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Value of MES in real dollars $15,000 per machine, every year.

Imagine increasing profit $15,000 per machine, sustained every year.  We can do it.

Modern Machine Shop’s “Top Shops” benchmarking survey, 2012 shows immense value for the use of an MES system.  Critical findings of the survey:

“The average gross sales for the Top Shops were 14 percent higher than the other shops.”

“The Top Shops achieve higher spindle utilization and faster setup times because they put a good deal of thought into optimizing shop floor processes and practices.”

“These shops are also more likely to implement continuous improvement strategies to become more effective as well as lean manufacturing concepts to become more efficient.”

Top Shops had a 12.6% better OEE metric than average shops.  A 10% improvement in OEE (capacity utilization) will increase IFO 22% (from the book: “Overall Equipment Effectiveness: A Powerful Production/Maintenance Tool for Increased Profits”, Robert C. Hansen, Pgs 47-56).

Memex’s MERLIN MES is a tool that allows your organization to achieve these results!

The value of MERLIN, using actual KPI measurements to your operation, is significant:

  • A +10%-20% increase in OEE is achieved by our customers following installation, typically within 12 weeks.
  • Using an average of $302,066 in annual revenue per machine and average profitability of 18.9% (Modern Machine Shop, Top Shops – Benchmark Your Machining Business, 2012, page 24*) a conservative 10% increase across 90 machines translates to +$2.7 Million per year increase in revenue and +$500,000 in profit.
  • This means, by machine, a +$30,206 increase in revenue and a $12,000 to $15,000 increase in profit.
  • At a conservative 10% increase in efficiency the breakeven is typically 3-5 months.
  • ROI of 100% in the first 12 months based on profit, or approaching 1,000% when factoring in increased revenue!

*Sponsored by AMT, the survey covered more than 500 manufacturing facilities.

MES is one of the best strategic drivers to obtain a competitive advantage in the manufacturing landscape improving profitability, reducing waste, and ensuring compliance with regulations.  The top 5 summary reasons are here.  For more detail, including ROI analysis tools and Lean Roadmap tools call Memex directly.

1) An MES system should be the highest priority project as it is more important than a capital equipment acquisition.  The value of an MES is significant to the stakeholders of a company far surpassing any other ROI.

2) Plant wide efficiency improvements greater than 10% are normal and drive a company to significant success.

3) Profitability is exponentially improved and sustained every year.

4) ROI typically of 100% in the first 12 months based on profit, a payback typically in the 3-5 months range.

5) Every day a company waits to implement an MES is lost profits that cannot be re-covered.

Manufacturing journalist TR Cutler profiles the OEE Calculator

Manufacturing journalist, TR Cutler, recently profiled the OEE Calculator by Memex Automation for Industrial Electronics Today.

The leading OEE (overall equipment effectiveness) Calculator, quantifies the increase in Income From Operations (IFO or EBITDA) for Same Sales Volume and Sell Everything scenarios for various improvement criteria. The OEE ROI calculator is a very preliminary ‘rough cut’ analysis tool for developing a business case (to engage real-time manufacturing performance data for shop floor machines in manufacturing plants). Part of the reason Calculator is ‘rough’ is because a Plant average is used for several important parameters such as OEE, shift output, and quality rate.

Much greater precision can be developed by using actual OEE data differentiated by product run and by work station. Future monitoring and proactive use of the information provided by an installed system significantly improves accuracy of alternatives; these data assists leadership teams in setting direction and focus to maximize results quickly. Rattray noted that, “First Look results are generated using Small, Medium and Large preselected productivity improvements to show the range of possible results.”

The current input values in the OEE Calculator, use hypothetical but realistic values for a machine tool plant. It is estimated that for most manufacturing plants, the Calculator results have a confidence level of eighty-five percent (85%), plus or minus three percent (3%.)

The OEE Calculator does not apply the Theory of Constraints (TOC) therefore, if the proper application of tools and OEE improvement is not achieved at the constraint, then the increase to IFO is also limited. The quality factor usually has more impact than Availability or Speed Factor for bottom line improvement. When waste or scrap is improved, OEE improves; the result, less material needed. It is important to apply Lean Six Sigma techniques to your manufacturing operations, so as to achieve significant results. Memex offers services in this area, as documented in our website.

Memex suggests that users of the OEE Calculator, “Closely account for the change in material since it determines the new amount of total units made and applies the base case unit material cost to the total number of new units required to make the good units for the associated scenario.” The Calculator zeroes all of the improvement parameters and individually examines what one (1) OEE point improvement is worth for Availability, Speed Rate, and Quality. This data provides the user an approximation of financial impact on IFO for types of improvement activities.

Memex Automation Talks Benefits of Direct Numerical Control Software

Originally published online by SBW!RE.  Link to full article here.

According to John Rattray of Memex Automation, “By monitoring assets such as tooling, raw materials, Work In Progress, computers, vehicles and any moveable assets, companies can know quickly, exactly, and securely where assets are located. Direct Numerical Control Software (DNC) improves machines operational performance and increases shop floor productivity.”

DNC Software for Windows 7, Vista, Windows XP and others is a 32-bit multi-threaded communications & file management system allowing simultaneous upload and download to multiple CNC controls. It includes a CNC Editor, Backplotter and many other utilities and features. DNC Software is easily connected to CAD/CAM systems over industry standard networks and is available in a Client-Server configuration. Besides machine tool DNC communications, other shop floor data can be collected from shop terminals, tool pre-setters, bar code equipment or SPC systems.

2009 was a Banner Year!

Much work was done in 2009 with new product development and many customer deployments. The flagship OEE+DNC product was rolled out this year.

Many customers offered to work with us to evaluate its merits as well as many aerospace customers, including one in a corporate wide multi-plant rollout into production.  Going into 2010 we are working with about 2 dozen customers in various stages of deployment with this enterprise product offering 5-20% increase in productivity at the shop floor.

Memex’s engineering team continued in its reputation as the “Go To machine technology company”, and rolled out many new hardware and software products in 2009, from memory boards, the Ax750 I/O Link – Fanuc Interface Board, Ax2200HS High Speed File Server, AxDNC and AxConfig software tools and many other items.

Although it was a tough year for our manufacturing industry, our business paradigm of offering tools to increase efficiency was in demand, and we responded with solutions, attending trade shows, industry association events and delivering customer successes.

Company-wise, thanks to some timely positioning of resources, our investors and our employees along with our distribution channel are very pleased and we are ready to roll for 2010!

Memex OEE+DNC Increases Productivity and Lowers Costs for U.S. Aerospace Customers

Memex announces that many new aerospace consumers in the USA and throughout North America have chosen our products to monitor and control their machines on the shop floor. They are utilizing Memex’s complete system to address their OEE and DNC requirements. This gives them the ability to monitor production status, run time, down time reasons, reject causes in real time and automatically report on OEE accurately. They have control of their part programs with Memex’s newly re-designed, state of the art DNC software, called AxDNC. Work orders on the floor are managed through Memex’s OEE+DNC and can be integrated to their ERP systems as well as their CAD/CAM part programs and HR reporting.