Operations Innovation & Transformation – Fleet Management

We saw the expansion of control system, operation system extending beyond the fall walls of plant(fixed plant), in mining, oil and Gas, and Food and Beverage, and a month into this year we have this trend growing. The challenge being placed is how can we bring, apply the same approach found on fixed plant to fleet, or mobile plant. This blog takes a look at the network of fleet management across plants, next week we need to move to mobile plant.

  

The 4 quadrants described in the article “Operations Innovation & Transformation – the 4 Types” positions the lower left quadrant as a strategy for using a “fleet” of physical assets in a new way.

In this quadrant, a group of similar industrial operations (2 or more) adapt their performance objectives, business processes and accompanying hiring and information strategies to optimize the “fleet”.  The move is to unifying the industrial enterprise over multiple sites (in groups or as a whole), with a more holistic view in terms of operating strategy and performance management.

This innovation can be limited by the distribution flexibility among the locations, but several corporations have achieved success with this.  One example is keeping most of the locations operating at a constant or “base” portion of the combined market demand, and using the more agile locations to deliver the “swing” or variable portion of the demand.  Another example is allowing all locations to serve their local markets without contribution from any other of the “fleet”, but they all adapt their operations to meet a shared performance objective, such as yield or efficiency.

A key method used to sustain this strategy is the increased automation of work.  This is a significant step beyond scorecards, dashboards or rigid workflows.  The following 2 examples show how real-time performance measures (different from traditional KPI’s) and proactive procedural automation sustain this differentiation:

•  A “fleet” of similar industrial operations have some distribution flexibility so that they can deliver a portion of each other’s market demand.  Each operation delivery point and each operating shift for that segment are benchmarked with the others, and all delivery points and their shift performance carry a real-time performance score.  Some delivery points are more agile, and some operator shifts have fewer errors than others (quality, over/under delivering, reworks).

Coordinators (different industries have different names for this function) use workflows to negotiate upcoming changes in demand and the operating shift and the coordinators use the same visual demand, using a “tram line” display.  Information to the right of the center dashed line is forecast and planned.

•          A “fleet” of similar industrial operations within a single location or nearby locations has distribution flexibility, but they only share in real-time benchmarking (such as efficiency) and online performance guidance.  The following is an example when all physical assets are used, with equal output at this point in time:

• All of the physical assets share real-time benchmarking performance on efficiency and availability.  Now consider what can happen differently when supply or demand changes suddenly, such as an unplanned outage within the industrial operation or within a client’s operation:

In the left-hand diagram, losing capacity can cause all of the “fleet” to shut down, if fast and accurate guidance isn’t available and used to either import capacity (if feasible) or negotiate reductions in demand with one or more of the customers.

In the right-hand diagram, a client’s unplanned outage causes some or all of the “fleet” to operate in zones which might be unstable and trigger unplanned outages, if fast and accurate guidance isn’t available and used to either shut down one of the physical assets or export some of the product (at a discounted price).

Composite Frameworks What are They, the shift to Model Driven vs Custom: How do they Play?

As we look at MES and Operational solutions the role of the consistent operational execution and experience is key to achieving operational consistency. No matter the product at the back end the "operational experience" must be role based and transverse the products in the back end, and transform the experience from application configuration to "task/activity" based experience.

Traditionally companies have built User Interfaces to an API, with the calls needed to execution actions and transactions; these have worked well especially within a plant. But a key to operational systems being effective and agile is their ability to adapt on a regular basis, this requires a sustainable and evolving system. This is especially important in form/ transaction activities where information is provided and where actions/ data input, and procedures  that need to be carried out. But the challengers of operational procedures:

1. Operational Process cross-over functional domains and applications
2. Lack of governance
3. AgilityResponsive manufacturing business processes
4. Increase the performance of their people assets
5. Too much Custom Code, making it unmanageable and evolutionary

So like the Business System who started introduce BPM (Business Process Modeling) leading companies in the industrial space are looking and asking why they cannot apply the same techniques in the Industrial/ production sector.

There is no reason why not! Yes the time line is more real time, triggers are real-time, and we many roles with different time dimensions. But this also aligns with what the industrial world is very comfortable world with that of “stable in control loops” we do this in automation with feedback (information) and correction (actionable procedures), what we are looking at are “operational loops”.

Providing a graphical configuration environment for the capture and defining of operational process including the validation of data input, and guide actions, working inline with the user Interface/ forms etc. Providing a framework for building of reusable forms, and reusable procedures that can be managed as templates and standards to enforce consistent operational practices. Empowering the operational domain people to develop, evolve and manage their procedures.

Most of all empowering the different roles in the plant, that operational close loop moving to an “activity” centric system where information, and action is driven from a consistent operational model and practices.

Does the concept of Con-Current Licensing have a place in modern Operational Solutions?

Concurrency licensing has always been a request for clients, especially in reporting and view clients. Allowing the “pooling” of a set of licenses that are used on a first come basis. Often a very effective way of buying licenses at usage cost.

This makes a lot of sense in the transitional systems and architectures where people really only accessed the system when at work and within the 8 to 5 pm working day.

But a discussion last week with a customer who struggling with the shift to people being connected “all the time” thru their mobile devices and even connected when at home. Even if they not working, the new generation under 45 expect to be able to go online, and connect to the plant, system and access some “insight” to make or support a  decision. They do not expect to go online and find a message that there are no available licenses, wait for someone to free up a license.

The IT department is still asking for con-currency as a cost effective way of buying licenses, but the operational officer I talking with was struggling with the reality that they needed the “Named User” license allocated to a person no matter where he is and allowing the user to be connected to multiple devices at the same time.

Another challenge with the traditional licensing he is finding is that the users do not logout, or disconnect before leaving work, so their desktop at work is still connected, but now they are remote in the plant, or outside the plant and need to access thru their mobile. So the modern approach needs to apply of allowing multiple connections for a user at any one time.

What fascinated me was that this was reality, we have been going down this path for a while, expecting the change, and it was interesting that this customer wanted to talk about new models, to suite the new world.  

Food for thought as you design the new "operational System". 

Closing the “Last Mile” of Efficiency

Performance Management holds different priorities for corporate management and plant-level stakeholders. Corporate stakeholders tend to emphasize technologies that provide visibility so they care more about the “I” as in Manufacturing “Information” Systems. In contrast, plant-level stakeholders tend to emphasize technologies that provide control so they care about the “E” as in Manufacturing “Execution” Systems (MES) capabilities. These two perspectives converge when both stakeholders realize the need for an integrated approach to tackle the “last mile of efficiency.”

What we have observed is that the vast majority of companies have put in place good practices. Although many of these practices are largely manual or paper-based, they have made progress in their efforts to reduce waste. But these paper-based processes often “hit a wall” when they reach the 90% mark on the three “OEE pillars” because losses at this point often result in “micro-stoppages” that are akin to profits “bleeding by a thousand paper cuts.” Two core challenges must be addressed: Knowing (seeing events in context) and Acting (to recover in a timely manner.)

When companies approach this “last mile” threshold, it changes how they view the scope of the solution because they realize visibility (even if it is real-time) isn’t enough – real-time control is equally important to enable real-time KPI management via a closed-loop process. Specifically, work process integration becomes critical to empower front-line workers to “fix problems at the source” as illustrated below:

We have found that there is “maturity” journey that companies go on in order to achieve efficiency.  We developed the following framework as our internal assessment – it is meant to give an idea of where a company could be in their evolution.

Too often companies are not align on where they are relative to systems, culture, and alignment between the different aspects of the company.

Performance Management Maturity Model

As we have stated many times Operational Excellence is not a project it is journey, and we have found having a framework built on experience as the best way set up the path for companies.

Where do you fit in this maturity road. 

2016 the turning point in the Operational Work Transformation!!

Will this statement stand true to the operational execution world we live in, probably only time will tell, but based on the trends I outlined at the end of 2015, and looking forward I believe 2016 provides the opportunity.

By the way, welcome to 2016 may it be an exciting and productive year!

The holiday break it provides a time to reflect and discuss, and in one conversation my last blog was raised and really “how much transformation was happening?” Initially, I thought it was a comment against the trend we are seeing with the “Operational Transformation”, but this was a friend working in a major food manufacturing company. His comment was actually the momentum of change is well underway, and happening at increasing pace.

There were 4 areas that he felt his business and associated industry where trying grapple with to stay ahead:

1/ Agility of effective, valued productsand brands to the market (which he stated was regional, eg specific tastes of similar products changed by region and so your go to markets, packaging, etc. His example was around cheese how the tastes in say Mexico for cheese are totally different to Australia, and then Italy. This leads the increased importance of regional new products vs global new products, and effective speed and cost of innovation, execution and introduction.. So the challenge of “new product Innovation” and then “New Product Introduction” and delivering it to the market at the correct margin to be competitive in timely manner is a whole focus. His comment was this is the core competitive advantage that his company identifies, and must keep driving while dealing with the other transformations happening.    

2/ Operational Workforce transformation: He agrees with me that too much focus has been on the “aging workforce issue” and that most of HR and Operational teams have missed the bigger transformation, and that is the one of new generation work methods and transformation in workspace that goes with it. He felt like his company woke up to this mid way thru last year when they could not just not fill positions, but are having significant challenges in retaining talent, not within the company but in roles. He felt like initially people thought that would just get a transition to a new workforce yes younger of different experience. But they had not realized that way in which people will work, think, interact, and gain satisfaction will also change.

3/ “Planet Awareness, Image”: this one was an interesting discussion, as he raised it as a real strategy for evolving the brand of the company to been seen as proactive to the environment, to attract further “feeling satisfaction” of customers. He also stated that government regulation, and increasing costs of disposing of waste, and energy costs also are now seen a significant bottom line costs, and must be managed more efficiently. But during this discussion, it was also clear that the perception of being “proactive to the environment” in use of energy, carbon footprint, environment etc was also a key strategy for attractive talent to work in the company.

4/ Transparency across the total product value chain, “end to end”. This strategy was about tractability and making sure they happy with brand all the way to customer, but also about cost as they were “outsourcing” increasing amounts of the value chain. But this did not mean they lost responsibility for product while in “outsourced manufacturing partners” execution. The transparency across the supply chain enables increased flexibility and lower costs through inventory reduction.

These 4 strategies are combined with the current strategies to increase plant performance utilization and lower cost of materials through waste /loss reduction.

When you sit back and look at these strategies a constant set of pillars came up in the Operational Solution approach:

·       Everyone having access to information and knowledge no matter their state or location, this means internet becomes a part of the solution backbone.

·       Cyber Security is very much top of mind, both in strategy to secure,  manage, to contain cost and risk.

·       Data validation/ and contextualization, if transparency and faster decisions are required how do you gain consistent information across different sites. \

·       Delivering a new “operational Workspace/ experience” that has embedded knowledge that does not get stale, and enables imitative learning for a dynamic and collaborative workforce.

As the night conversation went on it was clear that the 4 strategies was really about changing the way in which the company manages and executes operational work, no matter how big or small. But becoming in control of not just the planned product work, but the day to day, minute to minute work at the different levels of the operational loop.

Based on the trends of 2015, this long conversation, I wonder if we will see 2015 as the year people recognized that needed to rethink how they handling “Operational Work”. With 2016 becoming the year where momentum continues to grow on projects turning to programs, that span plants, and value chain and an increasing amount of companies put teams, strategies and programs in place to evolve their operations to transform the way handle “operational Work”!

You might ask what about “big data” and the “internet of things” but these are technologies that will be part of the enabling system for a  new operational solution.

What did 2015 mean to Operational System?

As we enter the final weeks of 2015, did it live up to what we expected, what trends did it star to cement into Operational System design.

These are just some of observations I have seen:

1/ Shift to significant operational transformation programs, vs just projects, as accelerated in the second half of 2015. Certainly we have seen a lot of projects initially started or investigated as projects in 2014, in 2015 reemerge as multi-site, multiyear transformation programs. With the understanding that these programs are on journey both in technology, but also operational goals/ outcomes, and culture.

Certainly a couple of us have seen a significant amount of time allocated to evolving these opportunities working with the customer to help define their outcomes, the approaches, this has been and is still continuing as educational process for all involved. This is fundamentally changing the engagement models between end user vendors and engineering houses as a partnership, requiring changes on both sides.

2/ Cyber Security/ Application Security: This continues to grow as a huge area of interest, but this year it shifted not only how to secure, but how to maintain successfully, evolve their business and agile operations in a tighter security model. Realization that cost is not just in setting up a secure operational environment, but the cost of evolving and sustaining it while maintaining an agile business requires a strategy on it’s own.

3/ Operational Awareness/ Effectiveness: Understanding, not the “aging workforce” but the transformation in both “workforce culture/ approach” and transformation in “Workspace”  are real. That today's and last ten years of operational systems will not satisfy the agile decisions that required, but also the changing workspace culture and methods. The amount of workshops and strategies sessions I have asked to be involved in 2015 was three times that of 2014, and they were clear strategic discussions around people and how people will operate in the future.

4/ Understanding and reality of Internet of Things: The hype has been here and continues around IOT. But there has been some real sole searching in many industrial companies to understanding what it means to them. Many it dawned as the operational alignment end efficiencies they have in the “walls of the plant” now can extend to the “mobile plant”. In Oil and Gas, and Mining moving to include “extraction” wells, equipment in the operational process in real-time. In many other industries, it moved the mobile receivables plants, distribution trucks and then the distribution centers, etc. to be included in the “end to end” operational control.

5/ Realization that the Operational architecture of the future near and long term will have Internet and “cloud” as a natural part of it, and we must design the security, and systems assuming on premise and off premise architecture.

All of the above does surprise us, based on the trends, but it is good to see the shift from talk to reality. I would expect that 2016 this strategic journey programs to increase. Certainly the scope of operational responsibility is changing include a end to end supply chain, that means move outside the plant walls with the traditional systems, and we will see the alignment of Process operations and utility operations (power) into one operational strategy and control.   

Have a very happy holiday season and may 2016 continue the momentum to deliver operational solutions that will handle the "operational transformation" happening around us.

Accelerated Training is the only way to Deal with Dynamic Workforce Paradigm

As time period workers are in a role and especially a site, the systems and culture of learning, interacting and gaining knowledge must change. This happens with the knowledge and learning coming from this system as the worker requires and prepares for executing a task, vs tradition class / face to face sessions.

Operations teams in a broad range of manufacturing have discovered that the workforce, especially operators, are changing jobs more frequently.  This challenge has become more important than the “aging workforce”, although this also contributes to the acceleration of turnover.  There must be a strategy which effectively trains operators faster than their turnover.

One part of training best practices is to continue the training throughout the operators’ work term, such as summarized in the following diagrams:

The right-hand diagram summarizes some amount of acceleration in benefits, where OTJ is on-the-job training.  While this acceleration appears to be attractive, this acceleration isn’t enough – the time to profitability is still several years.  So an additional strategy is necessary, as shown in the following diagram:

The above diagram describes a strategy of acceleration: instead of focusing on the basics, the training focuses on the dynamic aspects.  This means that the operators are trained as early as possible on “advanced” topics.

The power generation industry has developed a measure of operator excellence called “error free”.  It is a measure where loss of production or damage to equipment was identified with operator errors.  During the last 7 years, power generation companies have demonstrated up to 6:1 acceleration in achieving “error free” status.

The technical change in the training simulators is focused on simulating the dynamic aspects such as weather, supply chain demand and changes in raw materials.