Safety in Numbers?

Safety in Numbers?

Recognise this scenario - as manufacturing director or production manager you invest money, time and effort to gain control and insight into your manufacturing operations. You know what’s working. You’re seeing improvement opportunities from automation and other initiatives. You’re even able to predict problems before they have an impact on productivity, quality or performance. And then, in come the accountants with their crude, elementary operational measures, questioning your performance. No one would listen to them…except they are speaking about the company’s financial results.



The accountants tell you the way costs are calculated. They don’t answer your questions, you get nowhere.   You know you’ve done the right things operationally, so why won’t they take a different and very logical look at what is going on?

This situation is very common. Logical cause and effect insights aren’t going to win the day with accountants focused on external financial statements, especially not in the short term. The accountants have a job to do, and it requires following financial statement rules, even if they fly in the face of logic… and frequently good sense.

The question is, how can you change the game over the longer term to better align operational and financial metrics?

The Manufacturing Enterprise Solutions Association (MESA) International is a worldwide not-for-profit community of manufacturing companies, information technology hardware and software suppliers, systems integrators, consulting service providers, analysts, editors, academics and students. The combined purpose is to improve business results and production operations through information technology and best management practices.

MESA member companies and individuals and our knowledgebase span the full range of manufacturing environments from discrete to batch to mixed model to process. The association's efforts are focused on helping the manufacturing community to use information technology to provide real-time visibility into the production process. Further, MESA is committed to connecting that visibility to create business results, achieving such real value chain objectives such as lean manufacturing, collaborative supply chain management, quality and regulatory compliance, asset performance management, and product lifecycle management.

MESA provides a variety of programs and events that work together to help manufacturers:

• Better understand what is possible in terms of information technology to improve profitability, business value, agility, and customer satisfaction
• Engage "best practices" to see what other manufacturers have done to achieve measurable success 
• Approach investment decisions in technology with more confidence
• Learn to improve the deployment of new technology

In 2010, MESA started a new working group to focus on understanding how to justify investments and appropriately calculate the expected business benefits of various types of projects that change business processes and enterprise solutions.  Every year, manufacturing companies are faced with a diverse set of business issues/challenges which require some form of capital investment to be made across one or more elements of their organisation.

The challenge faced by the manufacturing department is assembling a credible business case that clearly articulates the value of an investment. This team has been creating a new Metrics Guidebook and Framework covering how to build - and present - that busness case. The guidebook was first released to MESA's Premium members. Now, MESA has just completed the revisions, which focused on explaining the root causes of the challenges to improving financial insights into operations. It also provides a framework to apply costs to operations in a logical, quantifiable, cause-and-effect manner based on the Resource Consumption Accounting approach to costing.

As with the original MESA Metrics Guidebook and Framework, the volunteer team that developed this Second Edition has deep experience in generating improvements for production and manufacturing companies.  In addition to leader John Jackiw of Alta Via, authors include David Caruso of Endeca, John Clemons of Maverick Technologies, Richard Fournier of IBM, Julie Fraser of Cambashi, Charlie Gifford of 21st Century Manufacturing Solutions, Peter Martin of Invensys, Darren Riley of Rockwell, and Larry White of the RCA Institute.

The Second Edition of the MESA Metrics Guidebook and Framework is available immediately to MESA Premium members in the MESA Resource Library.

Time to stop the tail wagging the dog?