VP, Business Innovation, Schneider Electric
The ultimate objective of any industrial enterprise is to maximize and control operational profitability, safely, in real time. This is even more critical in today’s manufacturing environment because of the ever-increasing speed of industrial business. For example, only a decade ago, many industrial plants had contracts with their electricity suppliers that designated the price they paid for a unit of electricity for an entire year. Today, on the open U.S. power grid, the price of electricity can change every 15 minutes.
Managing the business of industrial operations with monthly data from ERP reports is no longer feasible. You need to control operational profitability in real time. Accomplishing that requires controlling and measuring the reliability of plant assets and asset sets, down to the equipment level.
Manufacturers have relied on various process-control methods and applications for more than 100 years. The primary objective has always been to safely increase plant production. Originally, single-loop feedback control was the preferred method, but it has been replaced by state-of-the-art process control in the past fifty years. Today, coordinated multiple-variable approaches, coupled with dynamic-process models, have enabled some very sophisticated predictive-control strategies.
These advancements in process control have enabled manufacturers to continually increase operational throughput. However, there is an inherent risk in doing so. As industrial assets are pushed to deliver more, they move closer and closer to their reliability and safety thresholds. As a result, today’s assets are under continuous strain that is degrading their reliability and affecting overall operational performance.
Empowering today’s workforce with real-time operational profitability data and process-control and real-time reliability-risk information will turn them into business-performance managers.
To counter that risk and alleviate the strain, industrial-maintenance tools and practices, intended to improve asset reliability, have progressed and evolved over the past two decades. Classic break-fix models, otherwise known as reactive maintenance, have been expanded first to preventive maintenance, then to predictive maintenance, and finally to prescriptive maintenance. Each of these advancements led to a corresponding increase in asset reliability. But manufacturers were soon stuck in a cycle. Even as advanced tools and techniques were being applied to improve asset reliability, process control became more sophisticated. This countered reliability improvements every step of the way.
It turns out that more advanced technology isn’t what we need. What we really need to do is rethink how we address this age-old issue, and that begins with how we measure asset reliability in the first place.
Using real-time accounting can enable profitability measurement, which would then empower the workforce, through specialized asset analytics software, to control real-time operation profitability. The line from Operational Profitability Measurement to Operational Profitability Control can only be deployed when automatic reliability control is a reality. Since the technology isn’t quite there yet, in the current state, as with real-time manual-reliability control, the operator becomes a real-time profitability controller. However, as technology advances, reliability and profitability control could happen separately and automatically.