Control Your Destiny: Valuing Automation with Control Methodologies

Nov. 7, 2013
Can your executives quantify the value of the automation technologies for which you are responsible? If you answered no, you—and the technologies you rely on—may be in danger of being eliminated as a cost.

As someone who’s responsible for automation at your company, do you know how the executives at your company view what you do? I’m not talking about whether they think you’re doing a good job personally, but how they value the automation technologies you work with and the decisions you’re making about automation investments.

I ask this because, ultimately, this comes down to whether or not your executives see automation (and what you do with it) as a cost or a means of generating revenue, increasing profit and/or providing a competitive differentiator for the company.

The reality is that your company’s executives probably see what you do and the technologies you oversee as being a cost. Though this is not your fault—industry as a whole has come to view automation technology as an industry that exists principally for technology’s sake. However, there are ways you can fix this perception at your company and raise the value of what you do in the eyes of your executives.

According to Peter Martin, vice president, Business Value Solutions for Invensys, the key to shifting this perception is to apply control methodologies—the same ones you use with automation technologies in the plant—to address specific business issues.

During his keynote presentation at ISA Automation Week in November 2013, Martin noted that automation was once viewed as being a solutions-oriented industry. However, that shifted in the 1970s. During that decade, automation became more about developing the latest and greatest technology rather than serving as a solution to business problems.

“Automation technologies are wonderful,” Martin said, “the problem is us, we have to first find the problem to fix and then bring in the technologies, instead of the other way around.”

To support his point that this approach is not being used, Martin noted that, in his experience, only 30-40 percent of automation systems capacity and capability are actually used. This lack of full systems application has led the manufacturing industry to essentially put automation systems in and have them “sit there for 25 years until they’re replaced with new systems that basically do the same thing,” he said.

To bring things back to a true problem/solution mindset, Martin said it’s critical to realize that, as Einstein said, “information is not knowledge.” Capturing and storing data that is rarely, if ever, used is counterproductive and a symptom of an ill- thought-out automation system application. You have to realize—and be able to communicate— that automation “puts knowledge to work.”

Thankfully, this idea of putting knowledge to work is starting to happen more often as more companies—and automation suppliers—are focusing on technologies that deliver actionable intelligence to the operator where immediate decisions can be made to benefit the bottom line in real time.

Beyond such beneficial moves, however, the fact is that “accounting does not understand the value we create because there’s a measurement vacuum on the business side,” Martin said. “Automation is value added but no one knows it at the executive level.”

Key to effectively conveying the value of your job and the role of automation in it lies in clearly understanding what executives see as being the major factors driving their business today.

“Executives see the plant as being in control, but they see business operations as being out of control,” Martin said, basing his observation on focus studies he has conducted at Invensys with various manufacturing executives. Being knowledgeable about controls methodologies, you can apply your knowledge of controls to this issue. Industrial business issues, such as energy costs, vary in real time and you can use control theory to deal with this. The good news is that the variables that change in real time—on the business end—are few. The difficulty lies in the fact that business problems tend to be multi-faceted and interconnected. In other words to address one, you have to address others to achieve the desired effect.

As an example of this, Martin said to consider the goal of improving production value. To do that you have to control energy and material costs, which have real-time values. Essentially, the goal of improving production value is a three-objective optimization problem. You have to solve for all three issues at the same time. Though Martin contends that problems such as this can be figured out using control methodologies, it hasn't been done on grand scale via an equation because of variability from industry to industry and region to region. Despite the lack of a blanket solution to this, Martin maintains that approaching business problems from a controls viewpoint open up a great window of opportunity for an automation and controls experts.

Because automation engineers live in the measurement, control and real-time world, they're perfectly suited to address this issue, Martin said. “Executives keep going to IT to solve this problem, but we are the ones who can do this,” Martin said.

During one focus group Invensys conducted with manufacturing executives to get a better grasp on how automation could be applied to their specific business issues, Martin noted that a chart representing a typical business structure resulted (see chart images associated with this article at top right). Looking at the first chart and noting where a measurement vacuum existed, Martin said that by adding real-time accounting and dynamic performance measures (DPM) to the business measurement toolbox to fill the measurement vacuum, you end up with a structure that is, essentially, a double-cascading control loop.

Underscoring the reason why solving these bigger business issues lies with the control experts in a company is that “DPM can’t run in ERP,” Martin said. “DPM runs in the control system, and can provide information on contribution margin right down to the device level. It's a velocity based real-time accounting system,” he added.

If we don't step up to fix the problem of business not understanding the value of automation, “we’ll be eliminated as a cost, even though we’re the most valuable area,” Martin added. “There’s nowhere else a CFO can put his money that will deliver the kind of return we can.”

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