When Dick Hill was working at an oil refinery , he discovered some fuel inefficiency due to excess oxygen. He did the math on the loss of fuel and converted the loss into a financial calculation that could justify the use of automation to control the oxygen flow. He took the calculation—in which he converted fuel loss to dollars lost—to the plant manager, and received instant support for an automation investment to end the inefficiency. The trick behind that success was converting the engineering discovery into business dollars.

Hill is now a vice president and general manager of manufacturing systems at ARC Advisory Group Inc., in Dedham, Mass. He advises plant operators on the art of turning engineering stories into business stories so that those holding the purse strings will see the need to invest in plant technology and automation. “The problem with a lot of automation investment proposals is they are not put in financial terms. They are put in flow or parts per hours,” says Hill. “They need to be in terms business people can relate to. What is the difference between 1,000 parts

per minute versus 1,500 parts per minute? Turn it into dollars per minute.”

Cutting staff

In the early days of plant technology investment, the costs were supported by staff reductions. In the ‘70s and ‘80s, plant operators lost their jobs to automation. In the ‘90s, it was engineers who took the dive to justify new technology. Now, headcount is rarely the justification. These days, it comes down to saving 1 percent or 2 percent on plant operation costs, and that savings can be more difficult to argue than staff-reduction.

Some executives understand the value of automation investments. “There are management believers who believe in spending money on automation,” says Hill. “A lot of forward-thinking executives are doing a baseline on things like inventory turns, efficiency and overall equipment
effectiveness, the key indicators.”

Other managers, however have to be convinced by specific and measurable gains for the investment. Automation supplier Invensys interviewed chief executive officers and chief financial officers about automation investments and found they’re generally not convinced they’re getting anything out of an investment in automation, especially in an age when easily measurable personnel cuts are not part of the justification. “This is one of the reasons engineering has been downsized so much,” says Peter Martin, vice president of strategic ventures at Invensys Systems Inc., in Foxboro, Mass. “The finance people don’t see automation delivering value and they don’t see engineering delivering value.”

Talk the language

In order for engineers to justify technology investment, the story has to be told in language that upper management understands. Don’t bother presenting an argument that touts KPIs. As Martin explains, “I heard one CEO say, ‘If one more engineer comes into my office to say what the KPI is saving us, I’m going to fire him on the spot.’ ” Martin insists that engineers using engineering language won’t get through to executives.

When plant managers and engineers get ready to sell top management on new investments, they should realize there is competition for that corporate dollar from other departments. “You’re trying to sell the need to replace the control systems, and the guy next to you is from marketing and wants to do more with promotion, and HR (human resources) wants the dollar for employee
recognition—we’re all fighting for the same dollar,” says Yves Dufort, director of strategic programming at Wonderware, an Invensys company and automation supplier based in Lake Forest, Calif.

In making the financial case for automation, engineers need to ditch their analytical approach. “Engineers tend to think that people should believe them just because they’re engineers,” says Keith Campbell, retired director of automation for Hershey Foods Corp., in Hershey, Pa. “Engineers put forward an idea and it’s very well thought out in their minds. Meanwhile, marketing may be tossing out disposable ideas. The idea that wins will be the idea that is communicated in a way that is meaningful to business.”

In order for top management to understand the engineer’s idea, the engineer needs to speak in business terms. That’s where the marketing person can dance circles around the plant engineer. The thinking on the part of the engineers may be sound, but if it’s not converted to business language, it won’t get through. “The engineer has to make the business case first by converting the language of engineering into the language of business,” says Campbell. “Lead with the business language and let people ...