Perfecting the intelligent enterprise
Success will come only through tools that enable continuous innovation of products and processes
By Jane Biddle, AberdeenGroup -- Manufacturing Business Technology, 7/1/2006 12:00:00 AM
What does today's executive need to intelligently run the business? Will the knowledge and tools of the past be sufficient to make intelligent decisions in the future? According to a recent survey from Boston-based AberdeenGroup, more than one-third of manufacturers have substantially increased customer satisfaction and reduced operating costs over the past two years.
While these results are impressive, ongoing operational improvements will not be sufficient to outmaneuver the competition in the years to come. Future success will rely on knowledge and tools that enable continuous innovation of products and processes. Manufacturers have too much data and not enough information.
So how can this data be collected and turned into knowledge to help drive future decision making?
"Data-based" beginnings
Every executive and plant manager has metrics or key performance indicators (KPI) that enable quick assessment of organizational performance. While measurement criteria and perspectives vary from role to role, evaluating results cannot begin until data is collected and delivered to individuals empowered to make decisions and implement changes.
Unfortunately it's often difficult to first access—and then make sense of—production data from various applications and automation systems. While a wealth of information is buried in these systems, each was designed independently for a specific purpose with little thought given to integration until after the fact.
Manufacturers that operate globally have dozens of disparate data systems within a single facility. This problem is compounded as additional locations, acquired companies, and outsourced suppliers are added to their networks.
Expanded legislation, coupled with safety-conscious customers, means more data must be collected every day and made available on demand. Never before has so much production and supply chain information been available about the products that are sold, and the processes that were used to make them.
The challenge herein is to cost-effectively maintain the details required to meet regulatory requirements while intelligently selecting information that is needed for decision-making. Leading manufacturers understand this challenge and are moving toward a resolution.
A recent AberdeenGroup study indicates 85 percent of best-in-class companies already have a global strategy in place to unify data across facilities, and the entire manufacturing enterprise. Major actions taken to achieve this goal are under way (see graphic). First and foremost, for 78 percent of those surveyed, standard sets of KPIs are being established across plants and factories to compare basic metrics such as yield and cost per unit across lines and plants.
Delivering this information in an intuitive way will enable executives to identify overachieving and underachieving operations. Promoting best practices across sister plants should help poorer performers make improvements. Additionally, unified information and global visibility should challenge employees to develop new and better ways of accomplishing the tasks at hand.
Better-performing companies also are establishing technology standards at the plant level. Guidelines for collecting and storing data—as well as systems integration and the selection of future systems—are becoming more common. Focusing on standards and process simplification should help to relieve employees from repetitive tasks, encouraging them to more creatively add value to manufacturing processes where it counts: in production.
Intelligent plans
But executives cannot manage companies on manufacturing data alone. They must be able to visualize operations, analyze causes and effects, and perform "what-if?" scenario planning. Manufacturing intelligence (MI) solutions are relatively new entrants, and present factory data directly via Web portals.
MI solutions enable operators to proactively monitor production by delivering visibility into tasks and pieces of equipment, or enabling plant and division managers to oversee or manage multiple lines or facilities. Senior executives and CFOs must be able to review performance relative to plan.
Managing KPIs and delivering real-time results to multiple decision makers throughout the enterprise are top priorities for the vast majority of manufacturers surveyed. More than 40 percent of the companies represented in an AberdeenGroup study, titled Global Manufacturing: MES and Beyond, have a KPI technology project in progress, while another 47 percent plan on having KPIs up and running within the next year (see table).
However, there is little agreement on the best way to capture this data. According to the study, 41 percent of manufacturers are collecting real-time KPI results via manufacturing execution systems (MES); 29 percent via supervisory control and data acquisition systems; and 18 percent are using manufacturing intelligence solutions. Indications are that that approximately one-third of manufacturers will invest in at least one of these enabling technologies within the next two years.
It is worth noting that a relatively large percentage of respondents say they have no plans, no need, or no knowledge of these technology solutions. However, delivering real-time information directly to key decision makers relative to the KPIs they are monitoring should promote not only more informed decision-making, but continuous innovation.
Starting here
Given the wealth of data available, how can executives close the gap between accessing manufacturing information and making informed decisions? Here are a few simple steps to get started:
At the plant level
Gain visibility and control over production:
Integrate systems across the plant or factory; begin by linking factory automation, process control, and data historians into MES or a plant-level framework; leverage emerging manufacturing-intelligence solutions to access systems directly. Leverage real-time KPI technology capabilities to drive manufacturing performance.
Equip operators and supervisors with real-time information:
Provide tools that enable operators to interact with their assigned production process, thereby ensuring completion of each step and associated testing procedures prior to releasing to the next operator. Also, enable transparency to all operations to ensure smooth flow and allow reprioritization as required.
Empower plant managers to make informed and timely decisions:
Deliver appropriate levels of production information to plant managers, enable visualization of processes, and provide the data and analytic tools to empower plant managers to make informed decisions relative to resource assignment, demand, and unforeseen circumstances.
Across global operations
Set global standards for information, technology, reporting:
Establish common terminology and enterprise standards for managing information, communication of best practices, and cross-location business processes. Implement an enterprise manufacturing performance program that aligns factories to corporate objectives and monitors results on a frequent basis.
Deliver manufacturing intelligence to the boardroom:
Collect and intelligently deliver manufacturing information to executives so they can make well informed and timely decisions. Provide visual representations of operations and enable detailed drill-downs into data on products, facilities, processes, compliance, the workforce, and other critical data.
Leverage technology to fuel ongoing innovation:
As improved processes and technology unlock important data across manufacturing, make results available to executives and employees, challenging them to innovate with new products, processes, and services.
