For Dow Chemical, RtPM Translates to Record-Breaking Profits

July 21, 2008
There’s more than one reason why Dow Chemical Co. had record-breaking earnings in its most recent fiscal quarter. But chief among them is the company’s commitment to real-time performance management (RtPM), began Eric Cosman, engineering solutions IT consultant, in his customer keynote to the 2008 Siemens Automation Summit and User Conference this week in Chicago.

“There’s been a lot of talk about change this week, and there’s been a lot of change at Dow too,” said Cosman. “We’re growing through new product and solutions development, mergers and acquisitions, and joint ventures. We’re also experiencing exceptionally fast growth in emerging economies.”

Dow’s 43,000 employees run 56 manufacturing sites in 36 countries, and its engineers, designers and technical support staffs focus on process automation, process engineering, process safety, design and project engineering, project controls, construction management and procurement. To accomplish these ongoing goals, Dow previously developed and used its own homegrown concepts, data processing methods and software tools. However, to run its applications and processes more quickly and work more closely with its many suppliers, Dow needed a common language that staffers and suppliers could all understand.

“Real-time performance management is a management practice. So for the past 10 years, we’ve been adopting industry standards and practices,” said Cosman. “We couldn’t go in just talking Dow-speak anymore, and so we’ve been working very hard to break down those barriers.”

Cosman explained that Dow’s RtPM initiative began by inventorying its underperforming assets that had no quantifiable, underlying reasons for poor performance. The firm also owned many recently assimilated plants and business units, which all had varying performance measurement tools and work processes. Finally, Dow’s former data processing tools lacked the capabilities to resolve these differences or find the reasons for less-than-stellar performance.

Despite these deficiencies, Dow still needed higher, sustained production output from its global manufacturing assets. At the same time, industry regulations were driving the need for increased frequency and detail of operational reporting—14 categories report once per quarter from 85 subcategories that report monthly or daily. Consequently, the company had an increasingly pressing need to aggregate, roll up and deliver performance information uniformly.

“Business changes have led to greater diversity of plant systems, but effective asset utilization is key to return on investment,” said Cosman. "So performance must be understood at a level that allows defects to be corrected, and this makes time-value of information critical to business success."

Cosman added that Dow needed the ability to analyze batch cycle times and batch quantities produced. “As the saying goes, we basically wanted to ‘Track every minute and every pound,’ ” he said. “To do this, data must be available in near-real time, which we defined as within an hour of batch completion. And we required a way to enter reasons for not meeting targets, as well as a framework to compare performance across similar production facilities worldwide. We also needed the ability to report data by process cell, unit, operation and material produced, so if an asset’s performance deviated from target, we could detect a gap, assign a root cause reason and track it after improvements were made.”

Dow’s RtPM effort wasn’t going to be just a one-facility renovation. Its final RtPM solution will embrace and be extensible to more than 500 facilities in more than 100 countries. Applicable and affected application types will include continuous, batch and semi-continuous plants, which will be able to collect, aggregate and centrally report information. The central facility will accommodate multiple plant data sources and provide secure, role-based access to information over Dow’s corporate network.

Cosman reported that Dow’s new information system functions by first exporting data from a plant’s systems in standard XML format when each batch is finished. Besides the usual date/time stamp, this solution also captures and documents equipment used, mass and material information, and its time in each major operation of the equipment cycle. Then it compares mass and time in each operation to established targets, and reasons for the gap are recorded if predefined tolerance limits are exceeded. Siemens’ SIMATIC IT XHQ software displays reports across Dow’s updated facilities―by equipment, material, reason or operation step. Data also can be exported to other tools for further analyses.

Dow presently deploys one central XHQ server with XHQ Composer software as the presentation layer, which enables one data-driven master reference model with relationships to connect data from various sources. Displayed in an on-screen dashboard, the resulting key performance indicators (KPIs) allow users to drill down through two levels, including analysis and details. In the near future, Dow plans to secure and display multiple KPIs for multiple disciplines by using XHQ Version 4.0.

“Our data philosophy is that data ownership is maintained in the back-end data source with links provided from analysis and detail views. Data is cached, not duplicated,” explained Cosman. “This project really took us into a different mindset during 2005 to 2007―using XHQ to scoop data out of individual plant-centric buckets, collect and aggregate it, and use it to identify trends that we might not have seen otherwise.”

Though many of Dow’s facilities and applications already have been updated, Cosman reported that its RtPM project remains ongoing. “We’re in the throes of it right now, and we’re continuing to move forward and use our KPIs. Selecting and designing the right KPIs for each application is really the secret sauce for getting real-time performance management done right.”

For example, one recently commissioned Dow facility began using RtPM at start-up. It has four reactors qualifying multiple products and is still trying to ramp up to design capacity. This plant uses its RtPM data to identify Six Sigma project opportunities for cycle time reduction and provides detailed data for its measure and control phases. In fact, Cosman added that rapid identification and implementation of these projects enabled significant additional capacity within six months after the facility’s initial start-up.

“Asset utilization, asset capability and asset mechanical reliability are key performance metrics that drive manufacturing excellence,” Cosman said. “Enterprise-level RtPM and manufacturing dashboards enable operations management to track asset performance and drive performance improvement company-wide. We’re working closely with Siemens to guide future product development.”

“We’re in the midst of huge transformations in our business, and manufacturing IT is an essential element,” Cosman concluded. “As a result, a combination of the right technology and close collaboration with the supplier are key elements of our success.”