The Manufacturing Enterprise Solutions Association (MESA) International and research firm Cambashi released 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 facts:
- While many manufacturers and producers struggled over the past few years, some actually improved against business metrics.
- 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.
- 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.
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.