Making automation pay enterprise-wide

 By Vernon L. Trevathan, PE, PMP

hat’s the second thing you ask when you see a new piece of automation hardware or software? The first thing you probably ask is “What does it do?” Or, if you already know something about what it does, you might ask “How does it work?” Then the second thing usually is: “How much does it cost?” It’s just human nature to ask the price.

When the buying decision is subjective as it is in personal purchases like a new digital camera or a new car, its priceis the right thing to focus on. But purchases of new technology for automation applications should only be for objectively estimated benefits. That means that for automation the better question is “Will it deliver net benefits that exceed my company’s hurdle rate?” If so, it should be installed whether it costs $5,000 or $500,000; if not, then don’t buy it.

We often ask the cost question to make a quick analysis of whether we will be able to get it approved. If a level of credibility does not exist in your company that allows new automation with good benefits to get approved, then you have some work to do. Of course there are some companies that will not spend any money on anything regardless of the benefit, but that is hopefully a temporary situation and at any rate that is a different story.

A Short History of Automation
Distributed control systems (DCSs) began to be installed in the late 1970s with most of the installations done in the 1980s. This was a Good Thing. Digital gave much better control than analog and the DCSs gave the operators much better tools to run the plant. This was such an obvious Good Thing that companies often did not require a specific, well-defined justification for their approval.

In many cases, the intent of replacement projects was to just duplicate the analog control functionality so as to not give the plant too much change too fast, but to allow improvements in the future. Most of these systems did deliver benefits that justified their cost, but they often delivered only a fraction of the benefits they could have. And those future improvements often never happened.

In the 1990s many companies realized they were not getting full value from their control systems. Monsanto did a key benchmarking study that showed fewer benefits from DCSs than did other leaders in the industry. The study resulted in more than 120 automation professionals working part time for several years to identify and achieve more than $60 million of new benefits annually with minimal capital.

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This opportunity was available because the initial DCS installation did not require a hard look to identify and install controls that delivered new benefits. Monsanto and some other companies with larger internal staffs were able to capitalize on that situation. Many companies, particularly including those without adequate internal staffs, did not gain new benefits because engineering contractors and vendors were not structured to provide the efforts to help get these benefits.

Throughout the 1980s and the 1990s there was a focus on integrating data among the various control systems. We were trying to achieve Computer Integrated Manufacturing (CIM), though we were never sure just what that was, and trying to avoid “islands of automation.” This was obviously a Good Thing and many companies spent a lot of money trying to achieve it with only a very hazy understanding of the specific objectives they were after. Some companies focused on manpower reduction and, while the thousands of jobs that were eliminated by these approaches justified their installation, much more could have been done if there had been better defined objectives.

Now most companies are replacing their older control systems. This is a Good Thing. The new systems have much better advanced control capability, better integration capability with less programming, are easier to program and use, and are cheaper to maintain. The benefits seem so obvious that companies often do not require a specific, defined justification for their installation. This often means that there is no stretching to identify and install functionality that will deliver new benefits, so less than the best result often results.

In recent years manufacturing IT applications have often eclipsed automation benefits. These IT applications typically have a different type of justification that can be more subjective and does not stretch to identify quantified benefits. Particularly in the U.S., we often tend to “just do it” when it comes to IT applications. This approach is credited with the impressive productivity increases the U.S. has enjoyed in recent years. However, in the manufacturing area where we have the capability to be more objective, we could have gotten even more from the IT applications if we had searched for maximum benefits.

Now the pendulum is swinging back to automation systems with more emphasis and benefits from using manufacturing data in all types of systems to improve manufacturing. This increasing emphasis on real time manufacturing data means that we need skills of automation professionals who understand real time sensors and data management and plant floor integration. This availability of real time information is very seductive – so much so that we are tempted to install these capabilities without a defined justification. Thus we are in danger of falling into the same trap we have several times before – not getting maximum benefits because we are not looking hard enough for them.