Determining how to optimally apply limited resources to maximize impact on the bottom line poses a key challenge to manufacturers in the process industries. Often, the best choice is to focus resources on areas that will generate the highest returns or that cause the largest losses. However, prioritizing is difficult if the value of improvements isn't well understood or is hard to measure. Relating performance to business value isn't a trivial task.
Many companies use Key Performance Indicators (KPIs) to focus attention on areas of their operations believed to have the greatest controllable impact on business profitability. To provide this clarity and action, an organization should:
1. understand which metrics significantly affect the performance of its facilities;
2. determine the limit that defines acceptable performance for each metric, and calculate each metric in a consistent and actionable manner;
3. visualize a measurable link between performance and economic benefit/cost; and
4. focus resources on identified areas of opportunity to close the gap(s).
These items are easy to say but not so easy to accomplish. If you can't yet clearly link KPIs and value, you should think about steps you can take to institutionalize a culture and process that supports the four items above, and encourage your organization to identify gaps and act on them in a deliberate fashion.
Process automation assets should figure prominently in value-improvement efforts. How visible is their performance now? Is your company focusing its resources on the appropriate areas to maximize the return from those investments?
A few years ago NOVA Chemicals decided to look into whether gaps in performance had gone unseen and unheard, or perhaps had been seen and heard but not acted upon because of lack of support.
Using a combination of participation in the ARC Benchmarking Consortium and internal benchmarking, the company undertook an effort to compare process automation performance at its larger facilities. The goal was to understand if the automation assets at those facilities were comparable to peers, and to provide corroborating evidence of asset performance. This established a framework to move forward to gain the traction necessary to focus resources on areas NOVA Chemicals believes are important to improve automation asset performance. The KPIs help adjust focus to close identified gaps and deliver enhanced results and, therefore, better profitability. Figure 1 shows a summary page for a KPI report.
Initially, the automation leadership team collated all the individual automation metrics the company was tracking and distilled them into a list of potential NOVA-wide metrics. Selections satisfied some basic tenets, namely, each KPI:
• could be acted upon to improve the metric;
• reflected the health and performance of automation systems;
• required data that were relatively easy to collect from systems in most of the facilities; and
• indicated the performance of deployed resources (employee as well as equipment).
These metrics were aimed at providing a high level view that would prompt investigation and action.
This was the first step — getting clarity on the metrics and answering the question "Are we getting the value out of the systems and ensuring reliability given the resources expended?"