do you do now? Source – IMA 1996 Copyright 2014, MESA International ? The power of knowing what MESAKNOWS

Capacity Recommendations Excess Capacity Created Type Labor Volume Revenue, CI Velocity Revenue Volume Revenue, Efficiency Velocity Revenue Equipment Floor Space ft 2 Capacity Situation Copyright 2014, MESA International Leverage Revenue utilization < practical Reduce Eliminate Do Nothing COGS Overtime, Outsource ($) Overhead Outsource ($) utilization ≈ practical utilization > practical Market Equality The power of knowing what MESAKNOWS

Obvious Costs • • • Hardware Software Internal Services/Consulting Risk Management Copyright 2014, MESA International The power of knowing what MESA KNOWS

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 Copyright 2014, MESA International The power of knowing what MESA KNOWS

MESA ROI Guidebook COST COMPONENTS COST-BENEFIT ANALYSIS PROJECT DEFINITION Total Life Cycle Costs ofon Projects Return Investment Definition and Assessment Process Planning Cycle with TCO Payback Identification Stakeholder Costs Outside of MES Time-Value of Money Planning, Preparation and Feasibility Phase BENEFITS IDENTIFICATION & ANALYSIS Future value Internal Introduction Present Value Services Critical Manufacturing Issues Project Development Phase Capital Structure Estimated Business Impact Hardware – Infrastructure and Application Debt Equity Identifying Business Impact Software Owner’s Equity Internal Costs Increased Revenues Weighted Average Cost of Capital (WACC) Reduced Costs Services and Consulting Net. Avoidance Present Value Risk Management Cost Internal. Risk Rate of Return Support Phase. Reduced Modified IRR Hardware Qualitative (non-quantified) Benefits Software Project Go/No Go Criteria Quantifying Benefits Internal Costs Mutually Exclusive Project Analysis Benefit Timing Services and Consulting Real Option Method Benefits Conclusion Risk Management Capital Budgeting Process Other Methods of Cost Definition Risk Management. Cost-Benefit Conclusions Soft Costs for Soft Benefits Copyright 2014, MESA International The power of knowing what MESAKNOWS 30 30 32 33 33 33 34 35 35 36 38 39 40 40 41 41 42 42 42 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) • B 2 MML and Batch. ML XML instantiations of ISA-95 • Other presentations or webcasts • GEP modules 100 s of materials available to Premium members at no additional charge Copyright 2014, MESA International The power of knowing what MESAKNOWS

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 (P 2 E) integration Be heard and drive industry forward Join the conversation at: www. mesa. org Copyright 2014, MESA International The power of knowing what MESAKNOWS

To Improve Your Success… www. mesa. org Copyright 2014, MESA International The power of knowing what MESA KNOWS

Thanks for Participating! Darren Riley Director Solution Strategy/Business Development Dassault Systems MESA ROI Working Group Chair Darren. RILEY@3 ds. com www. mesa. org Copyright 2014, MESA International The power of knowing what MESAKNOWS