Manufacturing Execution Systems in the Medical Equipment Technology IndustryAchieving and maintaining high performance in manufacturing in a fast-changing and highly competitive environment

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ContentsIntroduction: manufacturing challenges in a fast-changing world 3

The value of Manufacturing Execution Systems in the MET Industry 3

Integration scenarios with SAP systems 7

Conclusion 11

Around the globe, manufacturing companies face a rapidly changing business environment. They have to cope with rising levels of competition, more complex supply chains arising from globalization, increasingly stringent regulations, and ongoing changes in demand. The Medical Equipment Technology (MET) industry is no exception.

In recent years, significant efforts and investment to improve back office and operations support functions, such as order entry or planning, have helped move companies up the ladder of high performance. However, there has been too little attention paid to plant operations, even though outstanding execution of production processes is essential for companies to guarantee high quality,

ensure regulatory compliance, drive high levels of productivity and reduce both time-to-production and time-to-market.

Technology today enables plant operations management to gain access to more precise information than ever before, based on data collected directly from the shop floor level. This detailed data can be used to provide an integrated view of operations, thereby enabling faster decision-making and more accurate predictions.

The information and communication systems for a company’s production environment, collectively called its Manufacturing Execution System (MES), bridge the gap between a manufacturing enterprise’s business system processes (periodic transaction-based) and its

Introduction: manufacturing challenges in a fast-changing world

plant-floor processes (real-time). When working effectively, the MES provides visibility across the enterprise, enabling high performing companies to differentiate themselves at the core of their operations.

In this point-of-view paper, we examine the value and benefits that medical equipment technology companies can gain from an MES that is applied locally and harmonized globally. The paper focuses mainly on the area of discrete manufacturing processes for medical instruments, consumables and reagents, and therefore covers only some parts of what we define as the MET industry as a whole: Diagnostic imaging, Healthcare IT, Remote Patient Monitoring/mHealth, Consumer Healthcare and Other Diagnostics (in-vitro).

Today, many manufacturing systems in the MET Industry tend to work in silos within plants, and most manufacturing systems are not internationally harmonized, which negatively affects manufacturing performance.

Manufacturing Execution Systems (MES) integrate information systems on the plant floor with the overall enterprise. They enable companies to improve manufacturing processes, enforce quality and regulatory compliance and shorten time-to-production and time-to-market.

The Value of Manufacturing Execution Systems in the MET Industry For many areas within any company, paper-based processes have been consigned very firmly to the past. Companies in the MET industry realized at an early stage that electronic systems can boost efficiency and reduce costs. On the shop floor, however, manufacturing and quality management processes are still widely handled with paper processes. If manufacturing systems are being used, they tend to work in silos within plants, so that manufacturing is disconnected from the rest of the business. Furthermore, production facilities in many cases have several, non-integrated information systems in place that are not harmonized throughout the entire organization. The result is that manufacturing systems in international companies’ plants are often isolated from one another. This makes it difficult to coordinate activities and manage manufacturing performance, as well as making it harder to handle regulatory compliance issues across the enterprise.

To meet the challenges of a globalized world in an industry characterized by a high level of competition, intensifying cost and price pressures, escalating M&A activity and ever-increasing regulations, the MET industry needs to shift its focus away from isolated plant control systems and towards integrated and globally harmonized solutions. Manufacturing Execution Systems, which integrate information systems on the plant floor with the overall enterprise – thereby bridging the information gap between plant floor operational technology, plant-level planning, logistics systems and enterprise level decision-making – can help MET companies to achieve high performance. Designed as dynamic information and communication systems, they provide critical information about production activities and allow MET companies to improve manufacturing processes, enforce quality and regulatory compliance, and shorten time-to-production and time-to-market. Whether deployed by an international multi-billion dollar company, a mid-sized manufacturer, a start-up, or any other organization in the MET industry, an MES can make a considerable contribution to business success.

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Definition of MESUnder the definition applied by the leading standard ANSI/ISA-95, MES can be seen as the translation layer between business planning & logistics and operation & process control.

MESA, the Manufacturing Enterprise Solutions Association, founded by leading Manufacturing Execution Systems (MES) vendors and system integrators defined eight major functions for collaborative Manufacturing Execution Systems1.

1. Resource Allocation and Status

2. Dispatching Production Units

3. Data Collection/Acquisition

4. Labor/User Management

5. Quality Management

6. Product Tracking & Genealogy

7. Performance Analysis

8. Process Management

In earlier times MES vendors focused primarily on production operations while nowadays MES products cover maintenance and inventory operations as well as quality related production steps.

This expanded scope is classified as Manufacturing Operations Management (MOM).

1MESA (2004); White paper 8 “MESA’s Next Generation Collaborative MES Model” and white paper 9 “Collaborative Manufacturing Explained”.

CMMS WMS

LIMS

MES

CRM HRM

PLM SCM

ERP

SCADA DCS PLC HMI

Order status WIP Status Quality Status Build History

Operation/ Job Status Machines/ Operator Status Process Values

Equipment People Devices

Cont

rol P

aram

eter

s O

pera

tor I

nstr

ucrt

ions

Wor

d O

rder

W

ork

inst

ruct

ions

Real

-Tim

e 1x

Perio

deic

Tra

nsac

tion

base

d 10

0x

10x

Tim

e Fa

ctor

Level 4: Enterprise Process

CRM: Customer Relationship Mgmt HRM: Human Resources Mgmt PLM: Product Lifecycle Mgmt SCM: Supply Chain Mgmt ERP: Enterprise Resources Mgmt

Level 3: Manufacturing Operations

LIMS: Laboratory Information Management System WMS: Warehouse Management System CMMS: Computerized Maintenance Management System MES: Manufacturing Execution System

Level 2-0: Automation/Connectivity, Shop Floor Process Control

SCADA: Supervisory Control And Data Aquisition DCS: Distribution Control Systems PLC: Programmable Logic Controller HMI: Human machine Interface

Figure 1: Manufacturing Execution System – Functional Hierarchy within Industrial IT

StandardsUsing concepts and terminology drawn from standards such as ISA88 or ISA95 helps companies to write well-structured documents in standardized language. The ISA88 model provides more detailed levels (equipment modules and control modules), whereas the ISA95 model provides extended terminology for continuous, discrete, and storage processes. The standards differ in terms of their purpose, with the result that MET companies will increasingly make use of both standards. ISA88 will be used according to Accenture best practice for automating the control of machines and devices, and ISA95 for the exchange of information between ERP and MES systems. When developing a system for electronic batch records, ISA-88 Part 4 provides meaningful help as it standardizes the information within batch production records.

Source: Scholten, Bianca (2007)

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Benefits of MES in local manufacturingAt the local plant level, an MES delivers various benefits, whether in the manufacturing of medical instruments, consumables or disposables. Manufacturing medical instruments involves a fairly complex assembly process including a series of production steps, requiring extensive data collection and component tracking. For the production of consumables or reagents, the process is especially complex and includes several highly sensitive steps. For example, the the production process for reagents for hematology not only includes the production of preliminary products such as high-purity water and the reagents themselves, but also ongoing sampling, quality control and documentation and filing of reagents. In both cases, an MES can help companies to improve their performance.

The benefits delivered by an MES along an MET company’s supply chain processes depend to a large extent on the selected software, and arise mainly in the following three areas:

Benefits during Manufacturing Execution Management:

• The purpose of shop-floor control functions is to support operators and supervisors in managing their workload for the production lines. When all production operations are completed, an MES enables supervisors to verify production parameters, material flow consistency and accounting data. Subsequently, supervisors perform the work order closure and the relevant data cannot be modified further.

•Being able to track individual parts with precision during the manufacturing process is very important in the MET industry. This is also the case with regard to regulatory compliance, especially when it comes to components that are considered as critical. An MES improves component traceability by providing immediate access to batch records and information for every component within a work order. It also helps to avoid mistakes in batch records that could lead to time-consuming investigations.

•An MES eliminates record-keeping errors and helps to gather information for reporting by keeping track of every step in the manufacturing process. By facilitating the routine documentation required when manufacturing medical devices and disposables, and ensuring that all manufacturing and process data is continually collected, an MES can considerably reduce the risks arising from regulatory compliance.

• In providing near real-time shop floor data, an MES helps to optimize production, supports management decision-making, and enables alignment between production execution and production planning capabilities. It also increases productivity, shortens the inventory cycle and eliminates the burdens and costs of non-integrated and non-harmonized systems.

•Whether updating a current medical device or launching an entirely new product, an MES can save considerable time and costs, for example by establishing consistent manufacturing processes across sites.

Quality control and non-conformity handling:

•An MES enforces adherence to the correct procedures and quality systems throughout the entire manufacturing process, while also considerably improving the ability to detect and react to production problems early in the process by enabling enhanced Quality Management. Ensuring that appropriate corrective actions are taken may prevent expensive disruptions owing to violations of quality requirements, which are especially strict in the MET industry.

Batch review and release process:

•At the time of batch disposition, all relevant data collected during production operations is submitted for the final release process. The supervisor is able to access production data, analysis results and investigation data on any deviations.

• Electronic GMP (good manufacturing practice) checks and mass approval functionalities can be applied if all GMPs were performed successfully.

• Inclusion of documents from the Laboratory Information Management Systems (LIMS) in the Batch Record Electronic check-list to support the QA operation.

•All batch record documentation is available in electronic format at the click of a button, and the costs of archiving large amounts of paper records can be significantly reduced.

…and globallyWhile these local improvements in manufacturing performance are the more obvious benefits, others that can be realized through a strategic, global approach to MES should not be underestimated. A globally harmonized manufacturing strategy, which includes process standardization, may enhance supply chain performance and improve efficiency across multiple sites.

Accenture’s industry insights indicate that the ability to execute large mergers and acquisitions effectively is a fundamental aspect of high performance businesses in the MET industry2. Considerable gains might be realized in the long run when implementing a globally harmonized MES across all manufacturing sites. Globally harmonized systems are also particularly critical in the MET industry because they ensure that local healthcare regulations are met globally.

As Figure 2 illustrates, efficiency gains and cost reductions are the first benefits to be realized by implementing an MES. Significant benefits may also arise from process improvement and supply chain gains in the medium term.

In a market characterized by intense competition, strong cost and price pressures and extensive regulation, MET companies need to manufacture their products better, faster and cheaper than their competitors, while simultaneously complying more effectively with regulations. An efficient, integrated and globally harmonized MES can help companies to outperform their competitors in the long term. Yet, many companies in the MET industry have not realized these benefits and very few have implemented a globally harmonized MES. The following section will show possible integration approaches with SAP-ECC systems.

2 Accenture (2011): High Perfomance Study - Reinventing Medical Technology for a Dramatically Different Future http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Med-Tech-HPB-Research-2011-Final.pdf

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Figure 2: MES ROI and Benefits Realization

There is no doubt that an MES can deliver the advantage of consolidated, structured real-time information to the MET manufacturing shop floor (see Figure 2). However, much more than that, MES can significantly increase the ability of MET businesses to achieve effective communication between their technical systems and the SAP level, and provide better-structured and more visual display of machine-related and technical information to support operational control on the shop-floor.

Thorough integration of ERP and MES is key to maximizing the benefits of MES, by enabling greater visibility into MET production functions for business planning and logistics through the delivery of consistent data that is provided quickly and efficiently.

Integration scenarios with SAP systems

Global design across layers and processes/modulesMany functionalities overlap and integrate between the MES and the SAP ERP solution. The integration scenario always depends on the MES solution that has been selected.

Accenture’s experience suggests that by eliminating data redundancies and implementing thorough integration, MET companies can achieve substantial further synergies and performance improvements.

When implementing an MES, it is important to take into account that a substantial proportion of the functionalities between an MES and SAP overlap and integrate (see figure 3). Thus, in an environment where an MES and SAP run in parallel without an integrated approach, the same process is likely to be handled twice in the MES and in SAP. This duplication is shown in Figure 3.

Supply Chain Gains Process ImprovementsEfficiency Gains/Cost Reductions

Supports collaboration and supply chain visibility Acts as platform for continous improvement

Reduce indirect labor costs Shorten cycle/flow times Improve quality/reduce process/product variability

Lower WIP and FG inventoryReduced waste/scrap/materialsReduced compliance costReduced reworkReduced IT total cost of ownership

Most projects justified on these measures

These are site level benefits. As MES deployments scale across multiple sites this level of benefit can be acheived more rapidly due to acquired deployment proficiency

Benefit

Time Frame After Go-Live

Valu

e of

Ben

efit

s

Three to 12 months 12 to 36 months Three-plus years

10x

3x

1x

Potential Benefits Ceiling

MES contributes to larger payback acheived through continous improvement efforts across manufacturing network, not just at sites

Site

2

Site

3, 4

, 5

Site

6+

Site

1

Site

2

Site

3, 4

, 5

Site

6+

Site

1Accelerated time to market Increased capacity Improved tracebility/genealogy/containment MES supports common processes across sites Reduction in production reporting latencies

Source: Gartner; Simon F Jacobson (2011): Justify Globally and Act Locally to Get ROI and Long-Term Value from Your MES

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Level 4

Level 3

Level 2

Level 1

Level 5

SAP

SAP

These overlapping functions need to be reviewed to see where each process step should be handled in order to provide the correct level of information in the right place at the right time:

• Transport / warehouse management - material flows: Where material flows are managed – posting of goods’ receipts and issues, with or without mobile devices, both on the general level of storage locations or in greater detail indicating specific bins and storage type.

•Product costing: The reference for each element of the calculation must be clearly identified and considered throughout design of ERP (PP, CO), Manufacturing operations (Layer 3) and Shop Floor Processes (Layer 2-0).

•Production Scheduling and management of production (confirmation of orders/ production results): In which system production is scheduled in which detail – define sequencing and scheduling of whole orders or separate steps in each order; also where the production is managed – confirmations of operations and orders to be posted in SAP or through an interface.

Figure 3: Functionality Overlap of MES and SAP

•Quality management (quality control results): How and where test results are recorded – manual entry or interface from laboratory or production equipment, the amount of data collected, and the reporting processes.

The capabilities for integration depend on which ERP and MES solutions are selected. Drawing on Accenture’s experience, a number of possible scenarios are shown in figure 4 based on SAP as the ERP solution. As the diagram shows, there are three main models for the design of the overall system landscape.

Industry-specific requirements and external regulations with impact on the integration modelAlongside the type of MES being integrated, industry-specific requirements and external regulations will also have an impact on the integration model for manufacturing operations. These factors need to be considered carefully in many areas. Examples include:

•Electronic Batch Record: The replacement of the manual batch record with an electronic version will increase the complexity of integration flows between ERP and MES.

•CFR 21 part 11: GxP compliance plays a decisive role in data acquisition and validation. Accuracy and clarity of data, as well as consistent change documents are crucial for regulatory compliance.

•Drug serialization: Emerging regulatory requirements require the establishment of new operational processes and technical platforms to initiate, capture and manage serialization information at additional packaging levels on packaging lines and in distribution centers

•Planning & product costing integration: MES exchanges with ERP inputs and data necessary to complement business and logistic processes. Manufacturing execution master data as Routing, BOM, require accurate designs to be consistent with ERP data and guarantee accuracy of planning and product costing processes

•External Manufacturing: Increasing trend towards external manufacturing demands a focus on analytics and data sharing with partners. In order to have suppliers working in unison, real time information must be exchanged to ensure full visibility of costs/quality problems and supplier performance analysis.

OverlappingCapabilities

Functional determination required

MES MES

Demand Management Demand Management

Scheduling/Sequencing Scheduling/Sequencing

Sales Order Management Sales Order Management

Quality Management Quality Management

Production Flow Planning Production Flow Planning

Capacity Planning Capacity Planning

Production Execution Production Execution

Master Planning Master Planning

Distribution/Shipping Distribution/Shipping

Transport Management Transport Management

Process Control Process Control

Warehouse Management Warehouse Management

Machine Control Machine Control

Material Management Material Management

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Description Usage/Evaluation

SAP

for

exec

utio

n –

glob

al in

stan

ce

Central approach with global SAP system, running execution processes through central SAP instances

Usage:

• Limited need for high integration between execution system and automation layer.

• The emerging trend of having global system (instances) fosters further integration throughout system levels.

Pro:

•Process standardization

• Less resources for system maintenance

•Common reporting on production steps

Cons:

•Central coordination for MES evolution – less flexibility

•Connection complexity (level 2-3)

• Limited or no window for shutdown periods for system maintenance

Lean

MES

– m

ixed

Mixed approach Usage:

•Clear handover between logistics/warehouse and production execution.

• Important investments into existing solutions need to be leveraged (e.g. SAP WM).

•No special need to support full stock traceability in the shop floor out of the SAP-ECC system.

The Pros and Cons from the model below and above apply depending on the implementation.

Bold

MES

– lo

cal i

nsta

nce

Selected MES packages run at local level, production execution processes interface with central SAP instance

Usage:

•Production types and processes are not homogeneous across the manufacturing site.

• There are a high number of local requirements.

Pros:

• Easier MES system evolution

• Easier progressive roll-outs

Cons:

•More specific (local) development

• Increased connection complexity on SAP site.

EnterpriseSystems

EnterpriseSystems

EnterpriseSystems

ExecutionSystems

ExecutionSystems

ExecutionSystems

Automation layer

Automation layer

Automation layer

Level 2 Control

Level 2 Control

Level 2 Control

Level 3 Operations

Level 3 Operations

Level 3 Operations

Level 4 Business Planning

Level 4 Business Planning

Level 4 Business Planning

Figure 4: Integration scenarios with SAP system

SAP

SAP

SAP

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Figure 5: Different options for the technical integration from Shop Floor Data Sources up to SAP-ECC

Leve

l 4

SAP ECC BAPI, RFC, Idocs(Standard and Custom)

Enterprise Services

Process Integrator

SAP MIISAP

MEINT

Leve

l 3

SAP ME

PCo

Manufacturing Execution System (MES)

Leve

l 0-2

Shop Floor Data Sources

Integration based on ISA - 88

Integration based on ISA - 95

WM PP PPPI PM MM SD APO QM

Web Service

Link process between plants and technical levelsManufacturers are competing more and more as supply chains instead of as individual companies. MESA International3 defines collaborate manufacturing as “A strategy by which all appropriate individuals and organizations - both internal and external to the legal enterprise - work together”. The main goal of this strategy is to optimize supply chain processes and provide adequate information for better decisions.

This integration requires the identification of possible links between plants and technical levels in the most efficient way to realize collaborative production management through an integrated data model. In the integrated data model, information is based on consistent metrics and KPIs at all levels of the organization. This starts with the data collected on the shop-floor, ensuring that all involved decision-makers can use the same basic information aggregated to the appropriate level. This data provides enhanced transparency for better decision-making at all levels of the organization, and also increases the overall efficiency of the supply chain by providing more accurate information.

Technical IntegrationThe different options for the technical integration from Shop Floor Data Sources (Level 0-2) up to SAP-ECC (Level 4) are illustrated in Figure 5.

Leading MES vendors – such as Apriso, Camstar and Werum – provide an interface that is able to communicate directly with the SAP business suite, for example via SAP Process Integration (PI) using IDocs and Business Application Programming Interfaces (BAPI). SAP Manufacturing Integration Intelligence (MII) is optional, for example to enrich reporting functionality, but is not essential for the exchange of master and transactional data between third party MES systems and SAP-ECC.

For the integration of SAP Manufacturing Execution (SAP ME), however, the use of SAP MII is best practice by SAP. SAP ME and the SAP MII component communicate via Web Service and the SAP MEINT (ME Integration - part of MII) is the transactional component between web services and IDocs/BAPI. Other than that, some companies also have their own, custom-developed, interfacing middleware to connect the ERP landscape with lower-level software.

To further facilitate technical integration, SAP has recently released the SAP Plant Connectivity (PCo) tool. This basic software component allows for data exchange between SAP-Systems (SAP (E)WM, SAP ME and SAP MII) and industry-sector-specific data sources based on agents. It can be configured for one or more locations, and sends alerts based on real-time actions on the shop floor, executes queries within shop floor systems, and provides active and remote monitoring in case of data connection issues. Standardized software interfaces that are supported out of the box include OLE for process control, GE Fanuc Proficy Historian, OSIsoft PI, Socket, IP21, Citect and File Monitor-Agent. By using the Software Developer Kit (SDK), additional agents can be developed in order to support specialized data sources.

3MESA (2004); White paper 9 “Collaborative Manufacturing Explained”

Idoc, RFC, WebService Push

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ConclusionQuality, price and time to market have always been among the most important factors driving operational excellence in manufacturing. These critical factors can make the difference between keeping pace with competitors and losing market share. Future success and high performance in the MET industry depends on the ability to outperform competitors consistently in these strategic areas over the long term, together with the ability to handle the increasingly stringent regulations in the MET sphere.

Manufacturing Execution Systems can help MET companies to meet these challenges by linking plant control and enterprise systems. And their benefits are not limited to the local plant level: a strategic, global approach to MES may enhance supply chain performance and improve efficiency across multiple sites, thereby boosting success and resulting in high performance across the enterprise.

ReferencesAccenture (2006): Accenture Electronic Production Execution System – Enhancing Compliance and Performance in Pharmaceutical Production

Accenture (2009): Achieving High Performance with Manufacturing Execution Systems.

Accenture (2011): High Performance Study - Reinventing Medical Technology for a Dramatically Different Future.

Gartner; Simon F Jacobson (October 2011): Justify Globally and Act Locally to Get ROI and Long-Term Value from Your MES.ISA88 Batch Standards and User Resources, www.isa.org

Mesa (2004): MESA White Paper 8 - MESA’s Next Generation Collaborative MES Model; available online: https://services.mesa.org/ResourceLibrary/ShowResource/aacc4930-6c55-41fa-a597-22ccdded594d.

Mesa (2004): White Paper #09: Collaborative Manufacturing Explained; available online: https://services.mesa.org/ResourceLibrary/ShowResource/9fc12f9d-c082-4f6a-a1dd-65304a7e34bc

Scholten, Bianca (2007): Where Batch ends and integration begins, in: http://www.biancascholten.info/home/mainColumnParagraphs/01/text_files/file1/046%20Where%20Batch%20ends%20and%20Integration%20Begins.pdf

Scholten, Bianca (2007): Electronic Batch Records: speaking the same language, in: http://www.biancascholten.info/home/mainColumnParagraphs/01/text_files/file0/031%20Electronic%20Batch%20Records_speaking%20the%20same%20language.pdf

ContactsArmin Meißner Global Industry Managing Director Medical Equipment Technology +49 89 93081 68392

Burkard Schemmel Program Manager Medical Equipment Technology +49 30 89047 68705

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About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with 257,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.

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