ARC Forum: End-users seek help connecting plant floor with higher-level systems
Orlando, FL—Automation specialists with three end-user companies-Procter & Gamble, General Motors, and Cytec Specialty Chemicals-asked automation vendors to help them integrate plant-floor automation systems and expertise with higher level systems at the opening of ARC Advisory Group 's (Dedham, MA) 'Driving Operational Excellence in Manufacturing Forum' here on Feb. 10-12.
Orlando, FL— Automation specialists with three end-user companies-Procter & Gamble, General Motors, and Cytec Specialty Chemicals-are asking automation vendors to help them integrate plant-floor automation systems and expertise with higher level systems, so they can meet today's nimble, highly competitive business needs. These views were expressed at the opening of ARC Advisory Group 's (Dedham, MA) 'Driving Operational Excellence in Manufacturing Forum' here on Feb. 10-12.
E.L. Skip Holmes, of Procter & Gamble, says efforts have focused on two of P&G customers' moments of truth: point of purchase and point of use. 'Control engineers offer the best insight onto the factory floor and need to use their knowledge to integrate technologies and work systems to deliver information at the point of task,' he says.
Mr. Holmes expects that increases of up to 35% are possible in manufacturing effectiveness, with 15% readily achievable. Technology needs to support decision making; give reports on demand; and provide a deeper level of analysis. P&G operations delivered 50% process reliability in the 1980s; now it's close to 85%. Controls and attached technologies need to work when and where they need to work. He advises breaking silo walls; helping people envision what's possible; making links to appropriate information; communicating and explaining; driving out "victim mentality;" and constantly teaching and learning.
Terry Sutter, president of Cytec Specialty Chemicals, and former president of Honeywell Solutions, says that he recently talked to a major customer about the two most critical issues-cost and cost. 'That set the tone for the discussion,' notes Mr. Sutter. There's a need to look at the supply chain and drive out costs at every level. As a sort of case study, he talked about improvements at an Emulsion Polyacrylamide operation. Putting operators in a supervisory role, rather than direct control, reduced variability and increased capacity by 40%. First-time-right product went from 90% to 98%. Slow-moving or off-grade chemical production fell to zero, adding a penny per share to results. Overall savings totaled $1.5-2 million a year, with 40-50 million pounds of extra product to sell.
Jim Caie, director of controls, robotics, and welding for General Motors, who helps support all of GM's North American plants, noted that the people who buy products don't care about the brand of automation. Global Manufacturing Systems at GM requires that control systems be low cost, reliable, safe, as well as easy to recover, maintain/operate, upgrade, integrate and design. Information needs to integrate with higher-level systems easily. 'We have to eat economics,' he says, because the price of products produced has decreased 7% in six years. Strategies include making automation common, open, and in volume, with one design that's replicable, when possible. A standard package is being implemented, from 1998 to 2004, when the next platform will begin to roll out. Results include 35-60% price increases. The next platform will include PC-based HMI to competitively bid and reduce the number of screens. In future, other technologies may include standard requirements, such as conveyors.
Andy Chatha, ARC's president, opened the session, discussing operational excellence, and emphasizing that it's all a journey, not a destination. ARC expressed hope for manufacturing in coming months, because the forum's attendance was up 10% over last year, including about 425 pre-registrants. More than 25 customers are presenting in the program, which is another positive sign, Mr. Chatha says.
Industry suppliers at ARC's forum also responded to customer concerns about marketplace needs.
ABB's Dick McAllister: "The last two or three years haven't been the easiest. Some say we're paying the price for someone else's irrational exuberance. We see there are still a lot of companies investing. We're a global economy, but not unified. Investment in automation is a small percentage of the total and the returns are great. We need to reach markets to reduce risks by localizing ourselves. We must not be frozen by local issues that we cannot control. We need to find opportunities. Don't be frozen. Invest, invest."
John Berra, of Emerson Process Management Systems: "I did not bring a pressure gauge up here this year. One of the things that struck me is that we're talking about using our tools collectively to deliver business results for those in process and discrete manufacturing. As you look across process manufacturers, most don't earn a return equal to or greater than their cost of capital. That's not a good thing in the long term. We still have many unplanned shutdowns, which have added costs due to safety and downtime. We'd find many disabled control loops, running on manual. We're trying to think through how we can help address those problems. I think there's great value in predictive intelligence, using measurements to sense what's going on with equipment and process. Managing assets is a fertile ground for improvements across many areas. Open protocols, such as FOUNDATION fieldbus, HART and many others, as well as using real-time optimization requires a good foundation. When you have that, we can get at many of these other issues."
customers a competitive advantage. Downtime is one of the important things, but there are other critical metrics to measure as well. You need to get better than the cost of capital."
Kevin Gilligan, president and ceo of Honeywell's controls and automation group: "It's an exciting time, as articulated by end-users this morning. Other opportunities to address are the opportunities that arise as we work with you, our customers. You should expect us to supply system information and prioritize it, so you can act on it and deliver value. You have needs beyond traditional process control. Process issues include security to a greater degree, along with FDA validation. We need to help you be more competitive in the markets you compete in."
Leo Quinn, ceo of Invesys Production Management: "Open standards in our world-class brands are critical to driving manufacturing excellence. We have a poor track record, defined by proprietary walls. The QWERTY standard was developed in 1880, and continues to be used today. It was designed to stop jamming on mechanical typewriters, adding inefficiency. No clever designer has been successful in replacing it, despite opportunities for three to five times proven improvements. In manufacturing, there are similar concerns, with asset preservation and bring-forward legacy systems. ArchestrA platform is an application-friendly framework, with real-time interoperability. A second important standard development is the field device consortium standard (ISA coverage and previous). Having the same tool for configuration of every field device has many advantages."
Steven Eisenbrown, of Rockwell Automation's plc communication business: "(Don Davis has the flu and sends his regrets.) We're focused again on the customer. For many years, we've been a products company. New products seek to better serve the needs of customers. We're looking at multiple control disciplines to tie elements together, and forming consultive relationships to impact balance sheets or income statements."
Claude Ricaud, Schneider Electric's senior vp: "Three trends emerge from challenges. More intelligence is in the system, deeper in the components. Standards are changing the rules. Customers are focusing on industrial and logistical efficiencies. These create stress, but are an opportunity to create value through the supply chain."
Horst Kayser, of Siemens A&D: "Focusing on operational excellence, shows the need from customer perspectives. Automation leads to a 40% productivity increase. Standards and other drivers lead to a 40% cost reduction. One new thing is the focus on layer above and leverage and drive productivity increases. Many fragmented solutions continue in the marketplace. Look for the right partners: global and coherent solutions. Line focus to make the next level of automation succeed."
Question: Will acquisitions continue?
ABB: ABB has participated in consolidations and probably has the largest installed base in the world. We many need to acquire a bit more or partner. We will work in a consultive way to address customer productivity needs.
Emerson Process: I believe there will be further consolidation. We have internal growth and consolidation. We will continue to acquire, in a selective approach.
GE Fanuc: Clearly there's a lot of consolidation, but many are being born daily. GE acquires about 100 companies a year, including Intellution from Emerson recently. We focus on heritage product, and acquire to assist time to market and fill out the mix.
Honeywell: You need to ensure the supplier is going to be there. We're using the cash flow to invest in our business. Sensors and digital security were two recent acquisitions in this area. We're very committed. Experion PKS is the next-level process control business. Continue to look for Honeywell to be a leader in this area.
Siemens: Forecasts are quite difficult, especially when they have to do with the future. (Laughter.) We haven't believed in mega-mergers, but step-wise acquisitions. Step-wise innovation too. We've had organic growth by percentage point every year. The momentum will continue.
Invensys: Invensys is aggressively acquiring people and knowledge. This industry is famous for disregarding knowledge and know-how. Market share growth and innovation are key areas of focus. In the digital Coriolis market, we will take significant share from someone at the table in the next year, if not in the next three months. The largest refineries are adopting FOUNDATION fieldbus solutions.
Rockwell Automation: We're a products, software and services company, and we're expanding in all three areas. Most recently, we acquired Interwave in the MES space. Components and process control safety acquisitions came before that.
Schneider Electric: We are the result of an acquisition. This industry isn't shrinking; there are many new start-ups. We're investing in the younger companies to bring value to the customer. Invest in small start-ups to deliver innovation that market demands.
Question: What do each of you think will get the industry going again?
o transfer there.
Honeywell: As investment increases, we'll benefit. Drive innovation by changing economics for customers. There is untapped potential there because you don't have access to real-time infor-mation at every level, across the enterprise.
Schneider Electric: Innovation is important, but we need to help our customers innovate. Rockwell Automation: Innovation drives growth, but also we need to broaden the sphere of influence within the factory. The industry has seen sluggishness, but serving innovation in key customers will help.
Emerson Process: We're not struggling. If we were in China and many other parts of the world, we'd be talking about how to get resources. Life sciences are growing at their fastest rate in 10 years. If you can deliver real business benefits, not power point slides, you will grow.
GE Fanuc: Double-digit growth for a couple of years. When people buy a drill, they're looking for holes. Understanding domain expertise and understanding customers.
ABB: Don't wait for those things you don't control. Investments that can be made are there. The returns are there. Suppliers and manufacturers can work together. That integration technology exists today. Don't wait.
Invensys: Too many vendors are chasing too few customers. If you cannot deliver true ROI, you will not survive.
Question: Since you need to change your business model to address business needs, and because the million-dollar projects aren't always there, how are you changing your business model to meet other customers needs?
GE Fanuc: At the customer and for the customer. Quantify in advance what drives the process. We have thousands of projects that deliver benefits daily. Every GE business has this focus.
Emerson Process: Move to services, serving as major automation contractor, in $20-30 million range, with complete engineering services. Asset optimization work looks for spots where improvements can be made. Partner.net monitors customer projects, sharing information. Services are available, along with products and services.
ABB: We've started to coordinate resources across units to create an account team to use all of our resources for the customer. Global manufacturing provides economy and efficiencies to coordinate across a number of manufacturing plants. Thirdly, in services, we provide services for maintenance and asset optimization.
Invensys: We're building a model around customer needs that delivers value and preserves assets, along with the need to capture intellectual property, ensure safety, and execute flawlessly. Our consultancy business just started to help define needs and help customers at every level.
Schneider Electric: No one company can do everything. We have to work with others to satisfy specific customers.
Rockwell Automation: Some think it's strictly products, but it's also services. Technologies can deliver the information. Asset management, productivity and standards also are important. Validation and information tracking is important for productivity and also protection.
Honeywell: Our business model is customer focused, and we're organized according to customer groups. We're seeing our best growth in the services area. Performance contracts depend on our ability to address customer needs. There's growth in lifecycle services to save later retrofit costs. We also predict for customers on upgrades. Integration requires more than just process control. We embrace open systems.
Siemens: Domain know-how requires competency centers. Big companies do not have to change business models, but we've provided it for many years, both performance contracts and turnkey services. We play in all these fields with Totally Integrated Automations. We don't have to change, just always improve our services. We have really set off to integrate MES with industrial automation solutions software.
Question: We can only do well if our customers do well. U.S. has lost industries. Can we help them survive here? There are very different needs here.
Rockwell Automation: Ten to 15 years ago, it was heroic to go offshore. Now the challenge is working within what you have to get more productivity. You have to know when to migrate forward, and then when to cut losses and replace it. It differs from a green-field challenge.
Invensys: In an average manufacturing plant, you can play a game of spot-the-employee. There aren't many anymore. We're highly automated. The processing power of the first moon landing had the power of hand-held calculator. I think jobs may come back on shore someday.
ABB: Automation is the great equalizer. When it works, location means less. Automation allows people to compete more equally. However, a certain amount has to be located near the demand.
Emerson Process: Automation can be an equalizer. I'm an old-timer. One of 800 engineers 34 years ago, now 25 there...Perhaps that's too small. The value of people who do the automation just hasn't been emphasized enough. Those left can barely keep up. We need to help them quantify.
Question: Feedback indicates that customers are frustrated in getting good support?
Honeywell: We often tie our success to the success of our customers. There's an opportunity for technology to play a higher role: increasing uptime. Lowering the total cost of operations is needed.
GE Fanuc: Remote monitoring and diagnostics is key. We're providing the role of 30-40 experts, and a remote and diagnostic center to provide expertise over time.
Question: There's been a lot of talk about partnerships. There are long-term contracts, but often the customer wonders if they're getting the best value over time. How can you assure results?
Emerson Process: Document changes and results, and shift the focus away from initial cost to the lifecycle cost, which could take 10-20 years. A few dollars up front could mean a big difference in value over lifecycle.
Schneider Automation: Totally Transparent Architecture provides the best view over time. Rockwell Automation: Initial purchase price isn't going away. Participants need to decide on parameters for measurement up front.
Question: Why are suppliers so afraid of open systems?
Honeywell: I think openness is a good thing. We support standards, so systems can be more open.
Siemens: Profibus is open. We supported OPC DX. We're supporting ISA standards S-88 and S-95. It's always a tradeoff. However, on the other hand, we want a seamless solution. There needs to be competitive pressure on all levels of automation systems. There's a remarkable tendency to stick with one vendor that you've had for years. Perhaps starting with two architectures is a way to introduce competition.
Rockwell Automation: What customers want is interoperability and easy transfer of data. We all claim to be open. But value comes differently from different competitors. We're working with industry groups to provide more guidance.
Invensys: Too much time is spent on talking about the plumbing. Our ArchestrA helps customers dispense with all that.
Schneider Electric: It's the possibility to create new services on top of the architecture that's where value is delivered.
Question: Industry is marred with many lawsuits. End-users fear litigation. Would you like to comment?
Invensys: Buy Invensys technologies.
Siemens: Automation companies should never start fights like this.
Schneider Electric: Many industries have grown with patent protection, such as IBM, which has many patents, and there's much growth in the semiconductor industry.
Question: What about software quality?
Honeywell: Six Sigma and SCI ensure solutions work when released.
Rockwell: Exercise the software-yours and third parties'-in application environments. Cross-functional and regression testing have improved.
Emerson Process: We've adopted SCI. Testing is extremely important. On every system release, we spend $5 million, including a customer beta test. Even though the software is good, it needs to be tested in the application.
Invensys: We have greater than 30% software, seven layers and 1 million lines of code. We released the information seven days late in a three-year development plan.
Question: How do customers protect their own business investments?
GE Fanuc: Accessing information is another area of risk, with real-time access. We're the number one hack site in the world, and we're very careful about that. Our digital cockpit is available to every level of business.
Question: What two technologies are you betting future on?
Just name them, please. ABB: IndustrialIT in functionality. It has integration capability, asset preservation, engineering and operation point of view, and can see wherever is needed. It also provides the ability to evolve. We've invested over one-third of our IT expenses on it, or $16 million a year for three years.
Emerson Process: PlantWeb and PlantWeb. Intelligent field instruments are linked to advanced control on top. It includes $190 million in R&D per year, and more than 3,000 installations. We've also lowered up front costs.
GE Fanuc: Connectivity and analytics. Honeywell: Experion PKS, which is a process-centric system and provides customers with the ability to share information across the enterprise.
Siemens: Totally Integrated Architecture with Profibus, Profinet and Ethernet to MES and ERP levels. R&D is $500 million a year for developing an open and coherent architecture.
Invensys: Seamless migration of legacy systems. And our real-time enterprise network, ArchestrA, which allows users to make real-time investment decisions.
Rockwell Automation: Logix integrated architecture. And our unit that provides focus on solving customer problems.
Schneider Electric: We're transparent, ready to serve in real-time, and bring intelligence into systems, helping customers achieve efficiencies.
Control Engineering Daily News Desk
Mark T. Hoske, editor-in-chief