Integration remains the big one

Times may not be easy for manufacturers today, but companies like Thales Acoustics and United Milk are finding ways to achieve massive improvements in performance, and to beat their competitors hands down – and it’s all down to choosing the right strategy up front, particularly for the development of their plant and shop floor IT systems. In developing that strategy, Carey Clements, product manager at process control systems company Honeywell POMS, says there should always be one overriding concern – and one that’s nothing to do with the technology itself. “First make sure you understand the business needs, and that any investment is lined up with your business imperatives.” This is crucial, because no one solution or strategy will be the right answer for everyone – the type of manufacturer, the existing plant, the business environment and the competition introduce too many variables. Andy Bates, practice leader for manufacturing business solutions with automation giant Rockwell Automation, says keeping a strategy on track is first and foremost about KPIs (key performance indicators). “Be very aware of what your company’s KPIs are, and make sure any strategy you adopt is in line with them – because they have been designed to make your company perform better.” It’s motherhood and apple pie stuff, but you also need to add to these, checking return on investment (ROI) – particularly in today’s economic climate. And that means asking vendors to demonstrate how their technology can deliver a return in your particular situation, says Bates. “Any specific implementation of strategy needs to show a payback in its own right,” says Bates. “Thus every time you do a project, ensure it has a value proposition, and then measure it – so everybody has a proof point.” The bottom line, according to Bates, is that “If you undertake a project that doesn’t pay back in a year then you’ve made a big mistake.” He points out that average ‘plant asset’ utilisation in European manufacturing industry is only about 50% today. “It’s very common to make a change of around 10%” – so getting payback shouldn’t be that difficult. While that seems like good news, manufacturers, consultants and vendors nevertheless agree that one strategy should take priority above all others. Colin Bravington UK business development manager at controls firm Omron, declares: “The three issues are integration, integration and integration. Business management has been run for far too long on soft numbers from manual systems – giving data that’s untimely and not particularly accurate.” Making the most of it? Integration means making the most of existing measurements, monitoring and control systems, using screen-based systems to improve the flow of data to and from shop floor operators, as well as major integration projects between MESs (manufacturing executions systems) and business systems. The ultimate goal is faster, more accurate data that leads to better responsiveness in decision-making, and hence greater flexibility throughout operations. Says Bravington: “You need information coming down from upper levels telling you what you’re planning to do next, so you can look at forward orders, for example, and also take into account quality and condition of a product – so you can make an informed decision on what to make on your machines next.” But integration of plant and shop floor controls and systems with business systems, and then back down again isn’t likely to be a short, sharp project yielding a quick payback. “The overriding strategy must be to actually have a series of projects in place,” explains Bravington. “One food manufacturer, for example, has installed a complete factory information network simply by adding extensions to the network every time they have automated or added a machine. By building it onto every project, they’ve achieved it without a demand for a big expenditure.” Sometimes, a big-bang approach can work. Integration has been fundamental to the economics of United Milk’s processing plant. A farmers’ co-operative, United Milk is setting up a plant that will process 850 million litres of milk per year, 5.5% of the UK’s milk production. Yet United Milk will be able to pay its suppliers, the dairy farmers, 1.3 pence per litre over the intervention price. “The reason it’s so efficient is because of its integrated systems,” says Simon Bragg, European research director for analyst ARC – systems that keep tabs, in real time, on everything that’s happening on the shop floor. “The LIMS (Laboratory Information Management System) is integrated with the MES system, so you know the fat, protein and moisture content of the pallets and hence their value. When you receive a customer specification for a certain quality and quantity, you want the minimum set of pallets that meet the specification, to maximise the value of your production.” Power of MES Another crucial figure that the integrated systems deliver on a daily basis is the mass balance and milk yield. “Plants with paper systems usually take a week to produce the mass balance,” says Bragg. “If you can do it at the end of every shift, you can see what’s gone wrong and have six days’ lead on the opposition to correct the fault.” United Milk did have the advantage of starting with a greenfield site. Nevertheless, according to Bragg, “The value of the integration is looking like it will give payback within a year.” Meanwhile, at Thales Acoustics, manufacturer of professional-user audio ancillaries, senior production engineer David Poulten also expects several successes achieved through, or with the help of, integration of shop floor data. “The information collected via the Kronos SFDC (shopfloor data collection) system will be passed to the MRP system, which will enable the use of materials to be tracked much more accurately, and lead to reduced stockholding,” he explains. “It will also enable the sales department to track the progress of a customer’s order through the manufacturing process much more easily and accurately than previously,” continues Poulten. “Before, we had to dig through piles of work in progress. Eventually, we will have the facility, through the Kronos system, to offer the ability for customers to track the progress of their orders.” Customers will see another benefit, says Poulten: “It’s very important to be able to respond both quickly and accurately when a customer applies for a quote. Our MRP system already holds a huge amount of pricing information for raw materials and outsourced subassemblies. With the addition of labour costing information from the SFDC system, it will provide an immensely powerful and flexible costing and estimating tool that will provide our estimating and costing departments with much more immediate figures of a higher level of accuracy.” In batch and process industries, the focus is also on integration, rather than increasing automation or simulation. “The sort of technology people are using nowadays, PC-based, gives them a lot more power to interoperate with the plant much more successfully and in a much more user-friendly way at the shop floor level,” explains Nick Taylor, business manager at plant controls specialist Emerson Process Management. “The same degree of automation is going on, but now the operator can get involved,” he continues. “In pretty much every project that we do the operator is woven more tightly in terms of record-keeping into the automation system. So instead of just pressing a button he or she maybe has to scan a barcode, sign in, enter a password and is walked through the manual part of the process.” Profitability up Providing better, faster information is the overriding aim of any integration project. And that information is crucial to making decisions that affect profitability, says Taylor. “How do you answer questions like should I be making polypropylene in the Philippines or in Italy this week? You need a whole different set of figures to make that decision – it could be plant availability, it could be ingredient cost.” Alan Dormer, sales director with simulation firm Dash Optimization, uses the term profitable-to-promise, or PTP. “ATP (available to promise) and CTP (capable to promise) answer the questions: ‘Can we fulfil the order from stock?’ and ‘Can we fulfil the order from production?’,” he says. “But PTP answers the questions: ‘Will we make money by taking the order?’ and ‘On what terms should we accept the order?’.” Dormer believes that ATP and CTP will sooner or later be necessary merely for survival, and that PTP will be the tool that delivers real competitive advantage. However, without the timely, accurate figures that integration provides, it just won’t be possible. “This is not just about pricing: it is about the integration of pricing, production and distribution in the wider sense,” he says. And he adds: “If we have the capacity, it may be better to make a large order for a low gross margin product than a small order for a high gross margin product because the former makes a greater contribution to fixed costs than the latter. In reality, the real problem is much more complicated. We know PTP can be done – many of our customers are doing it – and we know that only optimisation technology can solve the problem.” Screen-based systems Integration is also extending to the flow of data both to and from the shop floor worker, leading to time and resource savings for manufacturers, with a move to screen-based factory management systems, using the PC as a control system or visualisation portal. “But people are also bringing in things that they might have had on paper previously, like the method of manufacture,” says Chris Barlow, technical services director of MES vendor and consultancy Fortetion. “We are also trying to persuade them to gather the data into relational databases so they can produce reports on the fly. In the past, some people have been drawing setpoints on a piece of paper every half hour and then drawing a line between the dots!” At Thales, screen-based systems have replaced a central distribution point for bits of paper. “Drawings are now available on computer terminals right across the production and office complex, so anyone who needs to can access them – and they always get the current version,” says Poulten. “Furthermore, our customer repairs cell has been equipped with individual computers with flat screen monitors, so that the repairs staff can access all the technical information they need – parts lists, drawings, circuit diagrams, test specs, etc – and the returns documentation. The benefit is that the repair can be completed more speedily.” Screens also provide a capture point for information flowing the other way, including electronic verification and signatures. “Instead of having to go away and write information on a piece of paper, you have the tool in front of you to enter data electronically – and data that you might log manually,” says Barlow. “But there is definitely some evidence of a reluctance to change,” he adds. Aye: and there’s the rub.