Corporate IT enters the plant

Corporate IT's reach today extends deeper than ever before onto production plant floors for one simple reason: It's good for business. For workers, professionals, and managers, the downside of pervasive computing is that it allows ever-closer monitoring of work activities—whether of an operator engaged in process control, or a plant manager deciding the most profitable way to run product...

By Frank O Smith, senior contributing editor March 1, 2008

Corporate IT’s reach today extends deeper than ever before onto production plant floors for one simple reason: It’s good for business.

For workers, professionals, and managers, the downside of pervasive computing is that it allows ever-closer monitoring of work activities—whether of an operator engaged in process control, or a plant manager deciding the most profitable way to run production.

While disconcerting to those long accustomed to being master of their own domain, the opportunity to optimize enterprise production end-to-end based on aggregated real-time and other type information is too promising for today’s ever-larger corporations to resist.

Production professionals typically have relied on point solutions that lend insight when making important decisions. But individual plants are no longer themselves “point solutions,” but are increasingly viewed as integral elements to such broader corporate enterprise strategies.

“It’s part and parcel of a bigger program: to have a globally integrated supply chain,” says Scott Park, CIO of Volvo Construction Equipment . “The factory is one part of that equation. One global standard ensures the flexibility to manufacture any product in any location in the world,” as well as make plant performance comparisons and institution of best practices easier.

Little wonder the CFO usually is standing right behind the CIO as he launches forays into the plant-floor space.

Other factors apply as well. At the recent ARC Advisory Group executive conference, the shortage of qualified engineers in manufacturing was a topic of near-constant conversation.

As noted in coverage of the event elsewhere in this issue, this suggests another reason for IT’s growing role. While engineering talent is at a premium, skilled IT professionals are prevalent and less expensive to hire. IT may be winning the plant floor simply by dint of superior numbers.

Plant investment purview

Manufacturing software vendors noting this trend are evolving products for use by younger workers, shedding the last vestiges of elements like ladder logic from their applications, and are instead adopting interface metaphors common to the IT world.

Additional evidence of a changed plant landscape comes from a recent IT spending survey out of Boston-based AMR Research that indicates increases in corporate IT budgets in large companies (5,000+ employees) for plant systems.

“Companies have to drive common processes across geographically dispersed locations merely to survive. It’s a perfect opportunity for management to push IT, operations and engineering to become more single-minded in their focus.”

—Dave Petrucci, IBM lead business unit
executive for industry 0solution sales

“IT increasingly aligns with the business strategy, and the CIO is very closely aligned with supply chain issues,” says Jane Barrett, an AMR director. “Corporate IT implemented ERP in plants, but that only goes so deep. MES, quality, and factory-scheduling tools have been purchased by plant people, and so those systems aren’t leveraged beyond the plant. IT is taking a more strategic view, looking at the business to determine the architecture to connect plants and manage for optimized business performance.”

Some say corporate IT’s expanded role in plants is long overdue.

“Many foreign competitors are starting with clean slates,” says William Haskell, senior solutions architect, Hewlett-Packard . “They have tighter integration and greater collaboration from the start.”

Haskell cites construction of a new $4-billion Singapore solar panel manufacturing plant.

“Solar panels are nowhere as complex as semiconductors, where new plants cost between $2 and $3 billion. The Singapore plant will be integrated end to end. Comparatively, U.S. manufacturing lags because we invented everything. India and China have the coolest networks because they’re late adopters.”

While Rockwell Automation found in its IT-Controls Convergence study that the vast majority of respondents were indeed witnessing some evidence of convergence between the two groups, indications of clear progress and benefit took time—as much as three years or more.

In the automotive world, “Greenfield plants are being built around the world,” claims Dave Petrucci, IBM lead business unit executive for industry solutions. “Many U.S. companies haven’t touched the plant floor in 10 to 20 years. They need greater flexibility and common processes across locations merely to survive. It’s an opportunity for management to push IT, operations, and engineering to become more single-minded in their focus.”

Real multiplicity

Another reason for IT’s growing influence is the technology itself, including “increased complexity from virtualization and clusters, for example,” says Bob Mick, VP of emerging technology with Dedham, Mass.-based ARC. “Technical requirements can quickly tax traditional plant IT resources—driving the need for tighter collaboration between corporate IT and operations.”

The question becomes what to do about it. IT, manufacturing, and engineering have been separate functions, and bring very different mind-sets to the table.

“The plant doesn’t like someone from IT coming out and looking at their ‘stuff’,” says Tom Vukovick, director of enterprise technology for Wisconsin Public Service , a public utility.

Conflict between the two groups may be simply a matter of tempo.

“The big hurdle for IT is to understand the high cycle rate on the floor,” says John Plassenthal, IT project manager for Winfield, Ill.-based Navistar . “For operations, it’s thinking beyond today’s production numbers to view the long term.”

Additionally, says HP’s Haskell, “There’s a big difference between batch processing of data as compared to handling 20 data points spitting out 20,000 transactions an hour.”

Bringing IT and operations together is challenging.

“It’s a bit unnatural for operations and IT to come together,” says Petrucci. “It’s challenging, and not all are being successful in breaking down the barriers.”

Collaborative curve

A study from Rockwell Automation found not much progress being made in the collaborative convergence of engineering and IT.

“I thought we’d find people way out on the leading edge with huge breakthroughs,” says Julie Fraser, a principal with Cummaquid, Mass.-based Industry Directions who was integral to the study. “The big surprise: We didn’t.”

On the other hand, best practices are being identified.

“Some of it is old school—deciding what your core competency is,” says HP’s Haskell. “If it’s manufacturing, then everything you do with IT is about delivering a quality product. For IT, however, it’s not about transactions and reports. It is about having a good understanding of manufacturing. Manufacturers have to be smarter in how they do things. But it’s a great opportunity for IT to be the quarterback.”

According to Navistar’s Plassenthal, “The plant needs to be guided by corporate IT; IT needs to be informed by the floor. Together they can make more information available to more people. The marketing VP knows what’s going to be built; the sales VP knows what’s available. Overall, it’s about being more agile and responsive to the customer.”

Most important, “It takes ‘C’-level involvement and peer-group acceptance,” says Fraser. “Somebody has to say it’s not productive when IT, engineering, and operations are separate unto themselves. If need be, they have to replace people. People successful in these environments communicate clearly, but they also listen. The key is for the various departments to come together and work as a team to find better solutions.”

Circling the drive

Some automotive manufacturers have started to do this with tiger teams, says Dave Noveller, IBM industrial solutions development manager.

“They’ve pulled IT, engineering, and manufacturing together as a task force, following the model through the production life cycle, and making the technology changes necessary to support better collaboration,” explains Noveller. “The group should take a ‘process’ view, rather than just thinking about system integration and messaging.”

It’s not a technology problem—it’s a cultural problem, says Haskell, who believes the fact that he started in operations before moving to systems gives him much needed credibility.

“Operations needs to give up some control,” maintains Haskell, “but IT needs to groom expertise in hiring out of manufacturing. IT people don’t need to know manufacturing top to bottom, but get them working with production, and this leads to a blended cross-functional team. Familiarity and trust make collaboration occur naturally.”

Emerging technology also will aid the collaborative process.

“A lot of systems weren’t built with consideration for upward integration,” says Plassenthal. “Going forward, vendors need to design systems with integration in mind. SOA [service-oriented architecture] will be the fundamental in making a lot of this happen. But you must have PLCs that talk SOA, not tags. Eliminating tags would be huge.”

“The more integration you have between IT and other parts of the business—whether operations or engineering or accounting—in the 21st century, information technology is the linchpin of the business.”

—John Plassenthal, IT project leader, Navistar

At Navistar, adds Plassenthal, “It’s more a grassroots thing than somebody telling us to collaborate. We lay out the architecture for the control engineers to follow for the next five years. The goal is to keep everything in line with that. How smart you are in managing IT is a competitive advantage in and of itself,” he asserts.

With budgets, while some would say that who controls them isn’t the real issue, “There has to be a tie between owning the budget and being accountable,” claims Fraser. Most of all, she adds, it takes time.

“It’s not a project. Respondents to the Rockwell survey said they’d started down the path, and they’d been at it three years,” says Fraser. “The impetus has to come from the top, and the top has to understand it takes time. But no matter where you sit in the organization, everyone needs to understand IT improves business performance.”

Corporate IT is reaching deeper into the plant because it makes compelling business sense. While perhaps disconcerting to some—chiefly those in the plant who have long controlled it as a separate domain—it’s a trend that calls for closer collaboration and integration between IT, operations, and engineering.