Making industrial automation a profit engine

April 10, 2018

Planning for the changes presented by the IIoT has not kept pace. 

Technology advancements have transformed many aspects of the manufacturing industry, rendering old

Schneider Electric Process Automation's Peter Martin

models of production counterproductive to gaining market share—or even staying afloat. The Industrial Internet of Things (IIoT) has changed operating strategies across the board. Businesses are working smarter and more efficiently on everything from implementing new process control and automation systems to managing their supply chains, all ostensibly to drive more profit. But are they?

Even with all of today’s technology advances at their disposal, manufacturers are still struggling to measure and control the business value their process automation and control systems deliver. For decades, these systems were really only focused on improving the efficiency of the process, not total business performance. One reason for this was the rigidity of the automation-system architectures, which reduced the ability for agile solutions because they did not match plant and enterprise topologies. Manufacturers used traditional automation systems to control the efficiency of manufacturing processes, but not the profitability produced by the industrial assets.

So, while distributed control systems have historically done an exceptional job of controlling process performance, they have had little to no impact on total business performance. In fact, not only have these systems been costly to configure, engineer, install, implement and operate, the financial impact they have on business performance (especially the profitability of the operation) has traditionally not been properly and accurately measured because of technological limitations. But with added functionality from new IIoT technology, the potential value a DCS can provide is skyrocketing.

IIoT to the rescue

Connectivity, networking, big data, predictive analytics, cloud computing, fog computing, wireless communication, cyber physical systems, edge computing—IIoT is gaining acceptance each and every day, and it offers unprecedented promise.

But while all the discussion swirls around emerging technology and its potential, thought leaders know IIoT can help industrial manufacturers extend real-time control across their value chain because it has the potential to finally dissolve the IT-OT barrier.

In fact, with the integration of industrial automation/communications/networking, those siloes are already starting to break down. These integrated technologies enable better operations and business control because the industrial workforce and its business leaders have more and better access to critical real-time operations and business data, complemented with the proper context and advanced tools that help them act on that data from anywhere in the world.

This portends future process-automation systems architectures that will be incredibly agile, able to match the industrial-operational architecture that defines how a specific plant works (based on a hierarchy of assets, not processes). Soon, automation and control architectures will start controlling asset performance from the bottom up, beginning with the equipment assets of a plant—a pump, for example—and ending at the enterprise value chain. In short, the control systems of the future will be asset-centric, not process-centric. 

That will unlock the true financial value of IIoT. But how can we make it happen?

Turning your business into a profit engine  

Implementing any new system is always accompanied by the probing inquiry: How will this contribute to growing the bottom line?

With IIoT, the answers are becoming clearer because (now more than ever) manufacturers have an opportunity to begin controlling all their business variables in real time. That is critically important when we consider how quickly business moves today. For example, a generation ago companies would buy their electricity at a set monthly or even quarterly price, but today’s energy prices change almost minute to minute.

That is the case with many other commodities and feedstock that impact the enterprise value chain. Therefore, managing the business month-to-month based on information accumulated and stored in an ERP system doesn’t make sense. To be successfully competitive, manufacturers have to look at how they can control all their business variables in real time, not just the efficiency of their process. Among those variables are the real-time safety, including environmental safety and cybersecurity, the real-time reliability and the real-time profitability of the operation.

All of the aforementioned business variables are changing quickly, yet reacting and planning for this change has not kept pace. Many business functions, such as scheduling and planning, have historically been managed on a weekly or even monthly basis; by the time companies receive updates from their resource planning systems, the information is no longer relevant to the business decisions they need to (or should have) made.

In the age of IIoT, business managers and plant personnel alike have never had greater opportunities to measure and improve the profitability of their operations in real time. Driving operational-profitability improvements starts with optimizing the performance of each industrial asset so that it performs in the safest, most reliable, efficient and profitable manner possible. With stronger computing power and advanced technology, it is possible to put real-time control, interoperability and communication everywhere, from the simplest plant asset all the way up to the supply chain. Manufacturers can incorporate big data and predictive analytics to measure how every asset is contributing to its operational profitability. Empowered with the ability to control every asset—even intangible assets like energy costs and raw material use—in real time, companies are now able to conduct business whenever it is most profitable for them.

Operations and management can finally be in sync, with management understanding business constraints at every level of the operation and plant personnel understanding the impact their decisions have on profitability in real time. 

Weaving profitability into digital transformation 

Many industrial manufacturers have begun to preach digital transformation, but technology for technology’s sake does not truly transform business potential without a clear vision and the right technology implementation. IIoT offers unprecedented promise for finally realizing value through real, measurable improvements to all business variables, most notably profitability. And this is only made possible when manufacturers break down the barrier between IT and OT.

Peter Martin is vice president of marketing and innovation with Schneider Electric Process Automation.

Are you keeping pace? Join us at the 2018 Smart Industry Conference to equip yourself for the race.