Tackle Supply Chain Challenges With Integrated Manufacturing

An advertising supplement to February 2000

Tackle supply chain challenges with

integrated manufacturing Benefit from real-time production data incorporated within strategic planning, including: 䡲 reduced inventory buffers 䡲 better capacity utilization 䡲 increased predictability 䡲 greater customer satisfaction 䡲 more effective cost management

Achieve supply chain optimization, leverage plant floor information

S

lowly but surely, the mainstream business establishment is accepting the notion that information technology (IT) is creating a new economy. In June 1999, Federal Reserve Board Chairman Alan Greenspan told the Joint Economic Committee of the U.S. Sidney Hill, Jr. Congress that SJR Communications Albuquerque, N.M. innovations in IT

“have begun to alter the manner in which we do business, often in ways that were not foreseeable even five years ago.” Greenspan notes that the increasing availability of real-time information—a direct by-product of recent advances in IT—is enabling businesses to operate with lower inventories and fewer workers than they have in the past, “giving them the flexibility to

deal more effectively with evolving market conditions.” More specifically, the Fed chairman says IT, “has enabled business management to remove large swaths of inventory safety stocks and worker redundancies, and has armed firms with detailed data to fine-tune product specifications to most individual customer needs.” In manufacturing circles, credit for

Proof of concept Goal of ‘Level Four’ integration puts management, operations on same page For most manufacturers, reaping the benefits of harnessing real-time plantfloor data will require changing mindsets in addition to integrating divergent information systems. Jon Tschaikovsky says it will require adoption of a concept called Level-Four Manufacturing. Tschaikovsky is a principal in the Supply Chain and MES Competency Group with Computer Sciences Corp. (CSC), a global consulting firm that specializes in helping companies manage system integration projects. Based in El Segundo, Calif., CSC also is an Intellution, Norwood, Mass., strategic business partner. Level-Four Manufacturing calls for integrating plant-floor and business information systems, and then extending those links to include customers’ and suppliers’ information systems. Tschaikovsky says less than 10 percent

of companies worldwide have achieved level-four integration, but those that have “are dominating their markets.” He also says that companies that fail to at least begin moving toward level-four integration risk being driven out of business in the new, technologydriven economy. The traditional approach to demand management has relied on inventory. Supply chain integration, including plant production floors, allows the In the new substitution of information for inventory. Source: CSC economy,

1A February, 2000 http://www.manufacturingsystems.com

FOR MORE INFORMATION , VISIT WWW.INTELLUTION.COM/OPTIMIZE this on-going economic transfor“In fact, we see numerous mation is most often attributed to companies that have people litthe now-common practice of erally typing information from linking enterprise resources plantheir plant-floor applications ning (ERP) systems—the staninto their new ERP systems. dard backbone for corporate That fact alone tells us that there computing—with a newer class is real value to be gained from of applications known as supply putting real-time plant-floor chain systems. data into your strategic planning Supply chain systems include processes.” applications that allow for gauging customer demand for specifUnlocking the true value ic products, and then organizing Intellution’s primary mission resources—materials, equipis unlocking the value of realment, and labor—in order to time information for the worldmeet that demand in the most class manufacturers that make efficient manner. up its customer base. Companies This new, customer-centric like Dow Corning, Smith Kline approach is proving to be the Combining a contemporary technology infrastructure with the Beecham, Ocean Spray, Uniroyideal business model for the Inter- relevant management concepts and business processes results al, Unilever, Nestle, and Bridgenet age. Recently, however, man- in an integrated approach to optimized production. Source: stone/Firestone have long used Intellution ufacturers have begun to discover Intellution’s industrial automathat their ability to satisfy customers is president and CEO of Intellution Inc., tion solutions to coordinate their planthampered by a lack of the one type of an industrial automation software sup- floor operations. information that neither supply chain plier based in Norwood, Mass. “Most Now, these companies—along with nor ERP systems can provide—real- of these projects were launched amid many others—are turning to Intellutime data from the factory floor. talk of making supply chains more tion for help in forging the links “Companies have been very active in flexible and responsive to customer between their plant-floor and business installing ERP systems over the past needs. But many of these initiatives did systems to achieve what Intellution several years,” observes Steve Rubin, not include links to the factory floor. calls integrated manufacturing.

Tschaikovsky says companies have to look at “how the entire business is going to perform in meeting customer demand. And real-time plant-floor data is an important tool for every part of the enterprise that is involved in making and shipping goods in response to customer orders.” Tschaikovsky also warns that companies will not be able to successfully incorporate Internet technology into their businesses unless they have first organized their plant-floor networks and linked them with the rest of their enterprise systems. “The dichotomy that is at work in today’s economy,” Tschaikovsky says, “is that you have to have products available when customers want them, but you can’t have too much inventory on hand, because inventory adds to the cost of goods sold. And if your costs get too high, that hampers your ability to sell products at competitive prices.”

This dilemma can be solved, Tschaikovsky says, through the practice of Level-Four Manufacturing. Getting to level-four requires a disciplined approach that must start with knowing what specific data must be transferred to the business systems. “A supervisory control and data acquisition (SCADA) package running on a production line can have 300 to 400 different monitoring points telling you speeds, feeds, temperatures, etc.,” Tschaikovsky says. “But not all of that data is crucial to helping the business serve customers. Manufacturing people will want to know what products to make, and how many of the products they are making are good and how many are bad. At the executive level, they just want to know how many orders the company has, whether they will be able to ship goods on time to

satisfy those orders, and whether those orders will be profitable. “Therefore, you have about a dozen or so points that need to be addressed for passing data from the plant floor to higher-level systems. The rest of those points are for providing data to help in maintaining the production equipment.” One Intellution customer, American Axle Corp., identified roughly 18 pieces of information that its SCADA system pulls from the more 500 devices on its factory floor as critical for passing to its higher-level information systems, according to Fran Leo, consltant for factory information systems at the Detroit-based company. Leo says those pieces of data—which include things like production counts and machine downtime—had the most potential to impact the on-time fulfillment of customer orders.

http://www.manufacturingsystems.com February, 2000 2 A

“You cannot get real value out of your business systems unless you integrate them with your manufacturing systems,” says Fran Leo, consultant for factory information systems for American Axle Manufacturing, a Detroit-based company, and the primary supplier of axles and other wheel components to the General Motors truck division. “Business systems create production and distribution plans that are designed to meet customer commitments,” Leo says. “But those plans will not be accurate unless the business systems know exactly what is happening on the plant floor. Business systems generally operate on the assumption that a plant has the capacity to make so many parts, but they have no way of knowing how many machines are down or how many workers are out at any given time.” It has been said that nearly 70 percent of new ERP implementations fail to

return the expected benefits. One reason enables service and partner capabilities for these failures is because companies that make up key elements of the total are not integrating plant-floor informa- solution. The foundation for Intellution tion with business systems. Leo contin- Dynamics is iCore, based on Microsoft’s ues, “That data is always going to be DNA architecture for connecting objectlate, or not available at all, which oriented software components. increases the chances for mistakes in planning. If you can transfer plant-floor Intellution Dynamics family information into your ERP system autoTwo primary component solutions in matically, you have created a the Intellution Dynamics streamlined production and manfamily are iFIX and agement system that will iBatch. The former is a improve the overall efficiency of human-machine interface your business.” and supervisory control Intellution has a complete famand data acquisition ily of solutions that manufacturers application, and the latter can use to build a solid foundation is a solution for automatfor enterprise integration. Its flaged control and monitoring ship offering, Intellution Dynamof batch-manufacturing ics, provides all of the functional- Steve Rubin, processes. ity necessary for automating, President, and CEO The Intellution DynaIntellution monitoring, and controlling mics family also includes plant-floor operations, as well as for iWebServer, an application that allows establishing bi-directional data trans- for viewing data and graphics through mission throughout the enterprise. It also Web browsers.

Dow Corning standardizes on plant-floor integration worldwide Intellution provides technology, support for global production, customer service standards Dow Corning was looking for a vendor that could provide worldwide support—as well as world-class technology—when it embarked on a mission to have all of its plants around the globe adhere to standard production processes. This project, launched in 1997, was part of an overall Dow Corning initiative to improve its ability to leverage corporate assets by using common processes, equipment, and suppliers as much as possible at all of its locations. The goal was to make it possible for the various Dow Corning plants to share information, and at times personnel, according to John Plowdrey, coordinator of Dow Corning’s Process Information and Control Technology Center. Dow Corning, based in Midland, Mich., is a global supplier of chemicals used in a wide range of manufacturing processes. Plowdrey says the reason for standardizing production processes was to enable Dow Corning to satisfy global demand for its products from any one of its 10 plants scattered around the world.

Powdery says Intellution, Norwood, Mass., met Dow Corning’s criteria as the primary technology supplier for this project for two reasons—the open nature of its Intellution Dynamics family of industrial automation solutions and its willingness to go the extra mile in providing support. A major benefit of the system is that plant managers use its data historian to monitor and analyze on-going operations, anywhere in the world. Dow Corning needed its industrial automation platform to have an open architecture because it wanted all of its plants to be able to adhere to standard production processes without having to scrap their existing plantfloor control devices. “The plants were allowed to stick with their existing programmable logic control (PLC) standards so that we didn’t have to spend a lot of money replacing all of that hardware,” Plowdrey says. “Intellution offered a solution that we could run on top of all of the different PLCs.” The issue of support was even more

3A February, 2000 http://www.manufacturingsystems.com

critical, Plowdrey says, because each of the plants had different levels of technical expertise. “Intellution was the only supplier that was willing to go in and really understand the needs of each of our individual plants,” he says. “They actually went in with us to each location to determine whether that plant needed only sales support, if they needed an integrator to help them set up the system, or if they were going to need day-to-day technical support after the system was installed.” Intellution’s commitment to supporting the individual plants even helped to resolve an initial “lukewarm response” to the standardization initiative in Europe, where some of the plants were having to switch from vendors that had a heavy local presence. “Intellution sent a support group over there with us to go through a couple of implementations to prove the system,” Plowdrey says. “And they are showing the new plants that they have the support they need to not only get things installed, but to keep them running smoothly after they are installed.”

FOR MORE INFORMATION , VISIT WWW.INTELLUTION.COM/OPTIMIZE Intellution recently developed another application based on Microsoft technology that makes data transfer even easier. This tool, called VisiconX, uses Microsoft ADO (asynchronous data object) technology. It allows users to grab and organize data from any relational database within an enterprise. “VisiconX will enable users to connect plant-floor systems with corporate IT databases, in real time, without writing any programs,” Rubin says. “It also gives plant engineers and IT people the tools to put data into special formats without any programming. Sometimes plant floor people might want to look at something as a bar graph, while managers might want to see it as a numeric value. This allows each side to get information in the format they choose.” The solutions within the Intellution Dynamics family can function as part of a single integrated system or as a series of standalone software components. In

Currently, Plowdrey says the standardization project is roughly 85 percent complete. Intellution Dynamics iFI Xsupervisory control and data acquisition (SCADA) is now running in all of Dow Corning’s SCADA plants. Most of the plants are also using the Intellution Dynamics Advanced Historian to view and analyze the data that is being collected by the SCADA solution. Plowdrey says plant managers use the historian as their primary means of monitoring minute-by-minute activities at their individual facilities. Dow Corning’s corporate executives can also plug into an historian from their desks in Midland, and get a real-time view of what is happening at any of the plants around the world. “Every now and then someone from Midland will send a note out to an individual plant over the corporate network asking for clarification on some data they have seen through the historian’s interface,” Plowdrey says. Dow Corning is now in the process of rolling out Intellution Dynamics iBatch solution at all of its plants to put the finishing touches on its

addition to its leading-edge technology, Intellution has the expertise to help manufacturers tackle the many issues associated with integrating shop-floor and business information systems. With more than 100,000 installations worldwide, including three out of four Fortune 100 companies, Intellution is monitoring and controlling plant-floor operations in virtually every industry across the globe. Seamless integration “Our real expertise has always been developing solutions, most often entailing the integration of devices, data, and applications,” Rubin says. “The devices are often proprietary, with different data formats, and we’ve become expert in developing the application interfaces needed for seamless data integration. Now that more manufacturers are recognizing the inherent value in having access to real-time plant-

floor data, our entire focus as a company has expanded.” Rubin says Intellution recently has been involved in a number of projects that forged tighter bonds among the people as well as the systems within an organization, and he expects that to happen more often as more companies adapt their business models to fit the new economy. “Historically, companies have had IT departments that focused on technology for managing the financial and administrative aspects of the business, and only the people directly involved in manufacturing worried much about what was happening on the plant floor,” Rubin says. “As the world becomes more competitive, manufacturers must be agile enough to respond quickly to unplanned,

production standardization project. Plowdrey says an early assessment of the return on investment from this project includes the ability Standardized technology platforms worldwide allow Dow to install and change Corning to share information and personnel among 10 plants production processes in a on several continents. (Photo courtesy Dow Corning) shorter period of time, as well as a greater level of Plowdrey says tests have proven there information sharing between plants, is value in having that connection. which was one of the major goals at the Keeping track of how much raw outset of the project. materials as well as what types and This project also is helping to amounts of finished goods are available eliminate Dow Corning’s concerns at each location at any given time about customer service. “Our customers would give Dow Corning the flexibility are demanding more information about to always be ready to meet global our production processes, and we are demand for its products. “If we had a now able to provide it,” Plowdrey says. shortage of a certain product in Asia,” “Some of our larger customers come Plowdrey says, “we could look to the right in and ask to see our critical U.S. and Europe and immediately see production parameters and how we are which location had either the available tracking them.” inventory or the raw materials on hand Once all plants are running standard to fill that order.” production processes, Dow Corning Plowdrey also is confident that the wants to begin feeding real-time plant-floor to ERP system links will be production data to its corporate fairly easy to implement because the enterprise resources planning (ERP) Intellution Dynamics family of industrial system, which is the R/3 package automation solutions has provided the from SAP AG, Waldorf, Germany. perfect foundation for that connection. http://www.manufacturingsystems.com February, 2000 4A

and often unpredictable, changes in the marketplace. Those changes could be anything from a major macroeconomic shift to a simple change in individual buyer preferences.” Partnerships & programs Over the past year, Intellution has forged a series of strategic partnerships designed to ensure that all of its customers have access to best-in-class

solutions suited for all enterprise levels and vertical industry segments. One set of partners is a group of strategically chosen manufacturing execution system (MES) vendors. In general, MESs—which began as proprietary interfaces for enterprise integration—today provide a level of functionality specific to one or more vertical industry segment. The partnerships reflect Intellution’s philosophy that companies should

always be free to choose the best individual solution for their business needs. “We have partnered with the providers of the best MES solutions for each of our vertical markets,” Rubin says. Intellution’s MES partners, chosen for their expertise in important vertical markets, offer systems that track and manage parameters most important to companies in those markets. One partner, CIMNET, Robesonia, Pa., provides MES functionality for companies

COO in the know Axle maker finds Intellution platform is ideal solution for the new economy American Axle Corp. integrated its plant-floor and business information systems because its management realizes that the key to satisfying customers is the same in the new economy as it was in the old one—consistent on-time delivery of high-quality goods. American Axle, based in Detroit, is the primary supplier of axles and other wheel components for General Motors trucks. “Our job is providing GM parts with zero defects and 100-percent on-time delivery, and our manufacturing operation is the key to making that happen,” says Fran Leo of IIG, and integrator of American Axle’s factory information systems. “That philosophy starts with the CEO. He sees manufacturing as the core business process, with everything else being a service that helps us to manage the manufacturing operation properly.” Adherence to that philosophy led American Axle to build an enterprise information system that allows everyone in the company to know at any given moment exactly what is happening on the factory floor. “The system is available on every desktop,” Leo says. “I can look in at any time and see that we may be falling behind schedule on a line that makes shafts or another line that produces gears. That allows us to immediately deploy resources to get back on track and make sure we are meeting commitments to our customers.” In building this system, American Axle took full advantage of the initiatives that Intellution, Norwood, Mass., has undertaken to help manufacturers link plant-floor and

business information systems in a manner that meets their unique business needs. The system is anchored by the iFix supervisory control and data acquisition (SCADA) program that is part of the Intellution Dynamics family of industrial automation solutions. This SCADA program collects data related to the efficiency of each piece of production equipment in American Axle’s plant. In total, the system takes readings from more than 500 different plant-floor control devices. Some of that data is transferred to the statistical process control (SPC) module of a manufacturing execution system (MES) provided by CIMNET, Robesonia, Pa., one of Intellution’s strategic business partners. Intellution has established alliances with several MES suppliers specifically to address the needs of companies like American Axle that want MES solutions that provide functionality for their particular vertical markets. CIMNET’s system is designed for companies in the automotive industry. Intellution also has MES partners that offer specific functionality for semiconductor and high-tech manufacturers as well as for the pharmaceutical and food & beverage industries. Real-time information from both the SCADA and MES systems—as well as from American Axle’s Oracle Applications ERP system—can be accessed through Intellution software. The system is used by everyone from the operators on the plant floor to the COO, who likes to stay apprised of whether the factory is producing the required number of parts to meet

5A February, 2000 http://www.manufacturingsystems.com

current customer orders as well as how much production capacity is available for new orders. Other benefits include better ability to diagnose problems with production equipment. “One of the key things we are now able to do is cycle-time analysis,” Leo says. “A typical cycletime drop will only be a few seconds. That doesn’t sound like a lot of time, but in a high-volume production environment like ours, every second translates into a lot of money. When the entire run cycle for an operation is only eight to 13 seconds, losing two or three seconds makes a big difference. Also, having one machine down can cause others to have to stop, which lowers our overall throughput. Savings like that make this whole system pay for itself.” Leo says the open nature of Intellution’s technology made it easy to meld all of these different applications into a cohesive business information system. “When we started this project, we looked at several SCADA packages and found Intellution’s architecture would be easiest to install and maintain,” Leo recalls. “It allows us to run our system completely on PCs. The entire network operates on Microsoft’s Window NT, and every piece of software is an offthe-shelf standard package without any modifications. “You need these capabilities to run a manufacturing operation today, because things are changing constantly. You need systems that allow you to make change quickly, and in a way that ensures that everyone will continue to get the data they need.”

FOR MORE INFORMATION , VISIT WWW.INTELLUTION.COM/OPTIMIZE in the automotive and discrete industries. Camstar Systems, Campbell, Calif., in its work with Intellution, has products ideal for manufacturers of semiconductors and other high-tech products. In like fashion, Realtime Info Systems, Butler, N.J., serves the food and beverage industry, and POMS Corp., Herndon, Va., works with companies that make pharmeceuticals or food and beverages. In addition to the MES strategic alliance program, Intellution developed its Enterprise Integrators program, which includes an alliance with leading systems integration firm Computer Sciences Corp. (CSC), El Segundo, Calif., well known for helping manufacturers meld business systems with shop-floor applications. CSC is helping Intellution spread its message on the value of real-time plant floor data within corporate IT departments. Introducing new technology The technology changes driving the new economy are drawing plant floors and supply chains together. As a consequence, perhaps for the first time, engineers and IT types are actually speaking the same language. Rubin says that the dominance of Windows NT on plant floors, and the component technology embodied in iCore, based on Microsoft’s Distributed interNet Applications (DNA) architecture, means that IT specialists understand intuitively how integration can be achieved. They also know it’s eminently doable, whether the enterprise architecture is Microsoft or Unixbased. Add to the mix cost-effective means for integration via increasingly pervasive Internet technologies, and the goal of real-time information sharing becomes real. The Intellution’s Dynamics family is designed to function in concert with these new technologies, as well as any others that might emerge in the future. The system’s inherent expandability can be traced directly to its underlying technology, starting with its component architecture. The entire Intellution Dynamics

The interrelationships among applications commonly used in manufacturing enterprises is complex. But the benefits of integrated manufacturing, and the resulting information sharing, are significant. Source: Intellution

family is built on the open technology platform called iCore, which is essentially the supporting structure for linking individual software components. David Nelson, an Intellution vice president, refers to iCore as a “plug-andsolve” foundation because it enables the seamless integration of any software components a company needs to use—either from Intellution or other vendors—in order to create the ideal automation solution for their particular business. The iCore foundation also is the major piece of technology that allows Intellution’s software components to be linked tightly enough with business applications to permit the transfer of real-time plant-floor data. Nelson says iCore allows diverse applications to seamlessly integrate because it is based on Microsoft’s DNA architecture, which includes a set of tools that have come to be recognized as industry standard devices for connecting object-oriented software components. These tools include the Visual Basic for Applications development environment, object linking and embedding for process control, component object model standards, and Active X controls. Rubin says Intellution relies heavily on Microsoft technology because it enhances the value that manufacturers derive from using Intellution’s applications. “Microsoft standards are important because so many users and

software suppliers have adopted them,” Rubin says. “That fact alone opens up a wealth of new applications that can be brought into the manufacturing domain quickly and easily.” Conclusion Even the most casual reader will by now have concluded that exciting opportunities exist for forging supply chain solutions by means of better integration at all levels of the enterprise, including the plant floor. And after reading the case study profiles found in this supplement, one cannot help but be struck by how quickly the manufacturing landscape is changing. Given this dramatic set of circumstances, the next step maybe to ask, “What do I do now?” The answer is simple. Think about how these changes are going to affect your organization. Meet and discuss with others what needs to be accomplished. Define the scenario that will help ensure competitiveness and success. For help with this, visit the Web pages built in support of this special supplement, at www.intellution.com/optimize. There you will learn further and in greater detail about relevant case study examples and technology product solutions, as well as being able to source white papers and other materials concerning technology infrastructures and management concepts for integrated manufacturing. Then call Intellution at (781) 769-8878.

http://www.manufacturingsystems.com February, 2000 6A