The Real-Time Enterprise
Every leading business today is driving for better performance: higher return on invested capital, lower costs, better asset utilization, faster delivery, greater customer retention, higher perfect order rates, reduced working capital needs, faster product innovation, greater sales and marketing productivity, higher quality, and more agile and dependable infrastructure (AMR, 2003).
In order for organizations to be competitive in this highly dynamic business environment, decision makers in the organization need to make quick information driven decisions. Immediate responsiveness to business volatility should be at peak operational efficiency at every scale - from machine, to line, plant, enterprise, and supply chain to improve return on time and investment. . Though many businesses have made huge investments in ERP (Enterprise Resource Planning) and SCM (Supply Chain Management), there has been little emphasis on manufacturing systems. The manufacturing activity in any organization is usually characterized by changes and variations leading to difficulty in estimation and planning, inefficiencies and chaos.
Today's technological advances are capable to solve any kind of problem. It can really solve problems only if it is applied and used properly. The speed of computers, the space available, etc is reducing the time it takes to analyze a situation. The classic management model is represented in the following figure:
Before the advent of computers this cycle from planning to execution to getting a feedback took a long time and hence heuristics, thumb rules, approximations, intuition etc was applied to decision making. Also erroneous data was collected using notepads and hence huge amount of time was spent on collecting and analyzing data and changing plans, by which time the organization possibly incurred huge losses.
But now with the technological advances made in the field of electronics and computers, the ability to analyze immediately (i.e get the feedback of execution immediately into the next planning cycle) with real data (no approximations) is possible. The use of heuristics, thumb rules etc can disappear. Though, this situation can arise only if “Manufacturing Execution Systems” are interoperable with “Enterprise Planning Systems”. This would lead to a closed loop between planning and execution and will hence create value by allowing quick automated decisions to be communicated between ERP and plant floor systems.
If manufacturing systems are implemented and linked to other systems (like ERP, SCM etc), the decision makers will be able to have a “Real-Time” dashboard that provides all required information to make effective decisions. Also, automated scenarios can be mapped to respond with decisions automatically. In effect “Manufacturing Intelligence” needs to feed into business systems to provide real-time “Business Intelligence”. The intelligence derived will be a result of data consolidated from different sources and systems that are provided by different vendors and that work on different platforms. The following figure shows that decision makers at different levels in an organization could possibly have access to different dashboards that present this consolidated data.
To get real value for the IT investments made by organizations, the execution systems need to be linked into ERP. ERP alone cannot deliver value. In a manufacturing organization, manufacturing data could be collected from PLCs, CNC machines, manual inputs, from MES, from Maintenance Systems (CMMS), or from RFID systems.
In today’s world there are number of products that could possibly be used in a manufacturing organization. The IT managers, today need to select products based on how interoperable they are and how easy it is to link it up to systems. They need to select integration adapters and products that have been designed using the thinking process defined by Service Oriented Architecture (SOA). The SOA approach makes business requirements drive software architecture and selection of tools and hence provides flexibility and business value to the software product.
The following diagram is a representation of the value an organization can get if they link ERP systems to the plant floor instrumentation level systems.