Integration: yes or no?

For manufacturers to differentiate themselves and compete more effectively, integration of plant and factory control systems with top-level business systems has been perceived as an attractive goal for years. But now, at a time when the web-connected economy is bringing further pressure to bear for fast, accurate capable-to-promise (CTP) information, and with global competition on the increase, it seems more desirable than ever. “Responsiveness in being able to commit to an order is essential today,” says John Watts, consultant for manufacturing strategy at supply chain IT firm Manugistics. “If a customer asks for 300 units by the end of next week and you can’t say yes straight away, they’ll contact another supplier – so fast, accurate information directly translates to business opportunity value.” Avoiding integration However, obtaining accurate information for customers represents quite a significant change for manufacturers, believes Adrian McNay, managing director of mid-market ERP systems company Frontstep. “In the past, the delivery promise mechanism to customers was out of synch with what was happening on the plant – when a customer asked for a delivery date you based your estimate on available and projected inventory, and the production plans those were based on weren’t accurate.” It might seem that the obvious course of action is to introduce the necessary MES (manufacturing execution systems) capability to provide dynamic feedback from the shop floor that can be fed into planning. However, McNay suggests an alternative strategy might be better. “Planning and scheduling systems are more sophisticated, and can be populated with constraints that accurately reflect what is happening at the shop floor level. They can take into account resource constraints, conflicts with other customer orders, and even cope with ‘parachute’ orders – those that drop in inside your normal lead time and disrupt planned production.” Is there then less need for shop floor to business system integration today than there was in the past? Chris Guerin, head of the manufacturing at Compass Management Consulting, says: “We haven’t come across many people who’ve actually done it and realised any benefit from it.” Mars Electronics One company that found an alternative to live collection of WIP (work in progress) data from the shop floor is MEI (Mars Electronics International), one of the world’s largest manufacturers of electronic coin changers, bill acceptors and cashless payment systems. MEI is experiencing significantly growing demand for coin mechanisms, fuelled not least by the introduction of the euro. It needed to provide its global sales force promptly with accurate and dynamic CTP information. “Previously, we based promises on a production plan produced from a Master Production Scheduling (MPS) system,” says Robert Gee, global pipeline manager. “To provide more accurate data from that would have given rise to an integration requirement. We have avoided the need for collecting WIP data by reducing our manufacturing lead times.” For example, by cutting the time taken to process a PCB from five days to less than a day, the company has streamlined the booking points down to one per line and mitigated the need for detailed shop-floor data collection. Production plans are simply produced on a daily basis. Avery Berkel Another manufacturer which sees little need for any tighter integration between its planning and shop floor systems is Avery Berkel, a world leader in the design, manufacture and service of high accuracy weighing scales, intelligent electronic instrumentation and food processing equipment. “The cost of developing complex interfaces and replacing plant specifically used to manufacture mechanical components for our product would not currently yield significant business benefit,” comments Heath Tipton, business process development manager at Avery Berkel. “Demand through our manufacturing cycle is reasonably smooth, and our internally manufactured components are typically low cost so real time unit control of these items is non-critical. Once agreed and loaded, our production plan is relatively stable, although we do re-run net change MRP on a daily basis in order to catch any demand variances that might impact externally sourced items with longer lead times.” And he explains: “Demand variation is often less constrained by workcentre availability and more by available manpower. For flexibility, our flow lines are not scheduled to operate at maximum capacity. We allow a degree of headroom to cope with demand peaks – previous analysis work we’ve conducted also demonstrates certain product demand peaks to be seasonal, cyclic and therefore predictable.” Integration challenges Nevertheless, in some instances integration is unavoidable, says Neville Merritt, marketing director at ERP and e-business software developer SSI. “Plant level data can be very detailed – for example, a control reading every 10 seconds. At the next level, business data will tell you things like how many products are going to come off the line to satisfy a customer order. And finally, the very top level is how much money we’re going to make.” These seem very different things, but as Merritt points out, “What’s happening at the plant level can impact that top level information – so if consolidated data is fed from the plant level into an ERP system, that in turn can deliver key performance indicators to the boardroom.” But he also warns against rushing into complex integration projects. “You don’t want to have any integration that isn’t directly related to business goals. There’s been far too much effort in the past producing reports that nobody looks at.” Russell Storey, director of solutions management at reborn BPCS ERP developer SSA Global Technologies, also sounds a note of caution: “A lot of process info can be really useless from a business concept. There’s not much point knowing that roll 37 will come off press 25 at precisely 13.25 on 1 January, if you can’t tell a customer when their delivery will be made – the challenge is turning the information into a form that is useful to the business.” That’s not easy. And another thing: as Graham Lyttle, e-business product development manager at another ERP big gun Geac, says. “High speed integration data is only relevant if you have planning software that can actually make use of WIP information and breakdown data. You’re looking at a fairly sophisticated planning engine to use that kind of data, and I’d have thought that the actual deployment of those at the small end in the UK is actually quite low. And even at the top end is probably less than the vendors would have us believe. You also need relatively highly automated machines and data capture devices, together with an MES that’s capable of reporting WIP at that level.” Integration requirements Watts explains how that can be achieved. “With a tight link between the APS (advanced planning and scheduling) and MES systems, if something disturbs the shop floor, progress it is fed back to the APS. There comes a point at which it can say that sufficient delay has now built up that we should reschedule with the new parameters – which may be that machine 15 has gone down, for example.” Unfortunately, this is one area where Internet protocols have yet to make much impact. Generally, where integration between MES and planning systems is required, the interfaces are still largely proprietary. However, Watts concedes that this degree of information exchange is not for everyone. “It’s necessary where there’s any degree of volatility or choice that needs to be made,” he says. “But a manufacturer of relatively few products with semi-dedicated lines has pretty straightforward planning problems to solve. Your only monitoring requirement is that equipment is up and running and doing what it should. But where you have contention for resources, whether plant or material – for example, where companies are making a wide variety of products or finished items, all using the same equipment – that’s a different situation.” Where integration is required, Watts emphasises that it’s not necessary to monitor everything. “We subscribe to the theory of constraints (TOC) way of looking at things – so a manufacturer needs to look at bottlenecks and constraints and try to synchronise the overall flow of the plant to the pace of those. So all we need to do is monitor how those, the critical resources, are operating – if anything else goes down, then by definition they are not critical and they have time to catch up.” Don & Low integration One manufacturer to whom tight integration between shop floor and line-of-business systems is essential is Don & Low, although not in this case for reasons of providing CTP information. Instead, the major benefit is a reduction in wastage. A major European manufacturer of industrial textiles, headquartered in Forfar, Scotland, with a history stretching back 200 years, Don & Low has completely overhauled its IT systems and now uses an application called DBO (Don & Low Beam Optimiser) to interface between its planning software and the weaving looms. Customers have different requirements for the length of roll that they can accept, but to provide fast delivery times, looms can be weaving for stock before orders have been taken. Thus as soon as an order is received, this information needs to be communicated to the looms, so that rolls are doffed (cut) at the correct length – if they’re outside the customer’s tolerance, they could be wasted. “With 244 looms, to have people running about with bits of paper would be impossible,” explains Bob Taylor, IT manager. “Works orders are therefore automatically sent to shop floor devices.” The same integration provides for feedback, too. “Information is updated as each roll is doffed at the loom, so we get a reality update rather than a theoretical one,” says Taylor. “We therefore know the exact length of rolls that have been woven.” Differentiated services? Don & Low isn’t the only example where CTP is not the driver for greater information flow to and from the shop floor. By providing increased visibility to customers about their processes – for example, allowing a retailer to check the temperature of a sandwich-making process – many manufacturers have the opportunity to provide completely new information. “The plus point is that the manufacturer is offering something that is not price-based, which allows a value element to be added to the contract,” says Guerin. “That’s an added value that they potentially should be able to charge more for, or use to increase market share because it might give them preferred supplier status.” This might come as a bit of a culture shock to some. “Manufacturers like to make and sell, but this is more of a listen and serve model,” says. Guerin. “It’s great for consumer and retailer, but if the business model of the manufacturer is to make and sell then this is a question that needs to be thought about.” Are you culturally ready to move to a listen and serve model rather than the traditional manufacturer’s stance of make and sell?