Convergence of purpose

For the past several years now, I have attended annual ARC Advisory Group meetings in Boston and Orlando. At the Orlando show in January an interesting convergence occurred, a parallel that some people may have missed. Those who have been to these conferences in the past know that the Boston event has been more manufacturing-enterprise-focused and the Orlando show more plant-floor-oriented.

03/01/2004


For the past several years now, I have attended annual ARC Advisory Group meetings in Boston and Orlando. At the Orlando show in January an interesting convergence occurred, a parallel that some people may have missed. Those who have been to these conferences in the past know that the Boston event has been more manufacturing-enterprise-focused and the Orlando show more plant-floor-oriented. While the two shows still retain their respective viewpoints, the latest presentations in Orlando definitely depict a merging of themes. Just as real-time performance management (RPM) formed the basis of the June Boston show, so too did it provide the basis for presentations in Orlando.

As Andy Chatha, ARC president, pointed out in his keynote, "today's business environment demands RPM." And that applies to everything from budgeting to key performance indicators (KPIs) for production.

In my role as a manufacturing industry observer, it is interesting to see how the two sides of manufacturing—corporate/financial and production/engineering—are coming together and being helped by development of technology aimed at bridging the gap between these sectors. Another market research firm, AMR Research, has dubbed these applications enterprise manufacturing intelligence (EMI). AMR attributes the development of EMI to the fact that one version of the truth exists on the plant floor, while the other is in front office business intelligence and enterprise resource planning (ERP) or enterprise asset management (EAM) applications. The result is a discontinuity between the process of managing the business and the business of managing the production process. EMI tools are designed to correlate and synchronize these two enterprise business processes, making performance information available to a broad organizational audience.

Bottom line capabilities afforded by EMI include: automation of overall equipment effectiveness (OEE) to eliminate latencies and make OEE a more practical tool for day-to-day management and cross-facility comparison; tracking the root cause of poor product quality or non-compliance; visibility across an organization into KPIs related to asset performance; and eliminating the need to manually update data in ERP or EAM systems.

The best news AMR has turned up on EMI is that these systems provide a payback, on average, within six months. The more broadly EMI is applied, the larger the payback. Estimated return on EMI investment is 10x when used to manage a fleet of plants or assets; 5x when used to manage plant-wide performance; and 1x when used for tactical OEE, according to AMR.

I'll be watching the EMI space closely, as should you. If you've had any involvement with systems in this arena, drop me a line and let me know if your experience jibes with or differs from AMR's.

dgreenfield@reedbusiness.com





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