Chapter 6, Strategy, Coordination, and Planning
The flow of information in real-time is crucial for a successful production line. In this excerpt, find out how the integration of process control and planning software systems ensures supply chain flexibility and adaptability and can minimize profit losses.
In Pursuit of the Perfect Plant: A Business and Technical Guide, Ch. 6
Table of contents:
Sales and operations planning for manufacturing
Manufacturing plant information management
Information integration in manufacturing: Process control and planning software
Manufacturing supply chain strategy: KPI and execution in process industries
Manufacturing operations management and planning based on strategic models
Process Control and Planning Software
"Not to worry, Bala," Moulton said. "There is a solution. But it's not an instant fix, nor is it limited to software. Two core pieces of the latter are needed to create the ideal closed loop—the process information and planning systems— and each must be tightly integrated with the other.
"Immediate issues on the plant floor make it tough to change the planning system unless the two are linked in real-time. When something breaks on the floor, you must be able to quickly recalibrate the plan to accommodate the new level of production capacity. Problems like this can't wait until the next weekly or monthly meeting. Without immediate attention, serious money will be lost. The way to create this real-time link is to connect the planning system to a process information system such as Pi."
"Once you do that, how do you reach a stage where your process control information and responsive planning tool are optimally integrated?" Bonhoffer asked.
"It isn't easy," Moulton said. "A lot of advanced process control software requires more real-time data inputs than most plants can muster. A lot, too, depends on the quality of your models. To build them, you've got to see the patterns that your instruments produce and then make sense of them historically. Success often depends on trial and error. Over time, you'll find the right level of instrumentation you need to tune your model."
"What about the payoff?" Mulcahy asked. "Is it worth all that work?"
"Here's an example," Moulton said. "Chevron runs a system that is so responsive and reliable that within a matter of hours after its crude oil has been delivered, all of the recipes to refine it have been adjusted. About 40% of the time these adjustments are immediate and automatic."
"The whole corporation must have signed on without much fuss," Bala said, "if the system helps to generate major profits."
"In the future," Moulton said, "we'll see data collected in real time, with goals and targets adjusted automatically. This is called 'responsive planning.' On a larger scale, responsive planning links the financial output of the plant with expectations for prices and profits against costs. These metrics are then measured against strategy."
"That closes the loop in a very meaningful way," Mulcahy said.
"Just remember," said Moulton, "that all of this is very unlikely to be effective without strong S&OP. It's the go-between that responds to and understands the plant's realities and needs as much as it understands the strategy and vision of corporate."
Read other excerpts and download more sample chapters from our manufacturing ERP bookshelf
This was first published in November 2008