You’ve heard it all before. The promises associated with the idea of using plant floor data to improve business operations are widespread. The data can help measure—and improve—key performance indicators (KPIs). Plant information will bring new efficiencies to asset management. The supply chain can be better optimized.
It’s a rosy scenario. And given recent advances in software that can move plant floor data to the enterprise level more quickly than ever before, one might think that the manufacturing industries are on the cusp of a new era of greatly improved business decision making—all made possible by the broader and more effective use of factory data.
But there is a major disconnect between the plant manager’s plans for integrating the data and senior management’s ideas for how the data can best be used. And the data itself can be a problem. This data was once trapped in control systems. Now that it can be shared throughout the enterprise, managers and executives find the data is often misleading, and they can’t seem to figure out how it can be used to improve the enterprise.
Part of the problem is that plant managers and executives don’t measure the same business metrics and don’t talk the same language. The plant manager tells the chief financial officer, “Our new automation system saved us $2 million this quarter.” The CFO turns back to the plant manager and says, “Where’s the $2 million? I don’t see the savings on the books.”
The right data
The most difficult hurdle facing the integration of plant floor information is no longer technical. The biggest barrier is conceptual. Who needs the data? What data is needed? And will the needed data really help. Sometimes, control system data is more than useless—it can be misleading. “Alarm systems can tell you if you had a motor overload, but they don’t tell you it was because the conveyor jammed,” says John Cavalenes, account manager at Citect Ltd., a Sidney, Australia-based supplier of software for managing industrial information. “The plant system doesn’t give management the information to know they have to change the conveyor.”
Business executives have become frustrated by the overload of engineering data that doesn’t help in making business decisions. “More than one CFO has said to me, ‘If one more engineer tells me how to help the business, I’ll fire him,’ ” says Peter Martin, vice president of performance measurement and management, Invensys Foxboro, of Foxboro, Mass. “We have to push the accounting measurements down to the plant floor, not take the plant floor data up to accounting.”
Now that the enterprise resource planning (ERP) system can integrate with the plant automation system, the flow of information between the plant and the business level tends to go in one direction, up from the plant floor to the business suite. But as frustration builds over how to use the data, some industry experts are reevaluating the direction of the information flow. “In the tobacco industry, they measure everything by equivalent units,” says Marty Osborn, vice president of product strategy, for Datastream Systems Inc., in Greenville, S.C. “Let’s take maintenance and measure it from an equivalent units point of view. Let’s find out if preventive maintenance produces more units.”
What KPIs?
The plant automation systems carry a flood of data, and it’s been a struggle for plant managers and business executives to agree on what data should be measured. “As far as KPIs go, there is certainly the capability to get a lot of data,” says Invensys Foxboro’s Martin. “But the automation domain has been isolated from the business domain.” Martin notes that engineers and plant managers don’t measure the same data as business executives. The engineers and plant people use KPIs to make their plant run more efficiently, and that’s their perspective of what the business people want to do. The business people don’t know what they want from KPIs. “In accounting, it’s called performance measures, not KPI,” says Martin. “The concept of building new KPIs is great, but it has to be resolved to match the way the business people want to run the business.”
Martin uses the example of a power company that was trying to manage its power generation from a business point of view. The plant manager’s idea was to generate power as efficiently as possible. From the business and economic point of view, sometimes the power generation had to speed up and sometimes it had to slow down. “The real issue is managing the economic value of the plant according to the market at this minute,” says Martin. To run truly efficiently from a business point of view, the power plants needed to change their production quickly. “The energy company had to manage the way 63 generation plants put power into the grid. The business people learned that if they send an instruction to go to three-fourths production for the next two hours, the plants couldn’t respond. It was optimal, but the plants couldn’t do it,” says Martin.
In this case, the business level didn’t need the KPIs of the plant, the plant needed to respond to the company’s business measurements. “We’re finding that the real-time measures and directives need to come down from the business level to the operators,” says Martin. “We need to be able to take strategy down to the operator’s dashboard.”
Another area of focus on plant floor data is the ability to improve asset management. Better plant operations data—if used correctly—can potentially increase plant system availability and decrease down time. But as with Invensys Foxboro’s example of the overloaded motor, the data is not always useful. Too often, asset management is viewed from a maintenance budget or operations point of view rather than a truly economic view. “Asset management is not maintenance. Asset management is operating the plant to economic performance,” says Invensys’ Martin. “The objective of asset management is equipment availability and usability. But the real issue is managing the economic value of the plant according to the market this minute.”
As with the example of creating KPIs, the greatest need may be to push the business concepts of asset management down to the plant floor rather than streaming plant floor data up to those who are balancing the company’s assets.
Send data down
As for supply chain optimization, it can be improved when plant floor data is integrated into ERP systems, but as with the KPIs, the best improvements often come when the ERP is sending down information to the plant floor. Certainly it helps the business executives to know production data so inventory levels can be monitored in real time. But it also helps plant-level managers to know the real-time value of materials, which lives in the enterprise system. “There is a need for real-time metrics, but it isn’t just a matter of feeding all the data up to the ERP system,” says Chris Boothroyd, product manager for BusinessFlex applications at Honeywell Inc., in Morris Township, N.J. Production information alone isn’t sufficient to manage inventory. It also has to be managed based on its changing value. “The value of the materials is known to the ERP, so sometimes you have to feed data down to the plant floor rather than feeding data up to the ERP system.”
While technology has provided numerous avenues to take plant floor data up to the enterprise system, that doesn’t mean organizations will be able to make business decisions based on the data. The business use of plant floor data will not become a revolution. The ability to figure out what data is useful, and the further ability to use the data to improve business decisions will progress slowly.
In the meantime, there’s a growing chorus that says business information needs to flow down to the plant floor. “Plant floor data will remain the domain of the people on the floor,” says Doug Lawson, president and chief executive officer of DataWorks Systems Inc., a software and engineering services company based in Mission Viejo, Calif. For the best use of plant floor data integrating with business intelligence, Lawson believes that manufacturers must take business intelligence down to plant operators rather than sending plant floor data up to the business level. “For the plant managers to be effective, you need to bring decision-making closer to them. You have to bring the business data tools down to them.”
For more information, search key word “KPIs” at www.automationworld. com.
See sidebar to this article: Blending the enterprise system with the warehouse system
