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 Industrial Software space continues to outgrow its labels!!!!

As the 2014 draws to a close, I seem to be sitting in a growing amount of long term strategic meetings both within Schneider-Electric and within customers and discussing the landscape of 2020 -2025. What immediately happens is the labels we have used for years for products, spaces, and roles no longer mean the same thing. We rapidly find ourselves setting up a glossary of labels and what they will mean in 2020-25 in order to gain alignment.

Putting a label on this space has been challenging because it has evolved over the last 20 years and will continue to change as many technologies converge towards an integrated industrial software platform strategy.

1990 - 2010: The label “MES” was first introduced in 1990 to refer to a point application at a single site (typically Quality Management). Over the next 20 years, more functionality was added to MES to keep pace with Automation trends.

2010-2015: In recognizing its evolution, some industry analysts have offered new acronyms like MOM (LNS Research), while others have redefined MES as follows:

“For many, MES is no longer a point application, but a platform that serves a dual purpose: integrating multiple business processes within a site and across the manufacturing network, and creating an enterprise manufacturing execution capability.”

-          Gartner Group, Vendor Guide for MES 2012

Today/Tomorrow: As the industrial computing paradigm shifts to the internet, the platform is now being leveraged for other assets distributed across the interconnected value chain while extending the rich optimization functionality via new applications to get more productivity in areas outside of manufacturing. This platform maybe on premise but is rapidly growing to been a hybrid of on premise and “off premise” (cloud) solutions that enabled the shift to “managed Solutions” with standards. Required to gain consistency, and transparency across the value generating assets.

We started to see this transformation in early 2000s when a simple activity such as Performance /OEE on a packaging line became dramatically more complex. A different solution when it went from one line to many lines on a plant, and then the same standards, downtime reasons across 100s of lines over multiple plants. It was then that I realized in the meetings internally I could not use the word MES generically and needed to become specific.

Another area we finding this is around the HMI (human machine interface) traditionally it was a window into my process/ PLC and that is what InTouch was famous for. Again in internal meetings and with customers I struggle when they use the term as we have completely different functions in the operational experience been referred too. The diagram below shows the landscape we face in Operational Experiences today in a typical industrial company; they are all often referred to as HMI.

Just last we in a design meeting we were defining the strategy for certain notifications to brought to attention. The architectural suggestion was to have the advanced asset application send events to platform alarm and event system; this will expose them across the enterprise. This is the correct answer, but people struggled with it as they had in their mind HMI/ Supervisory, yet when defining the approach I was not thinking supervisory. I was thinking roles and that operational planning, asset planning roles require these notifications. By putting them on the common event bus, they could be picked up their interface which is filtered for these events, or by workflow so that procedure who notify them.

Again it was simple case of labels and peoples understanding of labels, when we ended up on the white board it all became clear.  

  

In the diagram above a Process HMI is a basic screen with alarms typical of InTouch, this very different to Site based system which requires process awareness, alarms, but operational data such as asset state, production schedule, log books etc.

 It is much easier to avoid labels and define the situation. scenario / role, and start the meeting or strategy session laying out the landscape for discussion, gain alignment on the “desired outcome” and destination first, it makes it easier!!!!

Mastering Variety in Industrial Production, Issues a Challenge for Industrial Architectures and Drives the Requirement for Platform Strategies

For many businesses, variety (or choice) is core to the strategy where its effect cascades down to the execution level (as well as upstream in the B2B value chain.) The operational challenge of variety (or variability) is that it can create waste and inhibit velocity. The challenge and opportunity is with companies, especially as they move to unified value chains (multi plant manufacturing). “How do you manage this Variability, so that production consistency, agility and increased production output are achieved?”

“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 Food & Beverage example illustrated on the above) as follows:

• Mastering necessary variety: More brand choices drive the number of order line items (SKUs) and master recipes, which in turn drive the resulting plant-level recipes that must accommodate the variations in process equipment as well as ingredients. This type of variety is necessary and must be mastered in order to survive and succeed against the competition. Other “necessary variability” are material composition variance from different suppliers or regions, raw materials will vary. Location delivery in skus due to language, for example, the same product will have to be delivered to different countries in different language or different quality requirements. All must be mastered to optimized production.

• Accommodating unavoidable variety: Situations like M&A make it difficult to standardize on any single automation vendor, where “rip-and-replace” isn’t economically viable despite engineering’s desire for a more homogeneous environment. The growing one in this area is the “changing workforce” how do have a system that can accommodate a changing, (rotating) workforce while maintaining timely decisions and consistency in actions.

• Eliminating unnecessary variety: Anything other than the above two scenarios would be eligible for standardization.

This challenge is driving companies to adopting “platform strategies” that abstract the variability and can absorb variability while provide a platform of services that enable standards to be built on. Providing the architecture for “sustainable innovation” through managed standards that can evolve over time. The word of 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 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”, eliminating all other variation for efficiency.

Food for thought!