The Real-Time Enterprise

Industrial companies commonly respond to a difficult economy by hunkering down and waiting for the market to swing back up. Although this is often a safe approach, it sometimes results in lost opportunities to increase production, improve efficiencies and better the overall operations of the plant. As the economy weakens, capital spending is naturally cut, which is a very reasonable reaction.

But when capital projects stop, new opportunities to use existing technology and talent to drive performance improvements arise. By seizing these opportunities, not only will the company cope with the impact of a weak economy, it will also be in a strong position to capitalize on new efficiencies when the economy recovers.

Industrial plants are actually a collection of assets working together to create or generate products. These assets include process assets, such as equipment and piping; automation and information assets, such as instrumentation and systems; supply assets, such as energy and feedstock; and human assets, such as operators, maintenance personnel, engineers and management.

To optimize the overall business performance of the enterprise, each of these asset groups must operate collaboratively at peak levels. Because existing human assets are not busily applied to new capital projects during an economic slowdown, this might be the ideal time to divert human asset capabilities to fundamentally enhance the performance of all the other assets.

While this might be obvious to industrial management, what might not be as obvious is determining an effective strategy the plant’s human assets can employ to drive performance improvement. Identifying the appropriate strategy is most readily accomplished by evaluating the business dynamics that have changed over the past few years. To determine what might be new and different in the industry, it might be useful to start at the business basics of the plant.

Shifting sands

At their core, industrial plants exist to generate product at the lowest possible cost. In the process industries, the majority of these variable costs come from energy and feedstock. When evaluating these business variables for dynamic changes that have occurred over the past few years, we find that important shifts have occurred.

For example, only a few years ago, industrial companies could negotiate energy contracts with their suppliers over a period of six months or even one year, effectively making the price of energy a constant value. Today, long-term contracts are no longer available in most markets and, not only that, the price of energy might change many times every day. This shift has completely altered the business dynamic and created the need for an effective business management system. Since their inception, manufacturing processes have had to operate in real time. Now, the business of manufacturing has to be conducted in real time too.

As a result of these dynamic shifts, traditional strategies for managing manufacturing operations fall short. Most of the business management infrastructure in industrial operations has been designed and implemented to provide monthly snapshots of businesses that are changing minute by minute. This is unacceptable. It’s tantamount to driving a car while only looking through the windshield once a month, hoping that you arrive to your desired destination without an accident. It is just not going to happen.

business value is limited by mandatory safety programs that focus on protecting the people, the process and the environment. In many cases, these safety standards impose constraints on business variables and often work at odds with business objectives.

Many of variables that measure safety fluctuate in real time. For example, the process and equipment measurements that foreshadow an impending accident or event, such as equipment vibration or temperature, change in real time with equipment operation. Even environmental issues, such as emissions, can change in real time. These safety variables must be managed in real time while simultaneously driving real-time business improvements even as other key business variables are changing in real time.

It is obvious that the most effective strategy to improve performance in such a real-time atmosphere is to develop a real-time business operations management infrastructure that is built to match the dynamics of emerging real-time enterprises.

It is important to note, as well, that many industrial business executives are under great internal, public and regulatory pressure to make their operations environmentally sustainable, which is part of the overall safety variable. Environmental sustainability encompasses emissions, energy, effluent, water and other key variables that can be impacted by an industrial operation.

The good news is that most industrial operations already have the tools to move to a real-time business operations management strategy. They just might not be the tools most business managers look to when addressing other business issues.

Engineering knowledge

A real-time enterprise requires business and operations information to be available to operations personnel and management in real time, but traditional IT systems are not designed to provide information so frequently. They are optimized around monthly, weekly or, at best, daily schedules, and they typically do not contain data that reflect the real-time operation of the business.

It is impossible to take monthly data and extract minute-byminute guidance from it. On the other hand, automation systems were designed from inception to operate in real time. They are also connected to a real-time process instrumentation that reflects everything that is happening in the plant second by second.

Granted, this “database” is difficult to use from a business perspective, containing information such as flow, level, temperature, pressure, speed and chemical composition, but there is a clear relationship between these basic process variables and required business variables.

Using real-time business information, such as current energy costs that can be retrieved directly from utilities in electronic format, basic process data can be transformed into required business and operating data in real time, allowing plant personnel to make real-time decisions that improve the plant performance in real time. And this typically requires no additional capital investments. All it requires is talent that can use existing plant automation and information systems in a new and different way to apply real-time operational and business information.

Although the concept of a real-time enterprise might seem daunting, the basics of controlling and improving such an enterprise are much simpler than they initially appear. The key is to build on the knowledge engineers have developed over the past fifty years in controlling real-time production processes.

Four-block model

The four-block process (see graphic) shows how this transposition can be accomplished. The first block represents real-time business measurement already discussed. Once these measurements are available, they can provide each person in the operation with the information they require, empowering them to make decisions that generate ongoing business value in real time.

These empowerment dashboards must be carefully designed to provide only the easy-to-understand data each person requires to improve business performance as they execute their job. For frontline personnel who operate in the most real-time environment, it is very important to limit the information only to what is necessary and to contextualize it to the current manufacturing and production strategy.

The next box of real-time business control shows how the classic concepts of feedback and feedforward can be applied to business variables, not just process variables. The final box is real-time business optimization. The connotation of business optimization in this context is not limited to linear and nonlinear optimization techniques.

Rather it is focused on how changes in business approach might help drive performance improvements. For example, the new approach might help break down organizational silos, such as operations and maintenance that traditionally work on the same industrial assets, but with almost diametrically opposed objectives.

Developing collaboration provides common and complementary performance measures for both groups and leads to significant changes in behavior. This, in turn, leads to significant performance improvement and provides huge opportunities to drive increased business value into an industrial operation.

The four-block operations business management model is simple, familiar and effective when applied to business improvement. Most control and process engineers have the background and experience to make great strides toward business performance improvement using it.

But because business improvement is typically constrained by safety issues related to people, process and the environment, effective operations of the real-time enterprise requires that a similar performance measurement and improvement approach be applied to the key real-time variables associated with safety.

Once again, this can be effectively accomplished by applying the four-block model to real-time safety management, real-time safety empowerment, real-time safety control and real-time safety optimization.

The time is ripe

Applying and coordinating the simple measurement, empowerment, control and optimization model to both the safety and business aspects of an industrial operation provides a holistic approach to operations management that matches the dynamics of the business environment in which today’s plants operate. This is how real-time enterprises can be managed and controlled for safe, sustainable, improved performance.

The combination of real-time operations business management and real-time operations safety management provides the basis for truly effective operations. The real-time enterprise, effectively managed, reduces energy costs, increases plant safety and improves overall production while helping to achieve environmental sustainability.

This is a difficult economic time for industry. But such times offer new opportunities for improvements. With the reduction of capital projects, if industrial companies mobilize their existing human assets to build real-time operations business and safety management programs using their automation and information assets, not only will they ride the downturn with less disruption, they will also be in a great position to capitalize when the economic upswing comes. The time is now. The opportunity is ripe.

Dr Peter Martin is VP of Strategic Ventures, Invensys Process Systems