2015 Gartner-MESA Survey Analysis Deliverable

A-15609 2015 MESA/Gartner
Business Value of MES Survey

November 6, 2015 v4.
Created by: Julie Meyer, PRM Design and Delivery
For: Rick Franzosa, Simon Jacobson, Supply Chain
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Contents
Project summary
Study objectives
Findings
Overview of survey results
2014 slides included where available
Project Summary Study Objectives

The purpose of this study is to assess if, and to what extent, MES (Manufacturing
Execution System) applications are delivering ROI and creating value for
companies in the manufacturing industry. Specifically, this study aims to identify
the characteristics of organizations maximizing the value and returns on their MES
investments.
For the last four years, Gartner has partnered with MESA International
(Manufacturing Enterprise Solutions Association) to collect quantitative data from
IT and business leaders at MES user companies. The results can help arm Gartner
clients with new-found value statements and benchmarking insight for
implementing, utilizing and/or upgrading their organizations MES applications.
Results will be used for Best Practices, Hype Cycle, Impact Appraisal, Market
Guide, Predicts, Innovation Tech Insights and Survey Analysis. Goal: Survey
Analysis Research Note in December.
4
Respondent Profile Industry
S01. Which of the following most accurately represents your organizations primary industry classification? If your organization
participates in more than one industry, please select the one industry in which you are most involved.
n=119
Industry
Industry Type
CPG Mfg
22%
Discrete/Industrial Mfg
19%
Life Sciences Mfg (Pharma, Biotech)
13%
High Tech Mfg

Automotive Mfg
8%
Rolled Goods/Industrial Process Mfg
8%
Semiconductor Mfg
11%
4%
Medical Device Mfg
3%
Oil/Gas/Refining
3%
Aerospace/Defense Mfg
3%
Chem/Specialty Chem Mfg
3%
Other manufacturing
3%
Discrete
48%
Process
49%
Other
3%
Respondent Profile Decision-making, Group in Org

S02. What role(s) do you have in relation to Manufacturing Execution Systems (MES) within your organization?
S03. Which of the following best describes the group within your organization in which you reside? Single response
n=119
MES Decision-making
Responsibility
Group within Organization
Part of team that

makes decisions
76%
IT
(manufacturing
or corporate)
45%
Provide input to
decision makers
Make the final

decision(s)
54%
15%
Multiple responses allowed

6
Other
5%
Line of
Business
(Mfg)
23%
Hybrid Line of
Business/IT role
27%
Survey Results
IT Trends Important to MES Architecture Today

Q01. Considering your organizations current IT climate, which of the following IT trends are most important to your Manufacturing IT Architecture
today and which do you expect to be most important by year-end 2018?
n=119
Ranked 1
Master data management (MDM)
26%
Supply chain collaboration
The Internet of Things (IoT)
Mobility
17%
6%
8%
18%
20%
62%
56%
37%
12%
18%
8%
16%
Cloud computing 3%3%
Other 3%2%
36%
38%
Big data
Ranked 1 or 2
Ranked 2
6%
5%
IT Trends Important to MES Architecture 2018

Q01. Considering your organizations current IT climate, which of the following IT trends are most important to your Manufacturing IT Architecture
today and which do you expect to be most important by year-end 2018?
n=119
Ranked 1
Supply chain collaboration
34%
Master data management (MDM)

Big data
The Internet of Things (IoT)
20%
20%
25%
16%
21%
11%
12%
Ranked 1 or 2
Expected
Change
54%
56%
-2%
45%
62%
-17%
37%
37%
0%
23%
18%
+5%
Today
Mobility
8%
9%
17%
16%
+1%
Cloud computing
8%
9%
17%
6%
+11%
5%
5%
0%
Other 3% 2%
Ranked 2
Year-end 2018
Ranked 1 or 2
Percentage of Automated Information Flows

Q02A/B. What percentage of your manufacturing organization's information flows in production are automated Today? By year-end
2018?
n=119
Automation of Production Data and Information

90%+
DK
DK
4%
3%
3%
90%+
<25%
26%
40%
are currently
at least half
automated
By year-end
2018,
75-90%
77%
15%
expect to be
at least half
automated
Today
<25%
3%
25-50%
17%
50-75%
75-90%
21%
27%
17%
Year-end
2018
50-75%
25-50%
31%
10
33%
Center of Excellence, Employees

Q19. Which of these best describes the organization that installs and supports the Manufacturing Execution Systems in your
organization? Q20. How many employees are assigned to your MES Center of Excellence full-time?
n=116; Excluding 'Don't know'
Operational
CoE
7%
MES CoE Employees
IT
CoE
7%
Formal Mfg
CoE
12%
n=48; Base: Organizations with MES CoE
1-4
23%
MES CoE
41%
5-10
46%
11-25
23%
No CoE
28%
26-50
11
8%
Majority
have 5
or more
Avg. 12
employees
Value from MES

Q16. To what extent do you agree or disagree with each of the following statements about your organizations Manufacturing Execution Systems?
n=119
Average Rating
1-2 rating
Satisfied with the longer term
benefits of MES
7%
Continuing to invest in MES

project
10%
Getting moneys worth from

MES
10%
Satisfied with the short term

benefits of MES
9%
Reduce cost of deploying the

MES at each phase of project
3-5 rating
39%
1. Strongly
Disagree
12
Don't know
51%
34%
12%
6-7 rating
3%
50%
43%
56%
47%
6%
42%
5%
2%
33%
33%
7. Strongly
Agree
8%
Overall
Value
Average
2015
2014
N=119
N=112
Change
5.3
+0.3
5.3
4.9
+0.4
4.9
4.5
+0.4
4.8
4.5
+0.3
4.7
4.4
+0.3
5.0
4.66
MES Success Criteria

Q09. Which of the following Manufacturing Execution System success criteria does your organization use?
Ranked 1, 2 or 3
n=119
Ranked 1
*44%
+3%
45%
48%
-3%
41%
35%
+6%
10%
27%
34%
-7%
4%
24%
24%
10%
23%
16%
+7%
3%
20%
12%
+8%
18%
8%
11%
Stability, security, and maintainability of MES
3%
13%
19%
9%
Increasing employee productivity
9%
10%
14%
12%
Increasing net operating profit
10%
7%
Responsiveness to demand
10%
3% 5%
18%
27%
-9%
9%
17%
11%
- 6%
12%
25%
-13%
11%
13%
-2%
Adoption of MES application by user base

Improving factory flexibility
Decreasing time to implement changes
5%
3%
3% 3%
2%3%
6%
6%
Adhering to program budget
3% 3%
6%
4%
+2%
Increasing market share
3% 1%
4%
2%
+2%
*Slight wording difference between years

13
47%
16%
11%
Reducing operational costs (COPQ)
2014 Change
N=112
12%
Increasing product quality
2015
Ranked 3
N=119
18%
MES data for continuous improvement programs
Achievement of performance standards
Ranked 2
MES Biggest Obstacles

Q10. Which of the following factors have been the biggest obstacles to success with your organizations Manufacturing Execution System strategy?
n=119
Ranked 1, 2 or 3
2015
2014
N=119
N=112
Change
50%
39%
11%
42%
40%
2%
31%
34%
-3%
28%
28%
0%
26%
33%
-7%
25%
22%
3%
24%
21%
3%
22%
18%
4%
16%
12%
4%
14%
*14%
6%
12%
13%
-1%
8% 3%
11%
12%
-1%
Ranked 1
Ranked 2
Cost, business case or ROI not properly understood
30%
Ability of MES to meet all functional requirements
7%
Competition with other IT projects
8%
Agreement on common processes
6%
Cultural buy-in
8%
Executive buy-in
7%
Technical issues
8%
Inability to leverage MES data for continuous improvement 2% 5%

Adoption of software by user base 2%4%
14
*Slight wording difference
8%
11%
13%
12%
5%
Vendor implementation resource availability and quality 3% 6%
Third-party implementation resource availability, quality
14%
22%
Internal resourcing and personnel issues
8%
15%
11%
11%
3%
7%
7%
6%
6%
11%
Ranked 3
12%
6%
MES Achievement of Business Case 2015, 2014

Q15. Thinking back to your organizations original business case for Manufacturing Execution Systems, what proportion of the
intended business results have been achieved?
n=97; Excluding 'Don't know'
2015 vs. 2014
> 100%
90% - 100% 4%
7%
2014 n=93 Excluding 'Don't know'
< 50%
31%
75% 90%
21%
29%
37%
50% to less than 75%
2015
*Average 59%
50% - 75%
37%
*Calculated using the midpoint of the ranges
21%
21%

15
25%
31%
Less than 50%
100% (or more)
4%
7%
4%
4%
2014,
*avg. 59%
2015,
*avg. 59%
Achievement of Results (75%+) by Business Criteria

Q15. Thinking back to your organizations original business case for Manufacturing Execution Systems, what proportion of the intended business
results have been achieved? Excluding DK
Q07. How important were each of the following business criteria in your organizations justification to invest in Manufacturing Execution Systems?
n=119
Top MES Business Priorities

(Rated 6 or 7 on a 7-point scale)
75%+ of Business Goals

Met (n=31)
Enforcing standard processes/best practices

across the manufacturing network *
Increasing visibility across the manufacturing

network *
Improving quality
Improving employee decision making and

competency*
16
84%
Orgs with 75%+

original MES
business results met
were statistically
more likely to have
these business
priorities than those
with lower % met
74%
71%
61%
*Statistically significant difference.
Note: Small sample size.

Only 60% or higher agreement of priorities shown in graph.
Achievement of Results by Criteria (Full list)

Q07. How important were each of the following business criteria in your organizations justification to invest in Manufacturing Execution Systems? Rating on a 1-7 scale
Q15. Thinking back to your organizations original business case for Manufacturing Execution Systems, what proportion of the intended business results have been
achieved? Excluding DK
Orgs who have met less than 50% of their original goals might be hung up on regulatory
compliance (60%).
% MET ORIGINAL BUSINESS CASE
Top two box (rated important at a 6 or 7 on a 1-7 scale)

Enforcing standard processes/best practices across the
manufacturing network
Increasing visibility across the manufacturing network
Improving employee decision making and competency
Improving quality
Reducing cycle times/lead times
Reducing reporting latency
Reducing direct labor costs
Regulatory compliance
Improving unit margin
Improving inventory and cash flow
Increasing asset utilization
Customer retention/growth
Modernizing IT
Improving Market Share
Expanding markets/segments
17
N=119
n=31
n=36
n=30
Total
75%+ Met
50%-<75% Met
<50% Met
66%
84%*
56%
47%
56%
50%
69%
54%
46%
35%
45%
39%
46%
42%
24%
25%
14%
11%
74%*
61% *
71%
58%
58%
42%
42%
42%
39%
35%
23%
16%
13%
13%
58%
53%
64%
56%
47%
33%
47%
39%
53%
47%
31%
19%
22%
17%
50%
37%
73%
40%
37%
43%
60%
33%
43%
43%
30%
37%
13%
7%
* Statistically significant
Note: Small sample sizes.
MES Initial Business Criteria

n=119
1-2 rating
Improving quality 2%
Enforcing standard processes/ best
practices across mfg network
6%
Increasing visibility across mfg network
7%
Reducing cycle times/lead times
29%
5%
Improving employee decision making and

4%
competency
Increasing asset utilization
8%
5%
1. Not at all
important
18
3-5 rating
6-7 rating
5.9
69%
29%
5.6
66%
37%
5.4
56%
41%
54%
46%
45%
53%
Average
rating
5.3
5.3
50%
46%
5.2
42%
5.1
7. Extremely
important
MES Initial Business Criteria, cont.

n=119
1-2 rating
10%
14%
39%
13%
42%
Reducing direct labor costs
13%
Modernizing IT
13%
33%
33%
1. Not at all
important
4.9
46%
4.8
45%
35%
62%
Improving Market Share
4.9
39%
51%
30%
Average
rating
6-7 rating
51%
Improving inventory and cash flow
Customer retention/growth
19
3-5 rating
4.6
4.3
25%
46%
24%
53%
56%
3.9
14%
11%
7. Extremely
important
3.5
3.5
Added text box
MES Business Benefits Timescale

Q08. Typically, over what time scale have each of the following benefits been realized by your organization following investment in Manufacturing
Execution Systems?
n=119
Immediately
Within one month
Within 3 months
Within 12 months
Longer than 12 months
Increasing visibility across mfg network
13%
13%
22%
12%
13%
24%
Modernizing IT
10% 6%
16%
8% 8%
18%
Enforcing standard processes/best practices across mfg network
8% 13%
Improving quality
8% 11%
27%
24%
Improving inventory and cash flow 2%

4% 8%

2%
3% 10%
4% 13%
Increasing asset utilization 6%
20
24%
4% 10%
17% 2% 13%
28%
15% 3% 13%
23%
30%
3%11%
6%
22%
42%
10%
11%
32%
19%
41%
25%
29%
27%
8%
13%
28%
20%
Reducing direct labor costs 6% 13%
24%
28%
36%
25%
23%
6%
34%
Customer retention/growth 1%
2% 5% 18%
Improving Market Share 2% 13%
18%
15%
23%
10%3% 13%
14% 7%
18%
Not applicable
17% 3% 11%
25%
24%
27%
Improving employee decision making and competency 4% 10%

Reducing cycle times/lead times 3%8%
22%
Not at all
22%
41%
18%
27%
8%
3%
16%
24%
Top initial
reasons to
invest realized
within 12
months by a
majority.
Over a third
saw results
within 3
months.
(See next
slide for more
details)
Benefits Timescale Met in 3 Months, 12 Months

Q08. Typically, over what time scale have each of the following benefits been realized by your organization following investment in Manufacturing
Execution Systems?
n=119 Base: Excluding Not Applicable and Not at all
Met in 0-3 months

Reducing reporting latency n=100
Met in 0-12 months
58%
Enforcing standard processes/best practices across n=102
55%
Increasing visibility across mfg network n=102
55%
88%
73%
80%
Improving employee decision making/competency n=100
49%
82%
Improving quality n=102
48%
80%
Regulatory compliance n=83
48%
Modernizing IT n=84
45%
Reducing cycle times/lead times n=103

Increasing asset utilization n=91
26%
63%
63%
19%
69%
15%
12%
Improving Market Share n=54 4%
Note: Does not include Not applicable or Not at all responses

76%
22%
Improving inventory and cash flow n=86
21
78%
34%
Improving unit margin n=51
Expanding markets/segments n=57
80%
39%
Reducing direct labor costs n=87
Customer retention/growth n=61
75%
51%
39%
33%
Manufacturing Application Strategy 2015, 2014

Q03. Which of the following best describes your organizations strategy for manufacturing applications?
2015
2014
n=119
n=112
IT attempts to
fulfill business
unit requests
as they arise
7%
IT projects are
prioritized in a
portfolio
management
process
based on
available
funding and
ROI
45%
22
Formal application
strategy is developed
based on the business
strategy and a desired
future state of
business capabilities
28%
Formal application strategy

is developed with the goal
of improving the application
architecture while fulfilling
the business requests
21%
IT projects are
prioritized in a
portfolio
management
process
based on
available
funding and
ROI
27%
IT attempts to
fulfill business
unit requests
as they arise
12%
Formal application
strategy is developed
based on the business
strategy and a desired
future state of
business capabilities
29%
Formal application strategy is

developed with the goal of
improving the application
architecture while fulfilling the
business requests
33%
MES Provider 2015 and 2014

Q04. Which of the following best describes the provider of your organization's manufacturing execution system?
2015
2014
n=119
n=112
Best of Breed MES provider
50%
ERP provider
19%
Module or application from an

automation provider or
controls/DCS/SCADA provider
PLM vendor
Other
23
17%
2%
Best of Breed MES provider
ERP provider
17%
Module or application from

automation and
controls/DCS/SCADA
17%
PLM vendor
13%
52%
Other
2%
13%
MES System Selection 2015 and 2014

Q18. Which of these best describes the business case and system selection for Manufacturing Execution Systems in your org?
Plants
expected
to
impleme
nt corp
standard
45%
24
2015
2014
n=119
n=112
Plants select
individually
20%
Plants
can opt
in to corp
standard
34%
Plants
expected
to
implement
corp
standard
38%
Plants select
individually
22%
Plants
can opt
in to corp
standard
40%
Enterprise vs. Point Solution 2015 and 2014

Q05. Was your organizations MES evaluated and selected as a point solution or as an enterprise application?
2015
n=110; Excluding 8% 'Don't know'
Point solution
32%
Enterprise
application
68%
25
2014
n=99; Excluding 12% 'Don't know'
Enterprise
application
65%
Point solution
35%
Number of MES Sites 2015 and 2014

Q11. On how many individual sites is your organizations Manufacturing Execution System deployed?
2015
2014
n=119
n=112
10 or more
24%
47% on
5+ sites
5-9 sites
23%
26
1 site
19%
2 sites
14%
3-4 sites
19%
46% on
5+ sites
10 or more
28%
5-9 sites
18%
1 site
19%
2 sites
13%
3-4 sites
23%
MES Deployment Time Initial, Additional

Q12/Q13. How long did it take your organization to complete its first Manufacturing Execution System deployment? How long did it
take your organization to complete, on average, additional Manufacturing Execution System deployments?
Base: Excluding 'Don't know'
Less than 3 months
4%
6%
3 months to less than 6 months
6%
23%
17%
18%
24%
25%
18%
13%
7%
16%
1%
*Base: Deployment on more than one site (Q11)

27
Average
(using midpoint
of ranges)
15 months
21%
24 months or more
First Manufacturing
Execution System
deployment, n=104
Additional
Manufacturing
Execution System
deployments*, n=84
Average
(using midpoint
of ranges)
10 months
Deployment Model for MES

14A/B. Which of the following best describes the primary model your organization uses to deploy MES applications today? Which of
the following best describes the primary model you expect your organization to use for MES applications by year-end 2018?
n=119
Today
Year-end 2018
Hybrid cloud, 5%
On premise,
centralized
deployment
38%
On premise for
each site
53%
28
Public cloud
3%
Dont know
2%
Hybrid cloud
23%
On
premise,
centralized
deployme
nt
47%
On premise for
each site
23%
Public cloud
3%
Dont know
4%
Methodology, Respondent Profile
29
Respondent Profile Decision-making, Group in Org

S02. What role(s) do you have in relation to Manufacturing Execution Systems (MES) within your organization?
S03. Which of the following best describes the group within your organization in which you reside? Single response
n=119
MES Decision-making
Responsibility
Group within Organization
Part of team that

makes decisions
76%
IT
(manufacturing
or corporate)
45%
Provide input to
decision makers
Make the final

decision(s)
54%
15%
Multiple responses allowed

30
Other
5%
Line of
Business
(Mfg)
23%
Hybrid Line of
Business/IT role
27%
Methodology Record
Results are based on a Gartner study conducted September 9, 2015 through October 5, 2015 with the
members and contacts of MESA International (Manufacturing Enterprise Solutions Association).

This is the fourth year the study has been fielded with this association.
119 IT and business leaders at MES-user companies in the US participated. Participants were screened
to be in manufacturing industries, have an MES system and to have a role in decisions related to MES.
The purpose of the study was to assess if, and to what extent, MES applications are delivering ROI and
creating value for companies in the manufacturing industry. And specifically to identify the characteristics
of organizations maximizing the value and returns on their MES investments.
The survey was developed collaboratively by a team of Gartner analysts who follow Supply Chain and
was reviewed, tested and administered by Gartner's Research Data Analytics team.
31

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A-15609 2015 MESA/Gartner

Business Value of MES Survey

CONFIDENTIAL AND PROPRIETARY

2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Project Summary Study Objectives

Respondent Profile Industry

Life Sciences Mfg (Pharma, Biotech)

High Tech Mfg

Rolled Goods/Industrial Process Mfg

Medical Device Mfg

Chem/Specialty Chem Mfg

Respondent Profile Decision-making, Group in Org

Group within Organization

Part of team that

Make the final

Multiple responses allowed

IT Trends Important to MES Architecture Today

Supply chain collaboration

The Internet of Things (IoT)

Cloud computing 3%3%

IT Trends Important to MES Architecture 2018

Master data management (MDM)

Percentage of Automated Information Flows

Automation of Production Data and Information

Center of Excellence, Employees

MES CoE Employees

n=48; Base: Organizations with MES CoE

Value from MES

Continuing to invest in MES

Getting moneys worth from

Satisfied with the short term

Reduce cost of deploying the

MES Success Criteria

Stability, security, and maintainability of MES

Increasing employee productivity

Increasing net operating profit

Adoption of MES application by user base

Adhering to program budget

Increasing market share

*Slight wording difference between years

Reducing operational costs (COPQ)

Increasing product quality

MES data for continuous improvement programs

Achievement of performance standards

MES Biggest Obstacles

Cost, business case or ROI not properly understood

Ability of MES to meet all functional requirements

Competition with other IT projects

Agreement on common processes

Inability to leverage MES data for continuous improvement 2% 5%

*Slight wording difference

Vendor implementation resource availability and quality 3% 6%

Third-party implementation resource availability, quality

Internal resourcing and personnel issues

MES Achievement of Business Case 2015, 2014

2015 vs. 2014

2014 n=93 Excluding 'Don't know'

50% to less than 75%

75% to less than 90%

Less than 50%