Monetize controls

For the past few months now I've been using my column to discuss the use of real-time information for improved processes, better decision-making, and increased company value. I've also made clear the paramount importance of control engineers to the real time initiative. Now that I've laid this groundwork, I plan to examine the role control engineers play in advancing the competitive value of th...

08/01/2003


For the past few months now I've been using my column to discuss the use of real-time information for improved processes, better decision-making, and increased company value. I've also made clear the paramount importance of control engineers to the real time initiative. Now that I've laid this groundwork, I plan to examine the role control engineers play in advancing the competitive value of their companies.

To begin with, it should be made clear that real-time performance management, enterprise performance management, or any of the other names used to describe business initiatives aimed at capturing real-time production information and turning it into a business advantage is not about software, although technology is an enabler to this process and therefore cannot be ignored. What's important to realize is that this initiative is more about the way people think about information stored in their disparate manufacturing systems.

At ARC Advisory Group's June 2003 Real-time Performance Management Forum in Boston, ARC president Andy Chatha said, "Dollars must be attached to all KPIs (key performance indicators). It's not about how many parts a line can produce per hour, but how much money a line can produce per hour. KPIs must be converted to financial metrics so that operators can see their effect on profitability. Real-time performance management binds accounting and operations."

Peter Martin, vice president of Invensys Performance Management added, "You have to take off your engineering hat and look at things like an accountant. Sensors don't just provide data; they provide information. Don't use that information only for process control, use it for unit-level cost accounting."

To do this effectively, Martin says the idea that engineers handle automation and executives handle IT must be broken. Before any analysis, improvement, or sustained performance can be achieved as part of a real-time initiative, there first has to be measurement—and that's where engineers should serve as the primary advocate.

Control Engineering is focused on being the voice for engineers as the real-time initiative catches on across the manufacturing industry. We plan on keeping you thoroughly updated through feature articles, columns, and case studies about changes taking place at companies like your own so you will be well equipped to fill this pivotal role. Let me know what your particular interests are in this area and we'll be sure to address them.

In the meantime, keep a healthy dose of skepticism in place to guard against questionable portions of your company's plans, but don't let skepticism turn to obstinance. To help maintain an appropriate outlook, I highly recommend recalling the words of W. Edwards Deming, as shown in an ARC forum slide: "It is not necessary to change; survival is not mandatory."

David Greenfield, Editorial Director, dgreenfield@reedbusiness.com





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