Justifying automation in the era of the connected enterprise
Results: lower inventory, reduced lead times, improved customer service, and better quality
By John Nesi
According to the Organization for Economic Co-operation and Development (OECD), the global middle class will surge from 1.8 billion in 2009 to 3.2 billion in 2020. This ballooning middle class will translate to greater consumer spending, placing an increased demand on manufacturing, resources, and infrastructure.
Meeting this demand requires automation investments to help operations be more productive, sustainable, and flexible. As global pressures for improved productivity and competitiveness continue to increase, companies need to invest in new, innovative ways to optimize plants and supply networks.
Fortunately, the next industrial revolution is happening right now, and the connected enterprise is the reason for this shift. It is converging information technologies (IT) and operational technologies (OT) and holds the promise for improving global production, sustainability efforts, and overall business agility. If companies are not on board with this industrial shift, they will fall behind. It is easy to understand the implications of this shift, but it is more challenging to justify the automation and cultural investment to leverage it.
A case in point
At automation manufacturer Rockwell Automation, about a third of the 22,000 employees work within 17 global manufacturing plants, which manage nearly 400,000 stock-keeping units and produce thousands of build-to-stock, configure-to-order, and engineer-to-order products. As an evolution of its decades-long commitment to capturing enterprise data to make better decisions, the company implemented an enterprise-wide strategy and automation investment several years ago to better connect its global manufacturing facilities and accelerate the business value of those connections.
The automation investment included a new approach to its manufacturing, focused on the following outcomes:
A standardized, global information system and processes to enable accurate measurements across multiple site locations, including Asia, Latin America, Europe, and North America
Contextualized, working data capital that employees and partners can use to make better decisions
Enhanced collaboration of both systems and talent
An information network optimized for the enterprise
Security designed-in from the onset
Many manufacturers have a diverse product portfolio with plants spread across the globe executing a variety of manufacturing processes. That diversity creates added complexities and underscores the importance of standardization.
In the case of Rockwell Automation, each plant was running on its own enterprise resource planning (ERP) system and had its own custom applications that captured and analyzed data in different ways. It needed to implement a standardized approach across its global plants to gain consistent points of reference and processes for quality control, purchasing, and manufacturing engineering—regardless of location.
It also needed to decrease the hundreds of applications that were registered through its business process mapping. This large amount was due to the variety of products and parts manufactured by the company globally. Variation in data and input/output points collected throughout the system increased the chance of error and the amount of time needed to read and understand the collected information—a challenge not uncommon for large, global manufacturers.
In addition, having a connected system across the globe would allow the company to quickly respond to issues anywhere. For example, if there was a big surge in demand in China, its facility in Ohio would have visibility into its Singapore plant to respond and address production needs, and vice versa.
Planning for the connected enterprise
The company developed a five-year plan to entirely restructure its facilities and supplier network. To address and improve the plan’s technology component, the company focused on updating the different manufacturing execution system (MES) solutions throughout its plants—each customized with little to no integration across the enterprise. By integrating applications into one system, overall production would improve and support the company’s transition toward standardization.
Reducing variation and increasing information visibility at each site would enable managers and operators to measure production efficiencies and inefficiencies. It also would provide an all-encompassing view into the company’s operations and a company-wide benchmark to measure success.
Justifying the automation investment included understanding the shortcomings of the current MES solution at each site and how the company could make improvements to gain the best solution possible in tandem with its ERP system.
The company used an MES application that could be implemented throughout the enterprise. This solution was a cost-effective development platform with an extensible workflow engine and operational model that could grow with operations. The flexible solution also catered to the company’s various product manufacturing styles.
The MES solution and enterprise manufacturing intelligence software now track and record data and pinpoint production trends. They fit the needs of individual sites but also have enterprise-wide capabilities. The solution acts as a funnel for multiple data sources, feeding out understandable, actionable working data capital to make improvements. It pulls information from hundreds of applications, streamlines it into one centralized location, and feeds it into the ERP system.
The scalable solution also analyzes key performance indicators (KPIs) in real time to measure quality, consistency, and process efficiency. More specifically, the solution has the following production-related capabilities:
Production dispatching: Tracks work order management, confirms ERP orders, and provides back-up assistance for ERP system outages
Production quality: Monitors out-of-bounds conditions in real time, managing rework and defects
Production workflow management: Monitors verification points on each product during production, delivering compliance and regulatory reporting
Production performance: Collects test and measure data, providing an enterprise benchmark
Justifying automation investments in greenfield plants
When the company began construction on two greenfield plants in Monterrey, Mexico, it underwent a business requirements analysis to identify all the layers of interactivity between plant equipment and the ERP system. With nearly 3,000 unique products manufactured at the two facilities combined, including printed circuit-board assemblies, motors, drives, power supplies, and light curtains, connection between each layer was vital for success.
Because the plants were new, the team had the opportunity to implement the MES solution simultaneously with the ERP system. The company configured and extended a comprehensive MES application that would integrate communication between the plant floor and the enterprise.
The new system has data collection capabilities that significantly improve product quality. For example, information for each step of the process must be gathered, managed, tracked, and made visible to plant operators so that engineers can identify areas of inefficiency, downtime, or diminished quality within the process. Rather than relying on each station on the line to create its own documentation, the new MES solution collects and sorts millions of data points in a systematic, more usable way. If a particular printed circuit-board assembly, for example, consistently fails a quality check, plant engineers can now use that data to improve the process or product design.
The new system creates a set of applications that can be used in all the company’s major manufacturing facilities. It is a common manufacturing platform that can be expanded to different regions and different product groups, all while retaining an efficient and accurate way of measuring KPIs. It facilitates continuous improvements. For example, the Monterrey teams adjusted the MES solution to better align with its global workforce management software. With that integration, plant managers can more closely track labor against jobs completed; measure labor costs, time and attendance, scheduling, and absences; and show both successes and opportunities for growth.
The context-driven system also presents work instructions and operator information in English or Spanish, allowing new employees in the Monterrey plants to be trained within 30 minutes. Because there is only one system to learn, operators can be easily cross-trained in other functional areas of the plant.
The MES platform also excels at feeding data in and out of the ERP system, which reduces issue-resolution times consistently and supports leaner operations. That improves output efficiencies, the key to any manufacturer’s profitability in building products.
Justifying automation migration investments in older plants
Justifying automation investments within older plants has unique challenges. Most manufacturers are trying to maximize their current asset investments while minimizing the production disruptions of any upgrades. For example, there is an older plant within the company’s global manufacturing sites that produces a wide variety of complex products, approximately 2,500 different products each year. It needed better information from the plant floor to enable operators to make more informed decisions to maximize efficiency.
The company replaced the existing, legacy MES that was becoming difficult to manage and maintain with a new, user-friendly, customizable solution. It allowed the team to add and remove equipment, revise layouts, and ensure that the solution fit the plant’s needs. The real-time display of metrics and performance in relation to expected output gave managers a more efficient way to measure success. The system detects quality issues and provides feedback immediately, allowing managers and operators to address issues quickly and deliver feedback upstream.
Changing the older plant layout to accommodate the new system called for a change to its network topology approach, as well. The company used EtherNet/IP—a standard, open, single-network infrastructure that facilitates secure interoperability with corporate networks and industrial applications. It enabled a wealth of information beyond what plant operators had anticipated. This increased network traffic and required improved network segmentation, so the plant team started managing network structure and hierarchy by using the reference architecture framework. They can maintain real-time network performance and add capacity in the future with minimal impact to the network infrastructure.
Before the new network infrastructure, periodic delays due to data collisions would appear to operators as efficiency declines, but they could not see the cause. Now, with the new infrastructure and connected solutions in place, operators do not need to dig for the “why?” The tools provide validation and allow workers to be predictive rather than preventive and only estimating efficiency based on past experiences.
Operators and engineers can better understand the differences in products, realistic output, cycle times, manufacturing processes, and expectations. They also can focus on the equipment, products, and processes to improve productivity rather than manually gathering data from each line.
Assessing security risks while justifying automation
Risk—including security risk—is a critical consideration when justifying automation investments. With network convergence and the connection of previously disparate systems, security risks naturally increase. Because of this, security programs should be done collaboratively and holistically across all operations, rather than as a tacked-on solution.
For all the benefits of connecting the company’s plant and manufacturing assets, engineering leaders understood how those connections introduced greater internal and external threats—both malicious and accidental. They very deliberately designed in security from the beginning, as opposed to implementing it after the system was installed.
The defense-in-depth security approach used is multilayered—both physical and electronic defenses—to stop threats at multiple levels using numerous safeguards within the manufacturing zone, including device, controller, process, and enterprise. Security program assessments included vendors and suppliers, which were evaluated in the same way as the company’s own organization. A single technology or methodology simply will not suffice against the multitude of vulnerabilities that exist.
Return on the connected enterprise investment
Tangible returns on the automation investment include lowering inventory metrics 31 percent, capturing 30 percent each year in capital avoidance, improving supply chain delivery to 96 percent, reducing lead times by 50 percent, improving customer service metrics such as time-to-want to 98 percent, and reducing parts-per-million quality issues by 50 percent. The company estimates its productivity has improved four to five percent annually.
The internal delivery team and plant managers have already made plans for further optimizing the automation investment:
Continuously improve connectivity throughout the supply chain to prevent defects and minimize scrap
Leverage IT to improve efficiencies and drive productivity
Gather, understand, and apply data so that operators can read and convert data into actionable information much more intuitively
Flexibly expand the MES solution, so it can be applied to a wider variety of products and processes around the world
Automation investments that enable continuous connected enterprise improvements support manufacturers’ needs to constantly improve production speed, efficiency, and quality; generate insights from real-time visibility and historical trending; better manage inventory; and improve tracking and tracing capabilities.
Holistic automation investments like this have even higher returns when early planning includes collaborative input from multiple stakeholders. Operations, IT, and engineering need to share what they are trying to establish, discuss implications for each role, and detail needed information and output goals. As the planning expands to include more roles throughout the enterprise—adopting new goals along the way—manufacturers will uncover an even stronger justification to invest.