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August 2007

Automation business rules

Understanding data relationships throughout the enterprise can cut costs, time, and hike profitability

By David A. Chappell

There are many ways to make money. But the one model near and dear to the automation industry calls for a company to manufacture a product. This model is far more complex than it often appears when observing from within the business enterprise. 

Most people spend their entire career in one function of a business, especially the technically oriented folks, as it takes years to master the technical aspects of any one part of a business. Those that move up in management will have experience in only a handful of the vast numbers of components and functions. This often creates distorted views of the rest of the segments and functions that comprise the total of that business world. 

When looking at a consumer goods or fine chemicals company, the Dr. Thomas Hauff model, which says production within an enterprise, and a position within it, were a small part of the overall business enterprise, provides a balanced representation of product supply. If you take the Hauff model and apply it to a refining business, production dominates the supply chain. Looking at a business where production has been totally outsourced, some of the elements disappear all together. These differences can lead to confusion when trying to evaluate methods used by industry to automate their business and supply chains. Automation vendors addressing the needs of production often tailor products to meet critical needs of a specific industry, leading to Distributed Control systems (DCS) and component-based systems built around Programmable Logic Controllers (PLC) and custom Human Machine Interfaces (HMI). These different solution options deepen the confusing environment we find in production automation and make it difficult to explain the details involved in production automation to those outside the small engineering specialties. 

A key point of Hauff’s is the actual production part was really a small segment of the overall chain. Hauff points out each of the segments in the chain had different needs and requirements, and the systems used to manage them or to help in the automation of those needs were also different. This leads to different function specific automation solutions that may meet the specific need of a single function, but often do not work well with the rest of the other areas of the product supply chain. 

Using the ISA-95 functional hierarchy activities model helps understand one of the major reasons there are so many different automation solutions existing to satisfy the requirements of the different segments of the product supply chain. Business planning and logistics in Layer 4 focus on the product supply functions on either side of the production function found in the Hauff model. The ISA-95 Manufacturing Operations Management standard primarily focuses on production and has a time horizon much shorter than the business planning and logistics level and requires special consideration when designing and developing automation that must span these different and shorter time horizons. This creates a challenge in communication between the different systems attempting to manage the delivery of a product to the end customer and those systems attempting to actually produce the product as each must deal with the time horizon of their domain. This is an area where vendors that supply the equipment used in automation of these different levels can improve, making equipment that can seamlessly interact with equipment at all of the different levels and still address the needs of their own time domain. 

‘Different automation’

The Hauff model does not attempt to address the parts of a business not directly related to product delivery. These business functions are often closest to the business leaders and get most of their attention and support along with the systems used to “automate” these business functions, often defining what they understand as “automation.” Understandably, they sometimes become frustrated and confused when confronted by the “different automation” required for product supply and then even more differences for production within product supply. Over time, the business leaders and their IT organizations have worked to deliver the automation of these business functions using what appears to the business leaders as a single integrated system. Even though in reality the systems consist of parts that require an IT staff to make it appear to be tightly integrated, often using hard linking and internally programmed business rules. The business leader’s perception easily overcomes the reality.  

Business leaders that manage the capital of a company get to decide how the company will use the funds. In most cases, business leaders remain involved with the business functions closest to their heart, generally through the use of ERP systems focused on the needs of that segment of a business. By adding the Level 5 Business Management layer to the ISA-95 model, we can see where the very expensive and well marketed ERP and business automation systems came into existence. The costs to have an ERP system modified to be flexible enough to match the methods used by a new customer is beyond reasonable, and the reality is companies that want to use these products are desperate to dump their own custom in-house systems that do not work well and are very expensive to maintain. Many companies see the “promise” of nirvana vs. the real pain and suffering of their custom systems and are willing to make the sacrifice. While the reality may not be the promised nirvana, it generally is better than the previous chaos and pain. Part of this promise is to have all data required to run a business at the right locations and in the right form so it is ready for use at that location at the right time. To realize this promise, business automation systems require they be in control of everything throughout the entire business process. Most of the functions provided by the business automation system remain “hard linked” and require system experts to make changes. The good news is it is now possible to make changes when something new occurs, which in the past was generally not possible. However, it seems that by design these business systems do not work well with other systems. 

The suppliers of these business automation systems said their systems operate in real time. Operating at these speeds really can help business leaders manage most of their business functions important to them. These systems can also extend down to help manage the product delivery functions as well. At least that is how these ERP systems have been marketed, and the business leaders have bought into it, spending great amounts of money and effort to integrate, sometimes to “force fit,” business functions with the product delivery functions. 

ERP systems do improve the lives of the business leaders and help the business become more productive and profitable. Of course, business leaders gain this success with the help of IT. The IT department’s primary customer is the business leader and not those in production, at least not from the middle of the ISA-95 Level 3 and below, which can lead to some unsatisfactory interactions with those who must provide automation at these lower layers. 

Real-time disconnect 

The business automation systems that extend down to the ISA-95 Level 4 are generally larger and more costly than any single automation production system, and receive more attention as these systems have a large positive impact. When the business planning and logistics systems of the ISA-95 Level 4 meet with the manufacturing operations management of Level 3, we find a definite chasm between these two levels, with fully automated systems optimized for the time domains that exist within each. The systems used so successfully by IT to please their customers are not yet capable of addressing the shorter time frames that exist when a manufacturer makes a product and packages it. IT and their customers often are not clear on why this is, just that they seem to have little to no control or influence from the Level 3 down. 

The product supply chain delivers an existing product via a customer request. The business charts all the routes necessary and identifies where the shallow waters and hidden obstacles are, allowing their fleets of products to sail between all necessary ports. Outside competition will generally reduce the customer base for your products, thus reducing profit for the business. This requires continual change in existing products and introduction of new products to maintain profitability. The businesses generally will not support change unless there is a clear and compelling need, as change is costly and disruptive and business leaders cannot always control the impact and results of initiating a change in the product supply chain. This change requires re-charting the paths a product must travel and identifying new obstacles. Once initiated, business leaders often must abdicate control to others who will ensure change propagates through the deliver system. 

Vertical supply chains 

The Hauff model illuminates the existence of vertical supply chains required to support the different functions of the product supply chain in times of change. The most significant vertical supply chain is the one required to support production. When a needed change occurs, the organizations that make up this vertical chain require significant time and effort to carry out their part of the mission to ready the production part of the supply chain. The production area generally takes longer than any other component in the supply chain to become ready, causing the production component of the chain to be where delays often occur, preventing a new product from reaching the customer, thus delaying income and having an impact on profit. 
 
Product development

Product development and management is a corporate function and something business leaders value greatly. The speed of innovation is variable and difficult or impossible to measure. It is what it is, and to force it to move faster generally fails. Providing tools that help automate much of the work so the innovators of product Research & Development are more effective is a good thing and one that most companies readily invest in. Product R&D has its own significantly large vertical supply chain. Providing an environment without constraints where true development can occur is often a corporate goal, and integrating the work into the business and product supply systems, when the time is right, is a necessary part of the work. In most companies, it is IT that will deal with the disruption of a new product introduction into corporate ERP business and ERP product supply automation systems. When it comes to the production part of product supply, the responsibility of dealing with new products disruption goes to the engineering organizations that support actual production. 

Product data movement

Information and details about a product vary depending on where you are in the functionality of the business structure. There is generally a core set of data pertinent to all functions derived from the corporate archives that contain the portfolio of products; this is generally an area of a company’s closest guarded secrets. As this product core data moves from function to function during the course of product supply, relationships with function specific data will form and transformations will occur to create data and information fit for use within that function.  Based upon the product requirements, a function will carry out its required actions and pass on pertinent data so the rest of the supply chain can create and deliver the specific product to the end customer. Generally, the majority of the created data is for use within a given function.   In the old days of paper, a closely guarded copy of the data that describes a product went to the experts that managed a function. These experts understood all the required relationships and transformations that would enable them and their teams to do what was required so they could produce and deliver a product. When viewed from the outside, the workings of any function are usually not clear and often obscured by the inner workings. The amount of new data created for that function to carry out its requirements is difficult to comprehend from those outsiders unfamiliar with the inner workings of a function. 

This often leads to over simplified views from the outside of what occurs within any function, which can lead to catastrophic results when these observers attempt to “help” by designing an automation system to replace a function based upon their firm beliefs of how a function should operate. 

ISA-88 to the rescue

Forcing physical production systems to be “identical” is much more difficult, and expensive, than forcing business functions to be “identical.” While the end result would indeed streamline a business and provide some benefit, it seems to be an impossible task. When one evaluates the magnitude of change to the “physical” infrastructure of production in product supply vs. the more “logical” infrastructure on the business side of product supply, the value equation to enforce “identical” physical production even in a small enterprise often does not pan out. The ISA-88 Part 3 standard describes methods to allow for physical differences in production and at the same time deliver “identical” results. This is an incredibly powerful concept that only a few have realized. This requires only a few globally agreed to general definitions that have the same meaning throughout all of the different functions. The relationships between all the data items used to describe a product and the transformations necessary as the product makes its way thorough the production chain are managed by the owners of those areas. Not only does this approach reduce the fog of data, it empowers the owners of the areas and functions to manage their own automation and not be so dependent on others who must have specialized skills. 

Smaller is functional

Even a small business enterprise is huge. It is not feasible for the enterprise to provide each and every product supply chain its own individual product development or production supply chain. These organizations must co-exist between the different product supply chains found within an enterprise. Attempting to combine all of the business management and product supply functions into a single monolith system is unworkable, even though some continue to try. It is only by breaking the enterprise down into smaller and smaller parts will you get a size that can be successfully managed and can survive and succeed. Each enterprise finds its own organizations and structures that best fit their business and business leaders, but in the end one is found that enables that enterprise to flourish. If they do not, they cease to exist. The smallest component of any enterprise structure is generally still huge, but is still only a small part of the whole. Product supply is only a part of a business. Production is a part of product supply, and batch is only a part of production. Those who reside in a component generally believe their’s is the center of the universe and the most important part of the enterprise, often spending an entire career in that huge, but small component. Depending upon where you are in the business architecture, your reality, and how others perceive it are often different. Of course, your function is the most important to the success of the business and indispensable. If you and your teammates have not done a good job of marketing and educating the business leaders about your reality, it will be their perception of your reality that will guide their business decisions. It is important to remember business leaders have control over the corporate resources. Be clear and make sure everyone understands the local realities. 

Change is the only true constant. If an organization does not embrace change, it will become extinct. The numbers of business components and their organizational structure will vary from business to business designed to meet the business leader’s methods and philosophies and will probably change over time and as business leaders mature and change. 

In today’s business environment, business leaders view the production part of product supply, and its supporting structure, as an iceberg that continues to sink or damage a company’s fleet of product ships. This often causes a perception that production is a tactical liability and not a strategic asset. Efforts are underway to improve the production supply chain so it is as reactive as other components in the enterprise.

Even though ISA-88 originally supported the batch manufacturing industry, it continues to prove it can be applicable to all of production. As companies move forward in automation, the key ISA-88 concepts, such as Part 3, will influence and improve areas and functions. 

ABOUT THE AUTHOR

David A. Chappell is chief technology officer at West Chester, Ohio-based Complete Manufacturing Automation. His e-mail is chappell.da@gmail.com. The story emanates from a paper presented at WBF’s 2007 North American Conference.