Process manufacturers are pressed by their shareholders to improve their return on assets. To do this, they must get more out of their plants, people, and systems to respond more quickly to their customer requests than their competitors can respond. This response time can be the difference needed to avoid commodity pricing.
So how are manufacturers integrating their businesses to become more agile and more predictable? It starts by better linking your enterprise resource planning systems to your plants. According to SAP AG’s Global Director of the Chemical & Pharmaceutical industries from a 2005 ARC Forum:
If you install SAP for traditional ERP functionality but don’t link to your Plants, you leave about 40 to 60% of the benefits on the table.
You may recall Gary Silverman from an earlier post. I spoke with him about the characteristics of projects which have successfully gone down the path of improving their manufacturing processes through better information integration.
Gary says first and foremost, companies need to see this process as a journey. It’s much more than point-to-point integration between business and automation systems. Since the impact is on people and existing business processes it requires high-level leadership within the manufacturer. Groups that traditionally have been very separate like Information Technology and Engineering must get on the same page for significant business results to be achieved.
Once on the journey, Gary stressed the key areas to get right around the improvement of manufacturing automation is the data model and the process model.
The data model identifies the capabilities and business functions required at each connection point between the ERP system including: inventory management, production control/scheduling, quality management, and plant maintenance with the automation level including: process control systems, OEM/skid-based systems, batch systems, process historians, and the plant floor relational database.
The process model defines the flow from customer order and/or order forecast back through the business process defining the dependent requirement required to meet the packing schedule. The storage locations contain the physical work-in-process inventories from raw materials to the finished product ready for shipment.
Gary summed up what makes a successful project as strong leadership/vision, a well thought out architecture, and picking the right pilot project looking at factors such as availability, capability of resources, and the ability to execute. Once the learning and benefits can be measured versus the critical success factors, the deployment can roll out more broadly to other plants using the same architecture, infrastructure, and data model.