Putting Process on an X ray Plate

Although suffering in some quarters from a rather tarnished image – for reasons that stretch from inappropriate software, to inadequate training, too long time scales and poor change management, leadership and resolve – ERP software has nevertheless brought undeniable benefits to firms across all manufacturing sectors. The process industries are no exception, as companies like Princes Foods, Kerry Ingredients and the CWV Group bear witness. But there are good reasons, and they have to do with clarity of vision and purpose. In fact, common additional functionality specially built for quite different companies across the process sectors (like tight integration with plant floor equipment to better manage continuous and batch processes and operations) are delivering substantial improvements. And chief among reasons for this is that over-used word ‘visibility’ – but of the level of detailed, real time information that matters to good plant and business decision-making all the time. Pick almost any ERP advocate and you’ll hear something like this: ‘timeliness of response impacts your ability to provide customer service, and for that you need rapid visibility of the necessary information.’ Christine Chittock, managing director of SAP VAR and implementer Diagonal, adds: “ERP software provides that visibility for everyone at the same time. If you want to grow, you need that.” This much we hopefully all recognise and know. However, the process industries have additional challenges for ERP software. Aspects like sequential processing activities with interdependencies, involving both the use of resources and the flow of materials, have to be catered for as a matter of routine. Then again, sequencing figures much more highly than in discrete manufacturing, out of which MRP was born. Where discrete factory operations typically revolve around complex, numerous components leading to relatively simple assembly and few product types, process industries are characterised by few ingredients, fairly simple formulations, but complex routes and numerous outputs. Those are crude generalisations admittedly, but you get the gist: processes industries have ‘complications’. Others include the generation of by-products, the need for phased inputs and ‘waste’ products that can have positive value or carry additional costs beyond materials alone – for example, transport, treatment and destruction. Further, production cycles, while variable, are more often than not short, and work-in-progress tends to represent a relatively small amount of capital compared to complex discrete manufacturing. Against that, there’s the fact that these industries tend to be highly capital intensive and automation rich – although not uniformly. And there are different units of measure, vagaries in raw material constituency and so on and on. Cutting the mustard? The point is, it follows that not all ERP vendors can cut the mustard here, and hence the process specialists (go to www.mcsolutions.co.uk to generate your own list). It also follows that for some it’s a case of ‘better the devil you know’ in system terms, and integration isn’t just on a wish list. As Joe Booth, management consultant with consultancy Accesss2Growth, says: “In terms of something like chemical processing it’s very difficult for an ERP system to be tailored to certain companies. You certainly gain the benefits of replacing dozens of legacy systems, and you have data integrity – but at one rather complex chemical plant, they were worse off in terms of the actual detailed planning.” It may sound obvious, but successful ERP implementations here don’t necessarily change all of what’s already working, if it’s working well. The stakes for significant benefit have to be high and there’s no way manufacturers are going to bend their processes to suit the software. At Kerry Ingredients and CWV’s wallpaper plants, for example, planning is still carried out by the people who’ve been doing it successfully for years. At other sites, necessary IT progress has been achieved not by retiring every legacy system, but by being selective and maintaining those that are still deemed critical and where cost/benefits allow. Chris Bowyer, sales manager of IT services specialist Zeda says: “Unilever has been implementing SAP [which] has in general been a very successful implementation. But some of the legacy systems have, over a long period of time, been changed and enhanced. We have been building interfaces to those systems to deliver features and functions that [are] specific to the company’s manufacturing needs.” But it’s not always like that. At Princes Group, one of the largest suppliers to the UK grocery trade, its SAP system did successfully replace the usual plethora of incompatible bespoke systems. And in its case, the resulting single integrated ERP implementation has been able to steer the company through substantial growth where its predecessors would not. Neil Crew, IT director, explains: “When we began investigating the new system the average batch size was around 20,000 litres. Now it’s down to 7,500. Turnaround is also much shorter, down to as little as 12 hours in some cases. No part of the business: order scheduling, production or warehousing, could have accommodated that sort of demand before. The SAP system has underpinned most of the growth.” And he adds: “In the period since the project went live, turnover has increased from £300 to £700 million with no increase in IT or other staff.” Similarly, Kerry Ingredients Europe reports “tremendous benefits” from its implementation of Renaissance CS from process-specific ERP vendor Ross Systems. “Process improvement is the single biggest advantage,” comments Noel Liston, IT director. “Because we are recording in great detail what’s going in and what’s coming out, it’s allowed us to identify process losses, and that’s made a tremendous difference in some of our factories. It has also definitely helped us to improve customer notification and customer service levels in what is a very short shelf-life environment.” And he continues: “Master production scheduling is also a massive benefit – managing the balance between demand and supply. We don’t make a product specifically on one site – we may make it in France, Germany or Italy. Our new visibility of stock, and scheduling of production capacity and purchasing avoids idle materials in one site while we’re buying at another.” The software also provides Kerry with regulatory traceability – all important, particularly in the food and beverage and pharmaceuticals sectors. In this respect, the ability to integrate ERP with shop-floor systems has also been key. This is right down to the plant stuff: “On many of our sites we use batch type processes and are weighing micro amounts of ingredients. Using electronic scales and scanning the barcodes allows us to store the necessary level of detail on raw materials.” Moving on, data visibility was one of the driving forces behind wallpaper manufacturer CWV Group’s (Coloroll Wilson Vymura) purchase of a Tropos ERP system from software developer SSI. IT manager Andrew Wood explains the classic problems: “We were running very proprietary systems that had been heavily tailored to suit our requirements. There was no integration so there was a lot of multi-keying. There was no central data repository, so some people were looking on one system and some on another, and they were getting different answers.” ERP here is used predominantly for capture of data, which it harnesses to provide consistently reliable management information. “Now, every morning we have up-to-date figures for what happened the previous day,” says Wood. “This also allows us to use Tropos to generate the work-to lists for the day.” What’s special about that? Wallpaper printing is an example of a collection of manufacturing processes, effectively spanning process and discrete behaviour, which pose particular challenges to ERP management. Wood: “You start with a reel of paper; you may put some vinyl on it, which may or may not be a stock item; you print it, emboss it, and could pre-paste it; and then you reel and pack it. What’s more, we don’t hold stock at any intermediate stage, so although it’s going on several different machines it is a continuous process.” Wood is rightly convinced that process ERP makes the best fit – the traditional discrete manufacturing ERP/MRP approach would have had to involve a five-level bill of materials, he notes. “The output of one operation in the sequence is the input of the next, so it’s also more like process than batch,” he adds. The full picture of process-centric ERP’s special application and scope is clear. Many supposed process industries have complications that include batch or hybrid features – and vice versa. Indeed, most businesses are not pure one or the other; they’re a mix. Take brewing and pharmaceuticals: mixing and/or blending, followed by a packaging phase and discrete operations. Process ERP’s claim to fame should be its ability to address both: scheduling activities like packaging in the manner of discrete manufacturing – including managing supplies involving Kanban procedures – while the process manufacturing side manages formulations and mixing. There is one more area that seems better understood in big process than just about anywhere, due to its utter reliance on large capital equipment. It’s the importance of maintenance, trendily (and perhaps advisedly) referred to as ‘asset management’: increasing plant availability and plant utilisation (reducing downtime) while also reducing the cost of maintenance and its inventory. Keeping production running is not only key to avoiding what can be huge losses in revenue, but also at the very least wasted time and materials, and at worst, cardinal breaches of safety. Guard your assets One of the most obvious, but most missed benefit opportunities from ERP in general manufacturing is related to this – and in process, it’s accomplished both inherently at the plant automation level, where the data is readily and continuously available, and at the business management end, using reliability-centred maintenance and integrated scheduling and spares procurement. As Martin Hill, business development manager at ERP vendor Intentia, says: “Many of the potential benefits are missed as a result of a separate maintenance system, or you have to work harder to get them because of the integration.” Beyond this we get into the realms of supply chain management, CRM and so forth, and the similarities with other manufacturing companies reassert themselves: we all have suppliers; we all have customers. Whatever direction you go in, process ERP (at least as much as discrete) teaches us that being pragmatic but also comprehensive, valid and up-to-date in data terms, are all critically important. As Accesss2Growth consultant Jo Booth says: “ERP is data-hungry; you are never going to get rid of people, in fact you are going to have to employ more. If it is going to be working in real-time you will have to have a lot of discipline to manage it, and you need people for that too.” That, if you like, has been the bigger challenge for the process industries: with their people primarily focused on process operations, managing analogue variables and interacting with systems at the batch level, feeding back additional data into ERP has, shall we say, had its ups and downs. But, done properly, with integration to critical systems and to as much of the plant floor as makes a difference, whether phased or big bang, process ERP is worth it. When the business changes, or opportunities present themselves you have the infrastructure you need to be able not only to cope but to take advantage. There are lessons here for all of us.