Managing Variation is Corner Stone of Operational Growth but Requirements Platforms

I wrote about this 2 months ago, but seem to have spent the last two weeks talking and working through this “managing of Variability/ variation” as key. Too many people said that you are forcing standards, but these only come once you have a platform of abstraction on top of variation you want manage or accommodate.

 “How do you manage this Variability, so that production consistency, agility and increased production output are achieved?”   While the concept of everything being a standard would be great, it is not practical and there are variability’s that we must “manage” and others we must “accommodate”.

 “Standardization is not a business goal – it is a means to an end. 

The goal of business is to make a profit.”

                                                             - Continuous Improvement Leader

Thus, any standardization effort must distinguish between the different types of variety in a way that maximizes profit without constraining the business strategy. Thus, the business challenge can be summed up (using the mining example illustrated in the above) as follows:

1. Mastering necessary variety: When running a mine or plant, such things as Ore Body quality (raw material quality) that varies not according to the ideal plan. Breakdowns of equipment, weather like hurricanes/ cyclones disrupt ports and operations, tides effect ships coming into ports. These are “necessary variability” that all must be “mastered” to optimize production, operations, and you need to put systems in that allow you change plans and strategies as required. I had one workshop last week where the team was looking at long term strategies in the traditional sense. They had not adjusted their thinking to a long term strategy now has to make of shorter operational plans that can be adjusted in “near real-time” due to “master” these “necessary” variability. The operational systems must empower all people to be planners in their time span, to empower actionable decisions that are related to achieving the bigger strategy, and clear impact is understood.  As products, deliverables change and vary more regularly, plans will become shorter and increased volume of plans to achieve a business strategy.
2. Accommodating unavoidable variety: Situations like different automation vendors or implementations across equipment, processes and sites. It is impractical to think a company can acquire new or existing equipment and processes and expect a particular PLC or automation system, the OEM equipment suppliers just make the change to cost prohibitive. In order for companies to grow and be agile, they must “accommodate” natural variety from equipment suppliers, existing sites, but be able to apply their operational standards/ processes across the different equipment.  Another area that that limits operational excellence is the different “experience” levels of the workforce, from shift to shift, from site to site. The operational systems must abstract operational/ or site experience by embedding operational procedures/ actions into the system providing a guidance and consistency of operational decision and action. This starts to generalize the workforce experience enabling significant operational workforce flexibility between sites, and hiring, addressing the challenges of workforce / skill shortage.
3. Eliminating unnecessary variety: Anything other than the above two scenarios would be eligible for standardization.

It is NOT about “rip and replace with standards it is about “mastering and accommodating” these variations while enabling operational excellence growth and continuity by applying operational standards across this variability. Key is “platform strategies” that abstract the variability and can absorb variability while provide a platform for services that enable standards to be built on. Providing the architecture for “sustainable innovation” through managed standards that can evolve over time. Standards can be operational models in supervisory for alignment of context and structure, as well as operational actions to guide users through tasks in a consistent way. Also, configuration of control strategies should be over multiple vendors, where common control standards for process can be deployed over multiple controllers but managed in structured way.

Does this mean one platform? NO, not for the industrial landscape different layers of the industrial operations landscape have different roles. Providing different services and different ability to absorb a variety, but the common services between these platforms must enable them to “tightly aligned but loosely coupled”.

As we have pointed out the key to success in this dynamic but changing world is the ability to “Master Necessary Variety” in your business, while “Accommodating Unavoidable Variation”. Providing a structure to acquire new “brownfield plants” accommodate their existing automation and process. But apply the new companies’ differentiation through applying their operational procedures across these acquired plants.

This is not a new concept, but I seem to explain it a lot now days!!!!

The Paradox of the Growing Trend of Increasing Complexity in Industrial/Operational Solutions

I was discussing with a customer this week their systems, solutions, what was being asked of his team, and how even on a medium sized business and mature production processes the solution complexity is growing. He talked about the continued pressure of audits, regulations to satisfy government and just the consumer, combined with an increasing rate of " new product introduction" (npi). Yet production agility, timely actionable decisions, demands real time transparency into production, and across the supply chain.

Over two pots of tea we mapped out a high level functional landscape, his comment what happened to traditional  solutions. His comment was valid as the traditional supervisory solutions of 10 years ago, had transformed on the paper in front of us to "operational management architecture". With now an architectural landscape that connects to:

1.       Multiple vendor controllers and smart devices from ever increasing intelligent process equipment

2.       The range of people with different roles is increasing, in this example we have 8 different roles interacting with the solution, and taking actionable decisions

3.       The location of these people has shifted from the control room to every where, eg in the control room, roaming the plant floor, roaming the office, working remote outside the plant.

4.       Multiple applications that the system interacts with, has gone from to 7 This is not a big system, yes it is a batch system, but now cyber security, data transformation to deliver the correct trusted information for a role is available.

So complexity is increasing but the outlook is this will not change that business  will continue to demand more interactive, real times, collaborative, and transparent solutions in order to maintain competitiveness.

As seen below from an interview in North America, note the % of skilled and highly skilled roles, and the future additions of roles is in this skilled and highly skilled area:

So the complexity grows at a time when we have a transition to a less experience workforce, that will be in constant state of learning, and dynamic nature. In the conversation we talked about the team on his site, that he now had 50+ experienced and a junior engineer in his 20s. Fully capable but different, and less experienced on a site and role.

The diagram below shows the same people when trying to fill these skilled and highly skilled roles.

This is the paradox of today's dilemma facing engineers and operations, combine this with the demand projects with shorter project time, and that the system will evolve.

Now the control on the prices systems has not dramatically increased this is well defined and mature, it is the ability to absorb change that is key.

As we concluded our second pot of tea, it was clear the need to shift away from customer, home built solutions, away from customer excel sheets, to "off the shelf" solutions products that interact, can be easily configured and provide intuitive use, and learning, on an architecture that absorbs evolution and change. The discussion shifted to how transform their internal resources from internal customer code creation, to configuration, and acceleration of a more expansive solution building on their skill and knowledge.

The key walk away from this conversation, and why I shared it, was the realization by the customer that his approach to projects, and direction of addressing demands from operations needed a rethink in their approach, and using of existing staff, especially with the key experienced staff, and development of new staff. This included looking outside their own industry to potential significant advancements in addressing common operational approaches.