Time for Plant and Corporate IT to Grow Up

Feb. 4, 2008
Both The Plant and Business Sides of the Enterprise Must Grow Up and Work Together, Because the Role of the 21st-Century Plant Has Changed

Read Charlie Gifford's blog... Hitchhiking Through Manufacturing

By Charlie Gifford, 21st Century Manufacturing Solutions LLC

Welcome to my first column.  Briefly, let me explain the column theme, “Hitchhiking through Process.” Its roots go back three years to when I started the ISA-95 Best Practices Working Group to document a public set of methodologies and applications of the ISA-95 Enterprise-to-Control Integration standard. i sought out experts in operations management systems and their enterprise integration from different vertical industries and discovered that most of them were a lot like me. They’ve traveled the world as system integrators and end users optimizing plants and tying them into the extended enterprise. They’re not desk jockeys, but road warriors, who hitchhike around the globe from project to project, all the while gaining a fairly objective, holistic view of how to optimize manufacturing through industrial IT, and how to apply continuous improvement methods.

This working group did not produce technical reports, but detailed white papers on methods and technical applications in a public forum. Why? Because they continually witness the reinvention of Industrial IT wheel and the repetition of the same bad design, implementation and lifecycle mistakes.

The goal of this group is a repeated process, not repeated failures. We named the first collection of nine white papers as Hitchhiker Guide to Manufacturing Operations Management, ISA-95 Best Practices Book 1.0. We’re working on the Book 2.0 white papers now. Contact me if you wish to write or review. 

This is all by way of introduction to today’s subject—the bloody war zone in manufacturing operations management (MOM) systems. These applications sit between corporate IT (top management and the folks who crunch the financial and planning numbers) and process control systems (performing the role of diplomat, facilitator and translator for the plant’s workflow. They translate operations data into triggers and alerts, and business process and financial metrics). In the other direction, MOM systems translate enterprise work orders and planning into product definitions for detailed scheduling, work dispatching, work execution and process control. The product definition in this case is manufacturing workflow in the form of discrete routes and batch recipes. 

This MOM bidirectional translation is much harder and expensive than it needs to be because of culture and system language differences. The language gap between the financial side and plant process side of the business is so wide that it is the #1 barrier to successful globalization and transitioning to adaptable manufacturing for North American manufacturers. The cultural problem cannot be solved until the language barrier is addressed.

The problem is plants have been and are viewed as cost centers by businesses, which consequently cause finance and planners to run plants in a bare-bones manner—a bad practice, since, as the manufacturing form must adapt to global pull make-to-order supply chains, no money is invested in plants unless it’s less than 12 months to ROI. 

Furthermore, most plants currently run disparate/stand-alone operations IT or paper systems in production, quality, inventory and maintenance, all of which apply distinct languages in their systems, requiring paper-based workflow transactions between departments. That makes for lots of paper calling one item by many names—not to mention much non-value added work and error creation.

No common language exists even at the plant level. So when the business folks, who speak the language of accounting ledgers and material planning, want information exchange from these disparate systems, the Sandbox War ensues. The folks on the business side say, “Give me real-time visibility to work order and financial activity-based costing in my language. (I pay the bills!)” Then the plant person says (not so loudly), “I will only give you visibility to my operations in a black-box format because corporate IT people have no clue about our daily firefights, and we do not need their uninformed opinions.”

Neither side realizes how large and complex job it is to integrate and translate between the plant and business in real-time. So the walls go up, and turf and ego wars erupt, leading to bad compromises with which no one is happy.

Both sides must now grow up and work together, since the 21st-century plant and its role have changed dramatically.  The plant is now the dynamic, adaptable asset in a global distributed supply-chain network. Real-time visibility of capacity and capabilities are essential to global competitiveness. The plant is now in a pull, not push, role in the global supply chain. More products are make-to-order, not make-to-stock.

Many first-world businesses have outsourced manufacturing rather than invest in transforming their plants into  adaptable profit centers. These companies have lowered labor cost, but have constrained their supply chains and market responsiveness, since their contractors are still cost centers. The point here is that the plant is a profit center, and all parts of the enterprise need to recognize this.

The first step toward making plants an adaptable asset in the globally distributed supply chain is to “normalize” the language, business processes and transactions across those supply chains. Business and workflow process are still being built around systems today because of the high cost of custom interfaces, reports and analytics in these disparate systems.

Manufacturing systems must be built to support adaptable business and workflow processes. To do this, we must make the business case to corporate IT, business and plant management that they have apply the manufacturing operation standards such as ISA-88/95, OMAC, OAGIS, MIMOSA and OPC across the enterprise in a simple form to lower the life cost of integrated systems and make those systems adaptable to business process. This business case has not been make at the CIO and CFO level of most American manufacturers, as it has been in Europe and Asia. Common manufacturing language is the barrier to 21st-century success for American manufacturing. This discussion has many levels that I will cover at length on my blog, “Hitchhiking through Process.” Please, please join the discussion.

Read Charlie Gifford's blog... Hitchhiking Through Manufacturing