Despite Economy, Manufacturers and Producers Can Improve Earnings, Profits

Chandler, Ariz. and Cummaquid, Mass. February 4, 2010 – The Manufacturing Enterprise Solutions Association (MESA) International and research firm Cambashi today released both a new report, Correlating Plant Performance to Business Performance for MESA Premium members, and a publicly-available summary based on those findings, Metrics that Matter Revisited. 

This primary research found three important facets: Firstly, that while many manufacturers and producers struggled over the past few years, some actually improved against business metrics.  Secondly, those who did improve financially were also more likely to have improved against their plant operations and IT metrics-- showing a clear correlation between plant performance and business performance (see graph).  Thirdly, those who improved are similar to others, which indicates that producers in all locations, all types of industries, and of all sizes are able to make financial improvements by improving operations, using appropriate metrics mechanisms, and implementing IT systems to support their progress.                          Source: Correlating Plant Performance to Business Performance,

                                          © 2010 MESA International & Cambashi Inc.
 

This is the third primary research study in the MESA Metrics that Matter series, started in 2006. As in the original Metrics that Matter study, the respondents who improved significantly on business metrics over the past three years are considered “Business Movers.”

Some distinctions of “Business Movers” vs. “Others” are:

• A larger portion of Business Movers than Others improved by 10% or more on 24 of the 26 operations metrics included in the study, for example energy consumption, customer reject rate, carbon footprint, systems uptime, and schedule attainment.
• Business Movers have more timely performance metrics programs.  They are more likely to use fully automated data collection, show results to operations in real-time or within a shift, and incorporate operations results into business metrics within a week.  More of them exhibit rigor in performance metrics practices as well, with effective links between operations metrics and business metrics, and review of that alignment between metrics and their effectiveness.
• Business Movers are more likely to complement MES/MOM with an array of information technologies that can leverage that plant floor data.  These include enterprise resources planning (ERP), business intelligence (BI), enterprise manufacturing intelligence (EMI), supplier relationship management (SRM), radio frequency identification (RFID), business alert management (BAM), and business process management (BPM).  The Business Movers are less likely than Others to use homegrown or custom-built software.

One critical finding is that any company can improve business performance.  The profile of the Business Movers is very similar to the profile of the overall response base.  All sizes of organizations in all major geographies are in each group.  Companies that operate plants in a continuous process, batch process, mixed mode for packaged goods, discrete, and other mixed modes were all able to achieve Business Mover status.  What sets them apart is the structure of their performance metrics programs, coupled with the level of management commitment and understanding.

The comprehensive report, Correlating Plant Performance to Business Performance for MESA Premium Members, has extensive charts and graphs to illustrate findings, along with quotes from Industry Leaders who participated in telephone interviews.  This report also offers best practice tips on crafting an effective performance metrics program similar to how the Business Movers gauge and accelerate improvement.  It is available in MESA’s Resource Library now at www.mesa.org/correlatingmetrics2010. 

The public report Metrics that Matter Revisited is available to all interested parties from www.mesa.org/metricsrevisited2010, Cambashi or the study sponsors.  In addition to MESA International, premium funding sponsors for the study are: GE Intelligent Platforms, Invensys Operations Management, Logica, Rockwell Automation, and Siemens.  Supporting sponsors are Cordys and SAP AG. In conjunction with MESA, these companies seek to increase the understanding of the roles that plant performance and operations metrics play in improving the performance of manufacturing and production companies. 

About MESA
MESA is the first choice for industry professionals seeking innovative thinking and leadership to drive operations excellence. Our Member-driven working groups, industry events and educational forums:
•    Enable members to connect, contribute, cultivate understanding, and exchange strategies to facilitate operations excellence
•    Result in white papers, podcasts, guidebooks, research studies, webcasts and other resources that accelerate learning and knowledge transfer
•    Provide best practices guidance to drive greater operations performance and profitability
For more information, visit: www.mesa.org

About Cambashi
Cambashi, based in Cambridge UK and Cummaquid MA USA, provides independent research and analysis of the business reasons to use IT in industry worldwide.  It specializes in engineering, enterprise, plant and supply chain applications and the infrastructure to enable industrial firms to use IT effectively.   Cambashi publishes market size estimates in the engineering applications Market Observatory and industry issue research studies in the Cambashi Reports Industry Directions series.  Its clients vary in size from small to large and include most of the leading software vendors and many pioneering IT users.  Cambashi is a member of CATN, an international association of consultants. To learn more, visit: www.cambashi.com