Leveraging Plant Assets for Competitive Advantage through Enterprise Recipe Management
Companies that rely on batch processing have installed sophisticated control and information systems that can deliver major competitive advantages in the form of faster time to market, better return on assets, and higher quality products. However, realization of these benefits depends on the ability of ERP systems to communicate effectively with plant-floor control systems.
Enterprise Recipe Management systems provide an off-the-shelf solution to this challenge and are helping users meet and exceed their customers' demands while strengthening their own bottom-line results.
•Introduction
•The Automation Gap
•The Golden Thread
•Benefits
•Summary
Introduction
Every day, around the world, manufacturers strive to maintain their edge in an increasingly competitive marketplace. To do so, they must be able to quickly and efficiently develop their products, produce them and get them to the markets in which they'll have a quick—and profitable—impact. Process manufacturers continually face questions such as these:
In essence, however, all of these people in these diverse industries are asking the same question: "How can I most effectively leverage the physical and intellectual assets of my company as strategic tools for competitive advantage and greater profit?"
The tools to achieve these ends are readily available. On the plant floor, automated control systems are ubiquitous. In companies that produce food and beverages, specialty chemicals, pharmaceuticals and consumer packaged goods those systems are governed by batch automation software that executes site-specific recipes for products.
Higher in the organization, Enterprise Resource Planning (ERP) systems are rapidly being put in place to manage production planning and scheduling, order management, inventory management, financials and a host of other functions.
While the term "ERP" was all but unknown just a few years ago, today companies are eagerly adopting these systems to standardize functions throughout their businesses on a common platform. AMR Research, Inc. (Scottsdale, AZ), a leading industry and market analysis firm specializing in enterprise applications and enabling technologies, recently predicted that through 2002 the ERP software market will grow at a compound annual rate of 37%.
Until recently, however, manufacturers have not been able to "close the loop" between these two automation domains. There simply has not been an off-the-shelf, configurable way for ERP systems to feed data directly into batch control systems about which products the plant needed to make, when it needed to make them and detailed instructions on how to make them.
Conversely, control systems have not been able to automatically upload information to the business management systems on how much product was made, how much raw material was expended, which lot numbers were actually used, the availability of plant equipment and other data critical to making timely and accurate business decisions.
Sequencia (Phoenix, AZ) has dubbed the class of applications for filling the gap as "Enterprise Recipe Management". We firmly believe that forward-looking companies that adopt the Enterprise Recipe Management solutions will be arming themselves with the tools to make best use of their assets and will be markedly increasing their opportunities for success in the marketplace.
Most manufacturers have two critical assets at their core: What they make and how they make it. At one time, a company's plants and equipment might have been thought as at least equally important as the products that it manufactured. But in this age of rapid acquisition, divestiture and outsourcing, it has become increasingly apparent that physical infrastructure is only a means to an end—the products themselves.
In the case of many companies—particularly those where success hinges on their brand names—the unique recipes and methods of manufacturing their products define the enterprise itself. Leveraging this intellectual property to best advantage involves these essential challenges:
To better understand the problem, we must examine the way recipes and process data are managed in typical batch manufacturing plants.
The standards for batch process automation define four major categories of recipes:
In the past, these recipes had to be managed at all four levels, a process that involved such manual time-consuming tasks as:
Most companies have thousands of recipes, and many have tens of thousands, so their maintenance represents considerable expense.
In addition to the maintenance problem, the historic batch architecture raises concerns about security, since a company's valuable intellectual property—the instructions for how to make its products—are stored on control systems in plants throughout the world. In an era in which plants are regularly acquired and divested, or where manufacturing is outsourced to a third party, the intellectual property represented by the recipes could be at risk.
Prior to the manufacture of a product, the recipe must be sent from the ERP system, transformed into instructions that an individual plant system can understand and entered into the control system. Ideally, this would be a relatively simple automated data "handoff" between systems. However, the systems have fundamentally different views of the business and rely on different data structures. ERP systems view the business in terms of discrete transactions (such as distinct customer orders), while plant-floor control systems view the business as ongoing processes, generating thousands of points of data per second which are used to keep the process in control. Consequently, translating general recipes into site and master recipes has been a manual operation, involving the rekeying of instructions into different systems by highly paid engineers.
Following the production run, production data typically is manually entered into the ERP system from the plant floor, providing business managers with decision-making data. Ideally, the data is entered into while the production run is taking place, but in reality, it can be hours or even days before plant operators or additional clerical personnel get around to the task. Consequently, critical data in the ERP system, such as inventories and availability of raw material, do not necessarily reflect the reality of the situation. Since many companies, particularly in the specialty chemical business, make product 24 hours per day, seven days per week, such discrepancies are no small matter. This becomes particularly bad when production runs last several days or weeks.
Enterprise Recipe Management dramatically reduces the problems inherent in batch-based businesses by providing the "golden thread" that integrates plant-level systems and ERP systems by transforming, filtering and synchronizing the information between them.
Sequencia's enterprise suite of software is the industry's first Enterprise Recipe Management suite and provides the blueprints for how such systems should function. Rather than acting as a full-scale, overhead-laden automation level, Sequencia Production Manager fills in the gaps that exist between ERP and batch control systems while avoiding duplication of their functions.
Production Manager is designed to tie together Sequencia's OpenBatch software for plant-floor batch control and SAP's R/3 ERP suite. It will also tie OpenBatch to SAP's R/2 system (or to other vendors' ERP systems).
Production Manager, the transformation engine for production orders, is the first available module of Sequencia's enterprise suite. Once R/3's PP-PI module creates a process order (a high-level description of the products required, the materials needed, the quantities, and the timing of the order) Production Manager takes the information and translates it into a detailed combination of a particular Master Recipe and its associated parameter data. The system then relays the recipe to the OpenBatch system on the plant floor for execution.
During the batch execution, OpenBatch generates extensive data on the progress of the production order. Production Manager filters this data—maintaining only what is of use in the ERP system—translates it into terms that the ERP system understands, and automatically uploads it to the ERP system. Thus, the loop is completed automatically, without the need for manual intervention.
Depending on the company's needs, batch data can be spooled and retained by the remote plant control system and uploaded to the corporate ERP system periodically, or a constant connection with the ERP system can be maintained, so that data can be sent back in a steady, real-time stream. If the connection between the ERP and process control system is severed for some reason, Production Manager will retain the data and upload it to the ERP system when the connection is reestablished. Thus, the manufacturing is able to continue with integrity even if the ERP system is temporarily not functioning.
By embracing Enterprise Recipe Management as an essential strategic weapon in their competitive arsenals, companies can realize the following benefits:
Companies that rely on flexible processing have installed sophisticated control and information systems that can deliver major competitive advantages in the form of faster time to market, better return on assets, and higher quality products. However, realization of these benefits depends on the ability of ERP systems to synchronize effectively with plant-floor control systems. Enterprise Recipe Management systems provide an off-the-shelf solution to this challenge and are helping users meet and exceed their customers' demands while strengthening their own bottom-line results.
For more information contact Sequencia Corp., 15458-B North 28th Ave., Phoenix, AZ 85053. Tel: 602-896-3700; Fax: 602-896-3896.