Pursue the perfect plant

Look into creating the “perfect plant” by integrating product and operational management into your environment. This provides the ability to respond faster and minimize impact to the business and bottom line, driving increased yields, asset utilization and order fulfillment.

By John Harrison, SAP Canada

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Production blind spots

At another site (and typical of many others), management didn’t have visibility onto the shop floor and couldn’t reliably say what amount was being produced at any stage in the process. As we analyzed the requirements to provide such visibility, we realized that we had a worse problem than we thought. Not only could we not see what was produced, we couldn’t even get the data to visualize. Some of the counters didn’t detect product, flow meters with low volumes of material going through didn’t register any activity, and lots of equipment had no sensors or counters attached.

Visualization dashboards are only as good as the data available. To collect all the data that are needed may require investment in equipment.

Data deficiencies

Becoming aware of significant excess capacity at a facility or, more correctly, inefficient use of the capacity, we decided to see what could be done to increase asset utilization. The plant’s Industrial Engineering Department was the custodian of all the documentation and information concerning the equipment. While these details were correct (the department, after all, controlled all engineering projects and upgrades), it soon became apparent that we didn’t have enough data. Modern integrated capacity-planning systems require more sophisticated data than the information that was being collected. This was very obvious for some of the vintage equipment, which had been installed around fifty years ago and for which we could get only extremely basic information.

Once we had identified the data that the system required, we initiated a shop floor review. Engineers performed studies on how the equipment was running to gather the performance metrics needed. At the same time, we compared the physical plant to the engineering drawings. We were considering implementation of an EAM system in the future and knew it required the physical location of the equipment for scheduling maintenance rounds effectively.

The results were quite interesting. We had equipment on the drawings that hadn’t been there in 20 years, equipment in place that hadn’t made it to the drawings, pipes that went through walls that didn’t actually exist, and many nooks and crannies that didn’t appear in the plans. Of course, we also were missing documents for existing equipment but had documents for obsolete and retired equipment. Overall, it took the engineering group about one year to complete and update the physical layout plan and to update its own document database with the current as-built/as-modified and performance characteristics. Once we had the performance characteristics we then could perform capacity planning and analysis, which is why we had started the project. And, yes, we did see significant improvement in production throughput once we were able to integrate the production schedule with the capacity information.

The human element

A plant markedly lagged most of its peers in equipment uptime but spent more on maintenance. Its maintenance strategy focused mostly on emergency repair. What little maintenance that was scheduled tended to take place on the weekends because all the skilled trades were busy with emergency repair during normal working hours.

We addressed this problem by implementing an integrated EAM system. We started simply — just scheduling preventive maintenance and, more importantly, doing that maintenance on schedule. By knowing what equipment wasn’t being used, if preventive maintenance hadn’t been done, and which trades weren’t currently assigned to a task, we were able to send the trades people to perform preventive maintenance on the equipment, thus reducing the likelihood of it breaking down when next used.

Once this cycle was established, less equipment was breaking down, which meant less emergency repairs, which meant more trades people were available to do more work during normal operating hours. Eventually all routine maintenance was done in the regular working day. We also enabled (trained) the operators to do some basic everyday maintenance tasks and to take some simple measurements. This freed up time for the skilled trades during their prime shifts.

There was one unexpected side effect. The trades people over the years had grown to expect a significant portion of their income to come from overtime work. As we were able to transfer the maintenance work from the weekends into the normal working day, the company saw a significant reduction in overtime costs. This, of course, meant that the trades people saw a drop in their pay packets.

All efforts toward the perfect plant will both positively and negatively affect your staff. Don’t forget the human element — always consider the impact on your most important asset, your people. Unfortunately, in this case, there wasn’t much we could do to mitigate the lower paychecks. We did try to give what little overtime there was to the worst cases. If we had thought through the full ramifications of the implementation, we could have informed the trades people long before the impact was felt so they could plan their finances accordingly.

A never-ending journey

As you realize your vision of the perfect plant, what was a dream of perfection becomes today’s reality — and brings all the problems that reality entails. What’s interesting is that this new reality, along with its new problems, offers the opportunity to create a vision of the "new" perfect plant. Today’s vision is tomorrow’s reality. A continual renewal process is part of the perfect plant.

Just as all companies, even within the same industry, differ, so, too, does each’s vision of the "perfect plant." Everyone sees their problems with different importance and urgency.

For example, Nova Chemicals primarily wanted to address three problems:

  1. executives’ limited visibility into manufacturing capacity constraints and their impact on margins;
  2. production personnel’s and business line managers’ lack of real-time visibility into performance deviations and their financial impact; and
  3. data inaccuracies because ERP and plant systems were not connected.

By implementing part of its vision of the perfect plant with SAP xMII (SAP Manufacturing Integration and Intelligence) and Pavilion xMPO, Nova was able to:

  • achieve more predictable performance;
  • make better decisions on product mix to maximize profitability; and
  • take new, more profitable orders by having real-time insight into capacity and contribution margin.

Some of the benefits included:

  • millions of dollars in savings from higher productivity and asset utilization;
  • quick identification by management of opportunities for higher margins and profits;
  • access to data in real-time for more informed decisions; and
  • better motivation and tools for operators to maximize efficiencies and close the gap between theoretical and actual capacity.

On the other hand, Eastman Chemical had a different emphasis:

  1. freeing employees from serving as data integrators who manually collect data from multiple systems; and
  2. achieving a "single version of the truth" enterprise-wide based on "right time" actionable data intelligence.

Using SAP xMII and integrating it into its mySAP ERP system, the company gained a number of benefits, including:

  • anticipated savings totaling more than $10 million in inventory, procurement and other areas due to improved use of data as information;
  • reduction in consignment inventory by 8% in the first month and by 23% as of May 2006; and
  • 50% drop in emergency consignment shipments through better inventory tracking.

Take the first step

The quest, like all great journeys or adventures, looks overwhelming in the beginning. However, you have to start somewhere. Decide on what makes your perfect plant. Find the areas in your current plant processes where you don’t meet your vision. Quantify the expected benefits in these areas. Determine prioritization criteria — for instance, time to implement, difficulty, cost, expected benefit and benefit/cost — and the priorities for these areas of improvement. Then start your journey. Be sure to celebrate each success, for the journey can be a long one.


John Harrison is a senior solution architect in the Chemical Industry Business Unit of SAP Canada, Toronto. E-mail him at john.harrison@sap.com.

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