How to Determine Automation Value and Objectives for Modernisation?
Published on : Monday 30-11--0001
For any manufacturer, the prime factor behind implementing automation in their business is to achieve greater return on investments. And, despite spending millions every year in maintaining and replacing the worn-out automation components, their processes often do not work as efficiently as they used to be. Hence, there is a huge question mark on the value of this investment. Over the period of few months after such investments, one starts exploring from the beginning again, on how one can achieve better returns from their automation investment.
Advanced features in automation technology are often left un-used when failing legacy components are replaced with new ones. For example, it is like buying a smartphone and using it only to make calls and not using its other features such as clicking pictures, sending messages or for surfing the Internet.
Many companies are facing this situation and using only 30-40% of their modern ‘automation system’ capabilities. Despite spending heavily on these automation components and equipping their plants with new technologies, the operational efficiency is not any better than the old devices.
Since the economic implosion in 2008, for almost a decade, companies have been delaying major investments towards modernisation and keeping their production going unperturbed by using replacement parts as a temporary measure. However, this strategy, along with these automation systems, could become obsolete soon.
To make matters worse, the ongoing downsizing of manufacturing workforce, by way of layoffs or outsourcing, is leading to the decline of the population which has the requisite skill set to maintain legacy systems. This reduction in workforce has resulted in availability of fewer engineers, production supervisors, technical and maintenance support personnel to stay abreast with technological advances. The situation is further aggravated by the companies’ lack of strategy to use the latest automation products to its optimal capacity.
If your current automation technology is causing too much trouble and restricting you from achieving your business objectives, how can you increase your returns when you invest in a new automation technology without a plan? Gone are the days of replacement or migration techniques, it’s time to take modernisation steps with clear strategy aligned to your new business objectives.
Engaging system integrators and automation suppliers can help in pointing to the facts. However, in order to achieve higher returns in the pursuit of modernisation, they should be looked upon as partners rather than suppliers. The task to find out what and where to spend, begins with a set of questions.
How is your production process working currently?
Establishing a baseline, by analysing existing operations and how they function, is essential as this will not only help in understanding the ground reality of the production process but also help in choosing the right direction while making automation investments. Hence, data gathered from production process and analysis of the same have become very important, because that is where planning automation upgrade with entirely integrated automation, involving right automation products with common database, becomes a key. It is easier to capture plant-wide data with such upgrades as it provides better visibility on how the automation and production processes are working.
It is also important to consider the automation system’s components; features and functionalities it offers and check if full advantage is taken from the technology, being planned for modernisation. Many upgrades merely take the core of the previous systems and give it a new packaging, due to which you end up transferring a lot of dead code, which does not help the process work better.
What areas is your plant at risk?
As business requirements change, it is important to first identify the areas where your existing systems are not able to serve the purpose, with respect to your new business goal. These areas are the soft targets for pushing towards modernisation phase.
What are the biggest risks to achieving your cost and production goals?
While analysing your current infrastructure, consider a three to five-year investment planning period. According to a global marketing leader for one of the largest control and automation companies, manufacturing infrastructures are so archaic now that everybody’s looking for solutions. The ability of these infrastructures to respond to business challenges is Unrestricted by legacy equipment that is neither flexible nor productive enough, causes too much downtime, takes too long to modernise, consumes too much energy, or has component availability or gray market quality issues.
While deciding upon the modernisation investment, it is important to consider these factors to overcome inefficiencies and to mitigate risks to the business. In addition, risk mitigation involves analysing the cost to the company in case a critical system fails in the future. A risk can be easily identified when something is not working anymore or when the components are not available any longer.
While planning your investment, key to any improvement efforts are better diagnostic features, because automation systems with integrated diagnostic tools can help locate where the process needs to be more efficient, requires changes/modifications as well as quick localisation of errors through new technology hardware and associated software.
Understanding the difference between Modernising and Migrating
The difference between migration and modernisation is that: migrating to an updated component would not necessarily result in production improvements, whereas modernising can help in increasing data collection which would lead to transparency in production process and help in achieving greater productivity at lower costs. It is important to consider the RoI. A company which sticks to legacy systems by just replacing components will be forced into an emergency modernisation sooner or later, whereas planning for modernisation in phases would go a long in keeping the plant sustainable.
Finding the root cause of problems
It is justified to target the dysfunctional systems, which are difficult to work with, responsible for unplanned downtime most frequently, add to the production costs or barriers to achieving new business prospects. Finding the root cause of the problems of the current automation systems is the initial step of the process. And, by choosing to modernise them instead of opting to replace or migrate them, one can save a lot of money and time with added value created that can help in realising new goals towards Smart Manufacturing.
Which areas to improve efficiency?
Companies have started to closely monitor their systems and are on the lookout for ways to make it more reliable and productive, reason being, greater return from production infrastructure is achieved when the operations run more efficiently at lowest cost. When you are planning to modernise your infrastructure towards Smart Manufacturing, it is important to look into all the possible features and functionalities of the new technology that would be essential to achieve the objective.
These technologies essentially use Industrial Ethernet/Internet, which is a pre-requisite for data collection and to connect to cloud. Due to this, networking, wireless technology and cyber security have become increasingly important, considering modernisation. And, since manufacturing has begun evolving in the digital space now, planning modernisation steps and doing so quickly has become unavoidable.
Certainly, the initial step is to connect all the devices/assets to the Internet of Things (IoT) so that it can provide visibility into the plant and gain insights that can be used to achieve stable and better operations. This step is essential to move on to the next step. Frequently, it is necessary to do modernisation and optimisation in parallel with current systems as we will require the production to go on.
Leveraging new technology
Nowadays, products with new capabilities are being introduced by automation suppliers, that offers solutions to long-standing issues and, taking advantage of these advancements will help in achieving the vision easily. Ageing infrastructure pushes companies to evaluate their existing automation systems and to understand when is the right time to evaluate advances in technology and how they can help pay for modernisation project.
Replacement becomes a one-time investment with no return, if full advantage of the technological advancements is not taken. This is one of the reasons why companies frequently cancel replacement projects from their budget and do whatever feasible to purchase based on low cost.
Increasing use of technologies, which makes collection, storage and visualisation of data easier, has improved the capabilities of the automation products too, helping companies to achieve their new goals with lower engineering and capital costs. Before planning the steps towards modernisation, it is important to evaluate which would be the best technology to improve performance and reliability, as that’s the only way forward to achieve maximum RoI.
In understanding the value of implementing Automation from Management’s point of view, Automation is sometimes viewed by executives as a black hole, which requires investment but does not have any substantial outcome. Unless return on automation investment is understood, executives would not be able to justify this investment to gain support from management for approval on these projects.
If implemented in the right way, automation can add more value to the company’s bottom line as compared to any other investment. However, it requires talent to understand both the physical laws governing engineering and human rules of accounting.
Sadly, several automation investments are made mostly to mitigate the troublesome factors of the existing systems. Hence, most of the automation is not generating much value, and, its actual financial impact on the business is not widely understood.
Going Forward
The important steps that can help management achieve outstanding returns on modernisation investments are: planning of modernisation requirements, ideating according to new or revised business objectives to select right automation platform; and navigating the project team through a careful evaluation process.
Things shall always conclude positively, if the right Automation Solution is chosen, taking into consideration investments and ROI it will provide, with respect to achieving new organisational goal. Hence, the moto should be “No Migration, But Modernisation”.