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  • 1. By Harry Forbes ARC BEST PRACTICES MARCH 2007 Best Practices for In-Plant Visibility in Process Manufacturing Executive Overview .................................................................... 3 Field Operations in Process Plants: A Chronic Blind Spot.................. 4 ARC Research on In-Plant Visibility ............................................... 6 Survey Results........................................................................... 7 Interview Results ......................................................................13 Recommended Best Practices......................................................20 THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
  • 2. ARC Best Practices • March 2007 2 • Copyright © ARC Advisory Group • ARCweb.com Process Manufacturers May Know the Location, Speed, and Inventory of Hundreds of Their Downstream Delivery Vehicles on a Minute-by-Minute Basis. They Have Far Less Visibility into the Work of Operating and Maintenance Crews “Inside the Fence” of Their Own Refineries and Plants. People Processes Technology Information Ground Breaker All employees and key contractors Corporate teams of IT, Operations, Maintenance WLAN supporting multiple services Corporate- wide operations visibility Leader Operations and Maintenance employees Project Team of Operations and IT WLAN and mobile computers EAM and PAM integrated with field tools Competitor Operations employees only Pilot Team from Operations Cradled mobile computers Operators leverage mobile computing Follower Visionaries and vendors only No program defined Paper-based operations procedures Paper-based operations procedures The Current State of In-Plant Visibility in Process Manufacturing
  • 3. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 3 Many process manufacturers recognize they need to have more visibility of field work activities “inside the fence” at their plants. But few have a solid plan for progress. ARC Advisory Group recently researched practices for in-plant visibility to better understand why. Executive Overview Process manufacturers need more visibility into the work activities that oc- cur within their plants but outside of the control room (and often outside of the view of their process automation systems). Many manufacturers expect to sharply improve this in-plant visibility in the near future and have begun to experiment with new technologies and business processes to achieve it. In many cases, these initiatives affect practices and procedures that are deeply established in their corporate culture. Today, very few manufactur- ers have a solid plan to reach the future in-plant visibility they desire. To understand these efforts and to capture best practices, ARC Advisory Group conducted a sur- vey in late 2006 that was followed up by a series of in-depth interviews with manufacturing firms that had responded to the survey. The survey showed that many manufacturers had ambitious plans to improve in-plant visibility. Most ex- pected improved asset reliability and plant safety to justify their future technology investment in this area. In most cases, these initiatives were led by operations personnel, with a surprising lack of strong IT influence reported. Follow-up interviews revealed that there was a huge range in the scale of these programs, and that most of the companies were still in very early stages of their development and deployment. A much smaller number of manufacturers had an extensive experience base. These firms were much more mature in managing their in-plant visibility initiatives, and had al- ready progressed through several stages of development that were likely to be repeated by other manufacturers who still have less mature programs. Based on these discussions, ARC recommends manufacturers that are pur- suing greater in-plant visibility should quickly adopt these more mature practices rather than repeat the multi-year evolution that the industry lead- ers went through out of necessity. ARC has identified three of these best practices as most important. • Address the cultural impact of greater in-plant visibility • Implement using cross-functional teams • Design early implementations for full scale-up
  • 4. ARC Best Practices • March 2007 4 • Copyright © ARC Advisory Group • ARCweb.com Process manufacturers such as oil companies usually have far more visibility of downstream distribution operations than they do of many field activities that take place “inside the fence” at their massive plants and refineries. First, in-plant visibility affects fundamental operating and maintenance practices. New and higher levels of in-plant visibility will have a major cul- tural impact on these organizations. Manufacturers must recognize and address this impact. These organizations are rightly risk averse and slow to change their existing culture. Second, this work involves multiple disciplines and cannot be successful if any of these disciplines are neglected or missing. Initiatives should be im- plemented by teams of recognized leaders with proven expertise drawn from across all functional silos of the organization. Efforts of these multiple teams should be coordinated by an overall steering group that includes up- per management. Finally, to ease a consistent deployment of these changes across many manufacturing operations, the initiatives need to be implemented in a pro- fessional manner worthy of the sustaining importance of these deliverables to the manufacturing enterprise. Over time, these initiatives will have as much or more impact on operations as did the adoption of ERP in the 1990s. Manufacturers should manage these visibility investments with the degree of attention and resources they merit. Field Operations in Process Plants: A Chronic Blind Spot Despite higher visibility into far-flung operations achieved through wire- less and mobile computing technologies, many field activities that take place “inside the fence” within process manufacturing represent a serious and persistent blind spot. Down- stream, oil companies may know the exact location of hundreds or thousands of delivery and service teams and have records of their locations, routes, and speeds at minute-by-minute intervals. However, inside the huge refineries and petrochemical plants at the mid- stream, many human activities that occur outside of the plant control rooms are captured only after the fact and via paper, if they are captured and documented at all. How can this be? Many of the technologies that bring visibility to far-flung global service and logistics operations (cellular telephony, vehicle telemat-
  • 5. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 5 A study by the ASM Consortium found that human error in the creation or execution of procedures is the largest single cause of abnormal situations. ics, GPS location tracking) have been unsuited for use in the hazardous lo- cations, conditions, and work processes that are executed by operations and maintenance workers in process plants. These plants have superb visibility of process conditions that are monitored by their automation systems, but for events beyond that their in-plant visibility has changed very little in many years. Process manufacturers themselves widely expect that this situation will change completely. A confluence of new technology, business drivers, regulatory requirements, and safety initiatives will bring wholesale changes to the way process plants execute and track their daily operations and maintenance tasks. While changes are widely expected, very few in the process industries have a solid understanding of how they will migrate from their current practices to the highly transparent operations they envi- sion for themselves in the future. Many process manufacturing companies are now wrestling with some part of these changes, but few have devel- oped serious strategies for them. Drivers for Change Why do manufacturers believe these changes are coming? There are many reasons, one of the most well-documented of which is the reduction in the occurrence of abnormal situations. The Abnormal Situation Management (ASM) Consortium has studied 59 cases of abnormal situations and classi- fied them according to root cause. ASM cautions that the assigned causes represent ranges rather than precise percentages, but the category “People and Context Factors” was the root cause of the largest fraction of incidents. When further subdivided, this category indicates that human error in the creation or execution of procedures is the largest cause of these incidents. Given the higher demands placed on the process indus- tries by today’s tight energy and petrochemical markets, human errors continue to be a major source of risk for process manufacturers. By adding greater visibility and repeatability to their fieldwork, manufacturers can bring a climate of continuous improve- ment and best practices to these work activities. Greater safety is another justification that stems from multiple sources, in- cluding reduction of human error. Some manufacturers look toward real- time location services (RTLS) as a possible future infrastructure that can
  • 6. ARC Best Practices • March 2007 6 • Copyright © ARC Advisory Group • ARCweb.com ARC conducted a survey on in- plant visibility and followed up by conducting in-depth interviews with manufacturing companies who had participated. improve personnel tracking and safety as well as improve tracking of mo- bile assets, tools, and new or uninstalled equipment inside the plant perimeter. Some suppliers of equipment have shown prototypes of these solutions, and such RTLS systems are now making inroads within critical health care complexes such as major hospitals. These systems are very rare in manufacturing, and unknown in process manufacturing at present. Improved collaboration and business processes are common justifications. This can result from more uniform and consistent practices by personnel, improved processes for hand-off of responsibility between operating shifts, or between operations and maintenance staffs. In addition, the more rapid and accurate population of back-end enterprise applications with plant field data and task status information can yield significant benefits. Because so many process manufacturers expect major changes, the situation prompted ARC Advisory Group to conduct research in this area during the past few months. The objective of this research was to identify the current practices and future plans of process manufacturers regarding in-plant visibility. The other objective of the research was to identify some of the best practices that manufacturers were developing as they prepare for and make these fundamental changes in their day-to-day operating and main- tenance practices. ARC Research on In-Plant Visibility Research for this project is divided into 2 main parts. First, a detailed sur- vey was developed by ARC in collaboration with several process manufacturers and suppliers. This survey was published by ARC and was made available on the Internet during the 4th quarter of 2006. The survey contained 16 ques- tions concerning current practices in process field operations and future plans. Another five questions con- cerned the demographics of the respondents. ARC received 81 valid survey responses, and 42 percent of these were from process manufacturers. In the analysis presented here, ARC has excluded survey responses except those from process manufacturers themselves. The other portion of this research was a series of in-depth interviews with professionals in process manufacturing. Topics for these interviews were
  • 7. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 7 the same as the web survey, but the interviews allowed ARC to gain more insight into what practices are most important and why, and how not just new technology but other factors contribute to best practices. ARC inter- viewed a number of persons from various process industries. Interview candidates were selected from among persons responding to the web sur- vey as well as from ARC’s internal databases. Survey Results Who Are the Field Workers? ARC asked, “Which types of personnel perform tasks in the field at your plant?” The responses are not surprising, and indicate that the primary constituents are maintenance personnel and dedicated field operators. While contractors also play a role here, the presence of contractors on site is normally concentrated during unit outages or turnaround periods. The key take-away here is that both maintenance and operations have a significant stake in any changes in fieldwork practices. Plant maintenance personnel Dedicated field operators Contractors or service providers Control room operators (working part time in the field) Scheduled rotation between field and control room operators Other 35302520151050 88.2 % 79.4 % 52.9 % 52.9 % 38.2 % 5.9 % Plant maintenance personnel Dedicated field operators Contractors or service providers Control room operators (working part time in the field) Scheduled rotation between field and control room operators Other 35302520151050 88.2 % 79.4 % 52.9 % 52.9 % 38.2 % 5.9 % Survey Data: Who Are Field Workers?
  • 8. ARC Best Practices • March 2007 8 • Copyright © ARC Advisory Group • ARCweb.com What Expected Benefits Justified Manufacturer Investments? ARC asked manufacturers “How important were these reasons in justifying your company’s use of mobile computing, mobile communication, and IT equipment in the field?”. The question allowed three responses (“Most Im- portant”, “Important” or “Less Important”). To highlight the distinctions, results are graphed here with only the “Most Important” and “Less Impor- tant” responses shown. Clearly, the manufacturers leaned toward increased asset reliability and greater safety as the critical justifications for the work they are doing now. Somewhat surprisingly, neither top-down nor bottom-up initiatives were considered important. Neither did the “ag- ing workforce” consideration play a major role in the justification. Possible explanations of this response is that the benefits of higher equipment reli- ability are easy to quantify, while the challenges of achieving greater operating safety despite today’s more complex plant operations is a very high priority for major process manufacturers. Less important Most important Safety (avoiding Human Error) Capturing best practices Training new/less experienced operators Improved Asset reliability Regulatory Compliance Top-down strategy by Management Requests/suggestions by Operators Other 191817161514131211109876543210 Less important Most important Safety (avoiding Human Error) Capturing best practices Training new/less experienced operators Improved Asset reliability Regulatory Compliance Top-down strategy by Management Requests/suggestions by Operators Other 191817161514131211109876543210 Safety (avoiding Human Error) Capturing best practices Training new/less experienced operators Improved Asset reliability Regulatory Compliance Top-down strategy by Management Requests/suggestions by Operators Other 191817161514131211109876543210 Survey Data: What Justifies Investment in Visibility?
  • 9. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 9 What Enterprise Applications Are Most Valuable in the Field? Visibility into field operations is not an end in itself but rather a change that will add value to other enterprise level applications. One survey question asked, “How much do you believe these back end applications can benefit from mobile computing, mobile communication, and IT in field opera- tions?”. Again, the survey gave a choice of three responses: “Little Benefit”, “Some Benefit”, or “Most Benefit”. The graph below plots the extreme re- sponses only. The clear winning applications in this question are process operations and plant asset management. The case for value in process op- erations is clear, since these are essentially invisible in real-time when paper-based procedural systems are used. While asset management is per- ceived as a beneficiary also, it is an open question at this point as to how many manufacturing installations are equipped to leverage new electronic field data in their existing asset management applications. Little Benefit Most Benefit Little BenefitLittle Benefit Most BenefitMost Benefit Process Automation Plant Data Historians Process Operations Plant Asset Management (PAM) Enterprise Asset Management (EAM) Other 252423222120191817161514131211109876543210 252423222120191817161514131211109876543210 Survey Data: What Enterprise Applications Benefit Most?
  • 10. ARC Best Practices • March 2007 10 • Copyright © ARC Advisory Group • ARCweb.com Which Functional Organizations Are Most Influential? Another question probed the issue of which functional silo within the plant had the most influence on their present field programs. The question was worded “How much influence do these organizations have in setting policy for mobile computing, mobile communications, and IT equipment in the field at your company?”. The response to this question was not what ARC expected. Again, we have removed the “middle” response and plotted the responses that marked organizations with “less influence” or “more influ- ence”. What emerges here is that plant operations personnel and plant maintenance are perceived as being the most influential silos, with plant IT and corporate-level IT functions trailing. Since these programs involve state of the art high technology equipment such as certified mobile comput- ing devices and AutoID technologies, ARC would have expected to find IT’s role more prominent and more widely recognized. This response was noted for further follow-up during our interviews. Less influence Most influence Less influenceLess influence Most influenceMost influence Corporate Operations Plant Operations Plant Maintenance Corporate IT Plant IT Other Corporate Operations Plant Operations Plant Maintenance Corporate IT Plant IT Other 1817161514131211109876543210 1817161514131211109876543210 Survey Data: Which Organizations Are Most Influential?
  • 11. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 11 What Technology Deployments Are Planned? The survey asked “What kinds of mobile computing, mobile communica- tion, and IT equipment does your firm use (or plan to use) in support for field operations?” and presented a list of various IT and telecom devices. Respondents marked each device by selecting from among three responses (“Use now”, “Plan to use in 1-2 years”, or ”No plans to use”). Responses are plotted in the figure nearby. As expected, the vast majority of process manufacturers now use mobile radio for voice communication with field operators. Technologies that are most often planned for near-term de- ployment are handheld computing platforms. Very few see VOIP telephones in the immediate future for their field operators. use now plan to use in next 1-2 years no plans to use 252015105 Mobile radio Mobile telephone VOIP telephone PDA Rugged Handheld Computer Laptop computer Other 0 use now plan to use in next 1-2 years no plans to use use now plan to use in next 1-2 years no plans to use 252015105 Mobile radio Mobile telephone VOIP telephone PDA Rugged Handheld Computer Laptop computer Other 0 252015105 Mobile radio Mobile telephone VOIP telephone PDA Rugged Handheld Computer Laptop computer Other 0 Mobile radio Mobile telephone VOIP telephone PDA Rugged Handheld Computer Laptop computer Other 0 Survey Data: What Technology Deployment Is Planned?
  • 12. ARC Best Practices • March 2007 12 • Copyright © ARC Advisory Group • ARCweb.com What WLAN Coverage Will Be Provided, and When? ARC also asked about the status of plans for providing WLAN coverage of the process plant. The question was worded “What is your company’s plan for providing Wireless LAN coverage in these area of your plants?”. Re- spondents were given three choices (“Have coverage now”, “Plan to provide coverage in next 1-2 years”, or “No plans to provide coverage”). A majority of respondents plan to add WLAN coverage for some of their field areas during the next 1-2 years, though very few have this capability in- stalled now. The build out implied by this response is very rapid. At present, very few WLAN products on the market are certified for hazard- ous locations. Installing commercial and non-certified products is possible using enclosures and remote antennas, but the cost of such installations is far higher than for products that are designed for these services. This ques- tion was another that ARC noted as requiring clarification during more detailed discussions with manufacturers. have coverage now plan to provide coverage in next 1-2 years no plans to provide coverage Some control rooms All control rooms Some field areas All field areas 2220181614121086420 41.2 % 11.8 % 26.5 % 0.0 % 20.6 % 47.1 % 61.8 % 44.1 % 20.6 % 29.4 % 11.8 % 35.3 % have coverage now plan to provide coverage in next 1-2 years no plans to provide coverage have coverage now plan to provide coverage in next 1-2 years no plans to provide coverage Some control rooms All control rooms Some field areas All field areas Some control rooms All control rooms Some field areas All field areas 2220181614121086420 41.2 % 11.8 % 26.5 % 0.0 % 20.6 % 47.1 % 61.8 % 44.1 % 20.6 % 29.4 % 11.8 % 35.3 % 2220181614121086420 41.2 % 11.8 % 26.5 % 0.0 % 20.6 % 47.1 % 61.8 % 44.1 % 20.6 % 29.4 % 11.8 % 35.3 % Survey Data: What WLAN Coverage Is Planned?
  • 13. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 13 ARC found a very wide range of experience regarding in-plant visibility among process manufacturers. Interview Results To follow up on this survey and obtain more insight on these questions, ARC Advisory Group conducted a series interviews with manufacturing firms who had taken the survey. Companies interviewed had all partici- pated in the survey, but some of the persons interviewed were different from the survey respondents. Interviews were conducted during the sur- vey period and during the first quarter of 2007 by telephone or in person. The key finding from these interviews was a question that we did not ex- plicitly ask at first. That finding is that there was a very wide range in the experience level and the commitment with which com- panies have attacked the issue of in-plant visibility. What we discovered was that most of the companies had done only pilot projects with mobile computing and or wireless networks in their plants. For example, one of these was a refiner who had deployed a system on a single unit within a 13-unit production complex. Another had a program for one of their 11 plants. Most of the manufacturers interviewed had this level of experience. A second and smaller class of manufacturers had significant and multi-site experience. Their programs were now proceeding rapidly and these com- panies had gathered far more operating and deployment experience. Their perspective on these programs was decidedly different from their less ex- perienced counterparts, and their implementation plans and advice formed the bulk of ARC’s Best Practices recommendations. Turning back to the key questions raised by the survey, here is what our interviews revealed: Who Are the Field Workers? Companies initially defined these as field operators only. Depending upon their particular practices, that could mean all plant operators or a subset of their operating staff. More experienced companies argued that programs limited to operations were suboptimal. Benefits were limited in compari- son to more broad-based programs, while the costs were not much different, making these programs far less attractive. More experienced companies argued that both operations and maintenance should be part of any new technology plan.
  • 14. ARC Best Practices • March 2007 14 • Copyright © ARC Advisory Group • ARCweb.com Larger in-plant visibility programs focus on improved collaboration as a major source of benefit. That was as far as they have gone at present, though. Inclusion of contrac- tors is not a practice ARC encountered during these interviews. Contractor presence on site is highly concentrated in turnaround periods, so that pro- visioning them with technology and training beyond mobile voice radio is too challenging at present. At least one manufacturer is planning to use their new field visibility tools to manage turnarounds in 2007, but their plan is to equip their own personnel, not the contractors, with new technology to monitor the turnaround work. Contractors working on site during a turnaround have a critical role that impacts plant capacity, reliability, and safety. The speed with which they can complete their work during turnarounds has a major impact on the length of the overall outage. Quality of their work processes is also critical, since they often disassemble, service, and reassemble critical process equipment. ARC believes that the manufacturers we interviewed would like to have far greater visibility into the work processes of contractors, but at present they are “putting their own house in order” in terms of visibility by attempting to gain more visibility into their own work processes. What Benefits Justified Manufacturer Technology Investments? Smaller programs focused on operations only rather than operations and maintenance, and their justifications were operations reliability, safety, and the closing of information gaps in field operations. There were a number of other reasons as well. Compliance was one driver, including one manufac- turer who had committed to the program as part of the settlement of an environmental dispute. More rigorous and comprehensive shift-change handoffs were a benefit reported by one major manufacturer, Justifications for larger programs were quite similar, but in- cluded improved collaboration and hand-offs between operations and maintenance. Larger programs seem focused on this improved collaboration as a major source of benefit. This is not to say that companies doing pilot programs were displeased with their results. Most were happy with the status of their program. Some felt that the willingness of their employees to use new technology and processes was greater than their ability to deliver. Part of the gap here was the immaturity of the technology solutions themselves, and part was the ability of the company to implement new or improved processes effectively.
  • 15. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 15 Operating tasks tend to be “round-centric” while maintenance is “asset-centric”. Both paradigms are needed in mobile field operations. Larger implementation programs while pursuing ROI through concrete changes, seem more committed to the view that field work processes in general have received under-investment and are proceeding with a plan to invest in IT and knowledge infrastructure to remedy that situation. Thus in these programs there is not as much reliance on calculating an overall ROI from each phase of the investment. Rather, the search for ROI determines which practices and work processes receive priority as new field technol- ogy becomes available. What Enterprise Applications Obtain the Most Value from Field Information? There was widespread agreement that a sustained focus on application in- tegration was important for any new field worker technology initiative. This was not necessary in all cases to deliver value. Improvement in opera- tions had significant value, but the consensus is that new field information can be used to improve a number of areas if operations-oriented programs are implemented in a manner that facilitates it. One manufacturer had used their new information to supplement an exten- sive existing program to monitor Overall Equipment Effectiveness (OEE). The data collection and recording process for these OEE monitors were al- ready in place and the results already had high visibility within the organization. Additional information provided by the new operator tools was integrated with this existing reporting system. More experienced process companies reported that it was essential that their use of new field information focus beyond “rounds and readings” from the outset. They reported that focusing on APIs as a point of design and implementing various work processes within that context. This way the initial design of applications would focus on integrating and utilizing the new field information, whether it came from operators or maintenance teams. They urged that to derive value, it was just as im- portant to understand the structure of existing enterprise applications, as it was to understand the operations and maintenance processes. Interviews also suggested that using a single paradigm for mobile software was not a best practice. Much of op- erators work is “round-centric” in that the work processes defined survey field equipment on a regular basis, or to execute a particular operating pro-
  • 16. ARC Best Practices • March 2007 16 • Copyright © ARC Advisory Group • ARCweb.com cedure. Maintenance and condition monitoring tasks by contrast tend to be “asset-centric”. Here the focus is on a particular asset, what data or obser- vations need to be made, the status of outstanding work orders, and how its performance compares with the recent past. Field workers will want to be able to switch easily between these two paradigms to take full advantage of interruptions and changes in their planned activities. In the area of asset management, the key metrics are an increase in “tool time” that can result from improved processes and coordination. Another value comes from gaining visibility of material after it is removed from warehouse areas. In the view of ERP applications, this material usually be- comes invisible once it leaves a warehouse to be delivered to a job site. Any misplacement or removal of critical material can result in the suspension of maintenance activities while the missing material is either located or re- placed. Which Functional Organizations Are Most Influential? In this area, the survey results showed a surprising lack of IT involvement and responsibility for new technologies deployed in field operations. Dur- ing the interviews, it became clear that the more experienced companies had fully integrated their IT organizations into their planning and into their project teams. Many of the pilot programs used cradled mobile computers rather than WLANs. Thus, the IT infrastructure was not expanding dramatically for these programs. Other pilot programs were testing plans for administra- tion of mobile devices and wireless networks in the field so that policies could be developed based on results rather than in a data vacuum. Other single unit or single plant pilots did not result in any definitive plan for handling future WLANs inside the plant fence. Here the more experienced companies were operating in a much different fashion. These companies had engaged their IT function in strategic ques- tions such as management and planning of mobile computing platforms and negotiation of software licensing, service, and support agreements. Since mobile computing was already a strategic IT consideration in other business areas, this was not new ground for IT. Furthermore, operations and maintenance experts reported that platform planning was critical given the rapid pace of technology change and the need to focus on enterprise application integration.
  • 17. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 17 Manufacturers see device form factor and human factors as a major concern for in-plant use of mobile computers. One of the highly experienced companies engaged their IT outsourcing supplier as part of their team. However, a clear best practice here was the coordination of the company’s overall program through a steering team that included operations, maintenance, and IT. Among the leaders, the IT function was engaged in this work and IT consti- tuted a strategic part of the overall team. Some less experienced companies recognized this and planned to add IT for mobile platform planning and WLAN administration, but the leading prac- titioners already had established a team that included IT and had assigned IT several critical roles in the company’s overall plan. What Technology Deployments Are Planned? The survey found that many manufacturers plan to have mobile computing in use in the near-term future. Interviews showed that there was no broad consensus concerning the types of devices that future operators or mainte- nance workers would be using. Device form factor and human factors are major concerns here. The effect of dirt, extreme temperature, battery life, the size of keypads, the brightness of displays, and navigating through applications while in the field are all questions that are more challenging for field-based appli- cations than for office applications. ARC’s interviews found that manufacturers reported willingness to ex- periment was in many case ahead of the ability of current technology to deliver. Another significant issue was the addition of a mobile computing device to existing mobile radios that many such workers already must carry. Manu- facturers had difficulty with the idea of mandating that operators carry a second electronic device. Yet there are any number of other types of devices that can be used occa- sionally, and there was no consensus regarding these either. Use of digital cameras and digital video offers obvious opportunities to collaborate and to document equipment condition. Use of cameras to document major main- tenance work had been a decades-long practice in many process industries. However, policies toward personal digital photography and video vary General Mgmt. Operations Maintenance IT Overall Program Coordination by a Company-wide Steering Team Is a Practice of Experienced Firms
  • 18. ARC Best Practices • March 2007 18 • Copyright © ARC Advisory Group • ARCweb.com Experienced manufacturers hope to close gaps in their WLAN coverage, but doubt that they can guarantee 100% coverage. considerably. These technologies are being used more and more for pe- rimeter security, but some manufacturers interviewed did not allow on-site photography (digital or analog) unless authorized in advance. Others en- couraged the capture and inclusion of digital images in many common reports. Business issues such as the loss of control over on-site images and the possibility of unanticipated liability exposure may also play a role here. These challenges will not recede. When process plant WLAN coverage be- comes common, manufacturers will have many more options for field technologies, including portable videoconferencing devices. The area of digital imaging and video seems to be one that needs to be thought out and discussed in more depth within manufacturing enterprises. What WLAN Coverage Will Be Provided and When? Our interviews provided some additional clarification concerning the de- ployment plans of manufacturers with respect to WLAN, which was a conspicuous result of the survey. We did find some companies with ag- gressive rollout plans for WLAN coverage of their plant sites. Some felt their targets were too aggressive and had been agreed upon as “reach” goals in agreements with upper management, even though they might not be feasible. We found that even the small minority of interviewees who already had extensive WLAN were planning its eventual upgrade in the same period as those who had never deployed any WLAN in their sites. These purchasers of a 2nd generation of WLAN coverage were looking to add rapid “roaming” capability for WLAN devices throughout their manufacturing plant. They were plan- ning installations with remote antennas and protective enclosures for environments that were high temperature, corrosive, or hazardous. These experienced end users reported that their 1st generation installation had many gaps in WLAN coverage, and while they hoped to reduce the number of holes in coverage, they still had to de- sign their applications on the basis that 100% coverage could not be guaranteed. Another major process company reported that unit-by-unit rollout of WLAN was too difficult to be cost effective. There were too many phases and technology change was too rapid. Instead, they planned to cover whole sites, or at least design their complete coverage solution before be-
  • 19. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 19 Most manufacturers are using cradled mobile computers in the field rather than WLAN, but they do not see this as a major disadvantage at present. ginning permanent installations. Even those companies with limited ex- perience reported that they found a great deal of enthusiasm internally for deployment of WLAN, and believed that they would experience the “net- work effect” as WLAN became available. One topic that always arises with respect to WLAN is network security. Experienced users reported that this was another good reason to draw their IT organization in to support their plant efforts. Many of the authentica- tion, network management, and device management tasks that are needed for WLAN inside the fence are common to all types of mobile computing applications. The IT function already had experience with mobile comput- ing in other functional areas and could use the strategies, planning, and support plans already in use to some degree. Another area of difficulty that called for IT engagement was differing na- tional radio spectrum regulations and mobile phone services. Global manufacturers need to wrestle with these differences as they plan technol- ogy deployments across their enterprise. WLAN power emission regulations differ by country. Global manufacturers reported that they also weighed the more widespread availability of 3G mobile telephone services in Asia and Europe. While the North American market has lagged in this area, new services are now coming to market rapidly, and are being fac- tored into wireless networking plans. These services are notably not planned for use during emergencies, as many recent disasters have shown that they are not reliable through such events (hurricane Katrina in 2005 on the US Gulf coast and the Northeastern US blackout of 2003 are notable ex- amples). Another interview finding was that most manufacturers were using cradled mobile computers rather than WLAN. That is, these handheld computers were attached to the network only when they were docked in a cradle. When used in the field they were not networked at all but operated stand-alone. These manufacturers did not see this as a major disadvantage. Use of cradled computers reduced the difficulty of proceeding with mobility pro- jects by de-coupling the project from the more difficult issue of WLAN coverage and security. It allowed them to focus on applications and standardization without worrying about WLAN deployment at the same time. They felt that transition to WLAN would be less difficult in the future, while developing mobile applications was suffi- cient challenge for the present.
  • 20. ARC Best Practices • March 2007 20 • Copyright © ARC Advisory Group • ARCweb.com Leading process manufacturers report that their in-plant visibility programs have passed through three distinct phases of evolution. Recommended Best Practices Leading process manufacturers report that their in-plant visibility program has gone through three major stages as it has evolved. These stages of de- velopment are characterized by the type of organization created to manage the programs. The first stage could be called “vendors and visionaries”. This phase ended years ago for some firms, but most others are now in this stage of program development. This stage consists of one or more small pilot programs designed to test the benefits of greater in-plant visibility in a particular application. The program will have little out- side assistance and supervision. It may have limited visibility within the organization. The stage is really a proof-of-concept phase, which yields few long-term bene- fits beyond those proofs. The second stage of development could be called an “operational” stage, because here improvement programs that were most often focused on process operations grew into larger initiatives that were more thoroughly engineered, but remained limited in scope to the operations area. At this point, the initiative may begin to gain greater attention, but its management and execution is still centralized in a single team. The third phase is a fully professional enterprise-wide implementation of in-plant visibility programs. This does not mean that the scope of the pro- grams expands. Rather, the important change is that the task is now recognized as one that will be ongoing, that will have significant effects on business practices in many areas, and that can yield significant returns pro- vided it is executed in a manner that allows the gains and improvements to be sustainable and easily absorbed into other units of the business with similar business processes. Single plant pilot program Single plant deployment Corporate standardized deployments Stage 1 Stage 2 Stage 3 Highly Experienced Companies Have Progressed through 3 Stages of Their In-Plant Visibility Programs The team that is charged with managing this third phase consists of process experts, IT professionals, and business managers. It also extends across
  • 21. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 21 ARC recommends that manufacturers organize their programs to target corporate- wide use from the outset. multiple production organizations and sites, includes centralized staff or- ganizations and possibly external service providers. Two important aspects of this stage are that a consistent discipline of professional program man- agement is applied, and (more importantly) a corporate-wide team is built that is focused on managing these multiple initiatives to maximize the benefits. This team must manage more than technology changes to achieve that mis- sion. Corporate culture and long-term business practices will need to evolve as new technology enables greater visibility into field operations. However, this type of organization is required if changes are to progress rapidly from small-scale improvements towards a transformed plant opera- tion characterized by far higher external visibility and higher levels of collaboration. As such, ARC recommends that manufacturers who are not now leaders in this area should “skip” the first and second stage to some degree and organize their in-plant visibility programs from the outset so that they can suc- ceed across the entire enterprise. The requirements for this have been condensed into the best practices that ARC believes are characteristic of the leading manufacturers in this area. ARC has identified three major best practices regarding in-plant visibility from new technology. Each of these consists of other smaller practices, but leading process manufacturers show a keen awareness of these 3 points as they go forward. These are: • Address the cultural impacts of greater in-plant visibility • Implement using cross-functional teams • Design early implementations for full scale-up Best Practice: Address the Cultural Impact of Greater In-Plant Visibility As manufacturers deployed ERP during the 1990s, many existing and tradi- tional business processes were formally documented for the first time and were standardized across the enterprise through a common definition and implementation in the new ERP application. This standardization process
  • 22. ARC Best Practices • March 2007 22 • Copyright © ARC Advisory Group • ARCweb.com Cultural changes brought about by greater in-plant visibility will be a disruptive as was the adoption of ERP. was sometimes painful, especially when the participants did not realize the wide scope of the changes that were being put into place. Changes that will be brought about by increasing the visibility of work activities “inside the fence” will be as culturally disruptive as ERP. Organizations that succeed will need to be aware of the profound changes in long- established work cultures that will come about. In order to transition successfully, these cultural changes need to be recognized and addressed over a sustained period. One manufacturer confided that “to fully absorb a major cultural change takes 3 years for our organization”. One of the key success factors in this equation is sustained attention from upper management. However, the industry-leading companies have or- ganized and planned their initiative so that upper management and all relevant functional organizations are engaged in the process of change. Industry leading companies are steering their efforts to improve in-plant visibility by governing them with an active team that is charged with man- aging the overall changes brought about in operations and maintenance practices by new technology. That is an enormous responsibility, and it requires dedicated active participation by leaders in operations, mainte- nance, and IT. Industry leading firms have assembled such cross-functional teams and charged them with managing the overall change processes. These teams are working to define harmonized definitions, processes, and metrics. These are applied across the many specific projects and programs that are implemented within their company. Again, this is analogous to the ERP implementations of the 1990s, except that the processes involved here concern activities like process operations, equipment maintenance, equip- ment turnarounds, and new equipment construction. Of course, this task does not involve beginning with a blank sheet of paper, but rather the har- monization of practices that have developed independently to some degree through local practices at various manufacturing sites. Since on-site execu- tives are directly responsible for safety and performance of these manufacturing complexes, the steering committees are in no position to impose change from outside, but instead must apply “soft skills” to harmo- nize these practices through intensive engagement with responsible executives that is communicated and supported by all levels of manage- ment.
  • 23. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 23 The leading manufacturers have already assembled a “community of practice” within their firm to pursue greater in-plant visibility. Best Practice: Implement Initiatives Using Cross-Functional Teams Along with a corporate steering committee, leading firms are assembling cross-functional teams to design and implement new processes at each site where they are applied. These teams may share members with the steering committee, but their responsibility is the execution of specific programs at one or more plant sites. These programs will have far smaller scope and relatively short time-frames. The programs are part of an overall evolution of practices, but may focus on only a single area (operating rounds, safety rounds, environmental compliance, turnaround contractor management, etc). This second team does the work of defining the detailed scope of the improvement program, as well as planning and completing its deployment. Leading manufacturing firms build the team from recognized leaders in the af- fected disciplines (operations, maintenance, etc.) as well as their IT organization, IT service providers, equipment or software sup- pliers, and others as needed. These teams are part of what these manufacturers call a “community of practice”. That is their term for a group of leaders within the firm that works to implement new business practices and assumes responsibility for sustaining them. These “commu- nities of practice” exist at multiple manufacturing sites. They collaborate formally company-wide so that new knowledge and best practices are ab- sorbed quickly across the entire organization. The steering committee facilitates these collaborations. Best Practice: Design Early Implementations for Full Scale-up In order to maximize the benefits of visibility programs from the outset, the programs need to be developed either as throwaway experiments or as components of a sustaining business process. Obviously, manufacturers will invest greater resources in practices and technology that they expect to maintain in use for years. Likewise, these programs need to be developed with a view that they will be maintained over time and have a long life. Over-Plan and Over-Engineer Implementations that are expected to last need to be rigorously designed, tested, and deployed. Manufacturers recommend that the scope of each
  • 24. ARC Best Practices • March 2007 24 • Copyright © ARC Advisory Group • ARCweb.com Company IT and software team members can contribute especially with integration because they are familiar with the existing applications and the integration design disciplines. While the scope of any initiative should and must be limited, each program should employ the most advanced tools and professional implementation methods. initiative be well defined and limited. On the other hand, they report a need to develop harmonized and uniform business processes as they add new technology for in-plant visibility. They also want to capture and re-use their emerging best practices as widely as possible. ARC interprets these “conflicting” requirements as re- flecting a need for a professional implementation from the outset. While the scope of any initiative should and must be limited, each program should employ the most advanced tools and professional methods in its imple- mentation, regardless of how small it is in scope. Leading and more experienced firms are using a multi-discipline team approach to assure this. They include domain experts in operations and maintenance, IT experts, plant performance specialists, and expert software developers. ARC recommends that all manufacturers adopt this approach as soon as it becomes possible within their roadmap. This is how leading firms are as- suring the uniformity and quality of their practices, and are managing their implementations so that they can be sustained and supported for the long term. Implement Reporting from the Outset A second aspect of this practice is to integrate new practices with existing reporting systems from the outset. For example merely re-implementing a paper-based rounds and readings process electronically on a mobile com- puter does not add as much value as the integration of this newly captured information with existing decision support tools. The major enterprise software applications (asset management, performance, etc.) are known and in place, and the firm will already have some exper- tise in applying them. This is one area where the software development expertise of teams can yield divi- dends, as these practitioners will be familiar with the existing systems and will know the design disciplines that facilitate rapid and sustainable integration of new mobile applications with existing systems. Reporting should also extend to all new devices, networks, and other new technology equipment that is deployed in the plant. This new equipment should be monitored and managed as part of the IT infrastructure before it goes into service. This is especially true in the case of mobile or intermit-
  • 25. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 25 tently networked devices like mobile computers. Without this monitoring and management integration, IT support becomes too difficult and costly. Develop Corporate-wide Standards Wider use of shared practices across a process manufacturer will result in the need to further standardize a number of areas within the firm. The most important areas for these standards decisions are listed in the adjoin- ing tables. These have been grouped as “Business” and “IT” standards. However, in many cases these standards decisions have some impact in both business and IT. Business Standards — Commonality in operating and mainte- nance procedures is the most critical. The difficulty in implementing these standards depends upon the degree of col- laboration that is currently in place across the enterprise. While past practices contribute to this, mergers and asset acquisi- tions/disposals also contribute to the difficulty in harmonizing operating practices and procedures. The common framework chosen for operations and mainte- nance can then be reflected in the data models used in mobile applications that support these processes. Standardizing these provides a common framework for implementations at all sites. Here the key success factors are software design skills and deep knowledge of the various applications that are targeted for mobile operators. More standardizations that are mundane include such considerations such as local language support, local currencies, local engineering units, and per- formance metrics. Company-wide standards for some of these areas (asset performance metrics, for example) are likely already defined and in use. However, these “small” considerations point out the im- portance of taking such human factors into consideration. Failure to do so will impede the already difficult cultural challenge presented by greater company-wide harmoni- zation of processes and procedures. IT Standards — In the IT area, common standards for network infrastructure and for mobile computing plat- forms are important. Computing equipment for in-plant use is certain to be specialized, but large manufacturing organizations can leverage their size if their planning and Business Standards Operating Practices Maintenance Practices Application Data Structures Local Languages Local Currencies Engineering Units IT Standards Network Infrastructure Mobile Computing Platforms Cost Estimating Mobile Device Support Authentication and Security Server and Edge Device Provisioning Device and Network Monitoring Mobile Technology Roadmap
  • 26. ARC Best Practices • March 2007 26 • Copyright © ARC Advisory Group • ARCweb.com purchasing is coordinated across all plants. IT has experience in negotiat- ing purchase and support agreements with platform, software, and service providers. IT can also develop a common template for project cost esti- mates that will be valuable to all implementation teams. A most critical role for IT is to develop a roadmap for future computing platforms. Mobile computing and wireless networking is a rapidly chang- ing domain. The IT organization is already charged with supporting mobility in other organizational functions (sales and CRM, for example). Extending this responsibility to in-plant mobile computing is a natural fit, especially since the mix of enterprise and mobile applications is unique to each firm. While all these types of standards are already in place in most large manu- facturing organizations, they must be extended to cover in-plant applications and rugged mobile computing, plus the new software and ser- vices that will be used in them. List of Contributors Manufacturing companies that contributed information used in this report include: Alcoa Amgen Aramco Asahi-Kasei BASF BP Chevron Ciba Conoco Phillips DTE Energy Dow Chemical Dow Corning DuPont Equate ExxonMobil Georgia Pacific Goodyear Idemitsu Kemira Kerry Lyondell Noltex Nova Chemicals P&G Rohm & Haas Rompetrol Sasol Shell Valero Valio Ltd Water Corporation (AUS) Williams
  • 27. ARC Best Practices • March 2007 Copyright © ARC Advisory Group • ARCweb.com • 27 Analyst: Harry Forbes Editor: Dick Hill Distribution: MAS Clients Acronym Reference: For a complete list of industry acronyms, refer to our web page at www.arcweb.com/C13/IndustryTerms/ 3G 3rd Generation (Mobile Phone) ASM Abnormal Situation Management BPM Business Process Management CMM Collaborative Manufacturing Management CPM Collaborative Production Management CRM Customer Relationship Management EAM Enterprise Asset Management ERP Enterprise Resource Planning GPS Global Positioning System HMI Human Machine Interface IOp Interoperability IT Information Technology LAN Local Area Network OpX Operational Excellence OEE Overall Equipment Effectiveness PAM Plant Asset Management PDA Personal Digital Assistant PLM Product Lifecycle Management RTLS Real-time Location Services SCM Supply Chain Management VOIP Voice over Internet Protocol WLANWireless Local Area Network Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. For even your most complex business issues, our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. We focus on simple, yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value. All information in this report is proprietary to and copyrighted by ARC. No part of it may be reproduced without prior permission from ARC. You can take advantage of ARC's extensive ongoing research plus experience of our staff members through our Advisory Services. ARC’s Advisory Services are specifically designed for executives responsible for developing strategies and directions for their organizations. For membership information, please call, fax, or write to: ARC Advisory Group, Three Allied Drive, Dedham, MA 02026 USA Tel: 781-471-1000, Fax: 781-471-1100, Email: info@arcweb.com Visit our web pages at www.arcweb.com
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