Time to Reinvest in Automation
How do you inspire co-workers, team members, management, clients, customers, and others to invest in useful automation and control? How do you find the time to break apart your existing processes, find seemingly tiny improvements and opportunities they contain, and reinvent your systems before your competition does?Legacy systems, huge installed product bases, and old equipment logically ...
How do you inspire co-workers, team members, management, clients, customers, and others to invest in useful automation and control? How do you find the time to break apart your existing processes, find seemingly tiny improvements and opportunities they contain, and reinvent your systems before your competition does?
Legacy systems, huge installed product bases, and old equipment logically form the vast majority of control and automation systems in the U.S., Europe, and worldwide. Users have succeeded with them, and are understandably reluctant to change. Profits and jobs depend on keeping manufacturing processes running, and many users are simply too busy to implement widespread changes.
‘Every user is overworked and understaffed. It’s a real problem because people don’t have the time to think about potential improvements and efficiencies. They used to have time prepare for the future. Now, they’re just putting out fires,’ says Francis Leynaert, executive vp and gm, Entrelec Inc. (Irving, Tex.). ‘However, when users only fix what’s broken, they usually continue with existing technology, which means they never get to the next technological level.’
Everyone acknowledges that older equipment is far less efficient, harder to maintain and repair, more labor intensive, less flexible, and generates less useful production data. Unfortunately, these facts and related cries from operators and engineers for new equipment frequently aren’t enough to spur investment by management. Far more than recommendations from suppliers and colleagues, manufacturers respond to demands from external customers and moves by competitors.
‘We fight the ‘If it ain’t broke, don’t fix it’ attitude all day long, but we’ve found in the past three or four years that we’re beginning to turn a corner. For example, previously only leading edge, technical people used fieldbus, but many people are seeing competitors use new technologies, and so they want to do it too,’ says Murray Death, president, InterlinkBT (Plymouth, Minn.). ‘GM and Anheuser-Busch have publicly said they’re going to use more bus-based technologies, which means integrators working with Fisher-Rosemount and other firms won’t have to pull so much wire and bend so much pipe, but they’ll still improve their diagnostics.’
Close to half of respondents justify automation
investments based on lifecycle costs; 32% justify
based on initial installed cost; and neither
expects this to change within two years, says
‘OMAC 2000 Motion Control for Packaging
Survey’ by the Open Modular Architecture
Controls (OMAC) Users Group. For more
information, visit www.arcweb.com/omac.
One reason why it’s so hard to gain investment commitments and secure control and automation project approval at present can be traced to how similar projects were handled in past decades. Peter Martin, strategic initiatives vp, Foxboro Co. (Foxboro, Mass.), says users and suppliers during the past 20 years saw large projects as relatively isolated, reactive events, rather than as part of a continuous business improvement plan.
‘We were all lulled into focusing on single, large projects, which were completed by teams that disappeared when finished. Because of that approach to automation, most projects are still done on a one-project, request-for-proposal [RFP] basis,’ says Mr. Martin. ‘Clients still put together teams that may not have done a project for many years; define what they need based on the old system’s functions and capabilities; and don’t investigate new technologies they might be able to use.
‘Meanwhile, suppliers are ordered to do projects at the lowest possible cost, so they have to strip everything out of the project. This means users often end up with new automation systems that don’t do anything more than the old ones did. And years later, this flawed process begins again.’
Mr. Martin adds the RFP process is also based on antiquated cost-accounting methods, which typically look at whole facilities, and don’t give managers, engineers, and operators specific, high-resolution, process-focused data they need to make better decisions. ‘Most cost accounting and ERP systems are designed as after-the-fact financial reporting systems and not as decision-support systems,’ he says. ‘This means managers and operators often don’t have the information needed to achieve many potential benefits.’
To help break out of this cycle, Mr. Martin says Foxboro begins by asking users if their automation system is truly helping them manage their business. Foxboro then uses customized, real-time, activity-based cost accounting, which gathers plant-floor data, and shows operators and managers the economic effects of their actions, such as sustainable return-on-investments.
‘Plant personnel generally do a good job, but they usually won’t make big changes until they can prove it will aid their operation’s bottom line,’ adds Mr. Martin. ‘Now, we also have performance dashboards, which define what the activity-based accounting modules are measuring, and show how setpoint changes add or subtract from the operation’s overall economic value.’
Improved problem solving
In the past year and a half, Steve Loranger, key account director, Fisher-Rosemount (F-R, Austin, Tex.) has helped conduct 22 studies to assist Solutia (St. Louis, Mo.) decide how to migrate from and upgrade its huge F-R Provox installed base. He spends several days working with production, middle management, and corporate staffers, and assembles a cross-functional team that interviews personnel, gathers data on each site’s specific needs, and then drafts a plan that is presented to upper management. Options-including cost analyses and assumption tests-can range from doing nothing to upgrading to replacing entire systems to a combination of the three.
Mr. Loranger reports that 21 of the 22 studies found previously unidentified benefits. Most also overcame the minimum 12% required return-also known as net present value-needed to pay for the cost of their own financing, as well as the 10-15% return above that needed to maintain their site’s relative profitability-also known as internal rate of return (see formula).
‘Everyone is so embedded in day-to-day site operations that they often can’t see the bigger picture of their business goals,’ says Mr. Loranger. ‘We try to help provide an unbiased perspective of what they can do, including two or three recommendations for improving their application.’
Software, new hardware solutions
Another way to get beyond ‘If it ain’t broke, don’t fix it’ is to migrate from hardware to software or to other newer, more technologically advanced components where possible. Rather than replacing what’s broken with similarly inflexible parts, converting to software functionality often costs less, delivers better data, and provides added flexibility for future expansion and upgrades. These and other advantages can be quantified and used to secure approval for a proposed renovation.
‘People often underestimate the savings in engineering and using new products. They’re afraid of new solutions,’ says Gerd Hoppe, president, Beckhoff Automation (Minneapolis, Minn.). ‘For example, a new PLC switch may seem very expensive when all you want to do is fix one part. However, you may forget that the old PLC will soon need a new card that isn’t available, and the new PLC only costs a bit more than the spare part you bought.’
Chandran Nair, group manager for control and connectivity products, National Instruments (NI, Austin, Tex.), says newer hardware also adds flexibility. For example, NI’s PXI platform uses off-the-shelf, PCI-based chips and components that are modular and can be easily replaced without redesigning or rebuilding a whole control system. ‘This further reduces labor costs because engineers no longer have to weed through spaghetti code,’ he says.
Likewise, increasing use of thin-client and terminal service strategies not only allow users to share computing capabilities over common PC servers, but also enhance safety, ease configuration, and make upgrades even more affordable.
Though software and PC-based control have many advantages, Mr. Hoppe says this environment can still be just as cluttered as any older hardware field, with various suppliers leaving even more integration headaches up to end-users.
‘Users may have one PC supplier, a second for soft logic, a third for interface cards, and three more for I/O blocks, motion cards, and visualization equipment. This leaves all the integration on the end-users’ desks, and many ask, ‘Why should I do this?’ ‘ says Mr. Hoppe.
To reduce inter-supplier conflicts and finger-pointing, Mr. Hoppe suggests that users seek suppliers able to provide integrated solutions, but won’t lock them into product lines that may not serve their long-term needs. Again, genuinely supportive suppliers can help get project proposals approved and installed.
Recognizing this, many suppliers are already foregoing short-term, product-focused sales for long-term, solution-focused partnerships.
Lifecycles, preventive maintenance
One such partnership is Honeywell Industrial Control’s (Phoenix, Ariz.) LifeCycle Management (LCM) program, which provides users with migration, parts, and other services for a fixed cost per month over three, five, or 10 years.
‘This helps reduce big capital expense-related cost spikes,’ says Monte Cadle, Honeywell IC’s support services product manager. ‘We can tie migration and improvements to already-scheduled plant shutdowns. We can even build to forecast, so we’ll have inventory on our shelves that will be ready in time for an upgrade. That saves money for all of us.
‘It can be a big culture change for many sites, but they jump on it when corporate mandates demand costs reductions. For instance, paying $50,000 per month is a lot better than waiting for a crisis; seeking bids; and having to spend $2 million on an upgrade.’
Despite these advantages, recent research by the OMAC Users Group found that less than half of a group of motion control for packaging users justify projects based on lifecycle data (see pie charts).
Mr. Cadle adds that, ‘Many plant managers appreciate that a lot of migration work is done up front, and they get to pay for it gradually afterwards, often replacing a few boards or parts of a control system, instead of ripping out an entire system.’
Honeywell IC’s LCM program also addresses obsolescence, competitiveness, cash flow, and risk reduction issues faced by its members. In addition, under its year-old Manageability program, Honeywell IC is further sharing risk and guaranteeing returns to participants. Honeywell IC recently signed a 10-year Manageability agreement with Chevron that ties Honeywell IC’s compensation to meeting Chevron’s on-site goals.
Foxboro’s two-year-old Guaranteed Return Program also evaluates existing applications, finds potential improvements, and links its fees to specific financial returns.
Because potential automation changes may still seem unapproachable or impossible, it may be helpful to remember that today’s old technologies were once radical departures from the past. The most ancient hardwired network or pneumatic systems were once revolutionary technologies-hard fought for by advocates-because they threatened established methods.
This is one test that apparently doesn’t change over time. True innovation’s burden is that it has to slowly chip away at tradition, repeatedly prove itself superior, and gradually gain enough momentum to replace prior technologies.
Show me the benefits
The most important part of any effort to secure a control and automation investment is showing specific benefits and how it advances the overall organization’s strategic business goals, according to Chandran Nair, group manager for control and connectivity products, National Instruments (NI, Austin, Tex.). For the best chance at acceptance, project proposals should include concrete information, estimates, or even guarantees concerning:
Ease of installation, configuration, and maintenance;
Reduced labor costs;
Improved production data quantity, quality, and accessibility;
Reduced capital expenditures over short and long terms;
Future flexibility and expandability; and
Ability to fit and function within a well-defined lifecycle and/or preventive maintenance framework.
‘We try to understand our customers’ needs and business models, so we can present a plan that contains value for them. Innovation is an unaffordable luxury in many manufacturing settings, and so it helps to show users specific cases in which other people in the same situation have succeeded,’ says Mr. Nair.
‘We recently worked with an electronics manufacturer that makes DVDs and TVs. The company uses traditional automated test and a newer vision inspection system, but didn’t know to integrate them, so they could pass results to each other.
‘NI’s PXI test system with a vision card enabled this communication, which increased units tested in the same time, and accomplished it in a much smaller space, which allowed installation of another production line. Middle management was a little reluctant at first, but the lower level folks were very pleased. In the end, the decision to do this project became a no-brainer,’ he says.
Savvy upgrade on Cream of Wheat line
Faced with increasingly obsolete components and mounting downtime due to malfunctions, managers at Nabisco Cream of Wheat (Minneapolis, Minn.) knew they needed to renovate or replace the facility’s 15-year-old instant hot cereal production lines. Though they valued the former speed and durability of the old lines, the managers recently opted to retrofit and upgrade the lines’ controllers, operator interfaces, human-machine interfaces (HMIs), and software. To hold down costs, they retained as much existing hardware as possible.
The new system would need improved speed, diagnostics, communications, and interconnectivity, including an eventual plant-wide network. It would also require capabilities for generating trending, production, and predictive maintenance data.
Control was previously performed by stand-alone PLCs, which managed individual lines. ‘Before, when we had to troubleshoot two simultaneous lines on different floors, we had to run downstairs, view ladder logic, help diagnose the problem, and run back up,’ says Dave Peterson, Cream of Wheat’s plant engineer. ‘Now, all the PLCs are linked together, and can be viewed from one control terminal.’
The managers eventually selected Rockwell Automation’s (Milwaukee, Wis.) Allen-Bradley ControlLogix controller, A-B PanelView touchscreens, RSView32 software, A-B Bulletin 1394 digital ac servo controller, and RAC 6180 flat-panel computers. The new equipment was installed during the plant’s one-month shutdown window by local systems integrator Cybertrol Engineering (Plymouth, Minn.), which designed and engineered the control systems, HMI, PLC, motion control software, control panel assembly, and wiring.
The managers report that ControLogix gives their lines needed speed and position control; provides more accurate timing; and improves data collection, which aids throughput. It also prevents the collisions and spills that occurred with the old system.
‘The HMI screens maintained the functions and language of our prior control system, while adding more functionality,’ adds Mr. Peterson. This preserved the old system’s look and feel, and minimized training needs and costs.
Six lifecycle phases in capital expenditure projects
There are at least six lifecycle phases inherent in most manufacturing-based capital expenditure projects, according to ‘Business Justification of Open Architecture Control, White Paper Version 1.0’ by the Open Modular Architecture Controls (OMAC) Users Group’s Working Group on Business Justification of Open Architecture. The six phases can help project organizers think beyond traditional approaches when identifying potential costs and benefits. The six phases are:
Justification -concept development and initial project planning; examination of strategic business direction and definition of upgrade to address particular business needs; evaluate one-time and recurring costs and then benefits.
Design and development -time and costs of detailed design of machine or system; can be minimized if adequate planning and work is done in justification phase.
Machine acquisition, build, installation -time and costs of building, and installing capital equipment, such as control system, support equipment, test and evaluation, network and direct numerical control [DNC] capability, as well as training.
Product production, operation -includes day-to-day cost of supplies, labor, power, more training, data collection, and planning and scheduling.
Maintenance -costs of support personnel; training in maintenance and troubleshooting; downtime; spare parts; software maintenance and configuration control; and preventive and optimization maintenance.
Reconfiguration , improve/disassemble, phase-out-includes costs of recovery or salvage; reclamation or disposal; overtime or outsourcing during changeover; and retrofit, rebuild, or buying new equipment.