Plant To HQ: Connect Me Up, Scottie

Largely overlooked amid all the attention given to installing enterprise-resource-planning (ERP) systems during the last decade is the connection to the plant floor. Despite the fact that plant-floor data often yield information that is about as strategic as you can find, plant-based systems tend to operate in a near vacuum, with few links to the rest of the business. Except for certain bare essentials such as tracking inventory and customer orders, ERP systems generally don't support the flow of information from the factory floor. "The production plant is left out of strategic IT initiatives," states a June report on Plant to ERP Integration by analyst Roddy Martin of AMR Research Inc. That's putting it mildly. In fact, at many manufacturing companies, people in the plant have learned to set up their own systems to manage quality, monitor key performance indicators, control shop-floor activities through manufacturing-execution systems (MES) or process-information-management systems, or track maintenance activities. One major auto manufacturer operates three different plantwide networks: one for information systems (IS), one for manufacturing, and one for engineering and design. "Imagine the pain that causes for the poor plant operators," says Martin Piszczalski, president of Sextant Research, an Ann Arbor, Mich., information-technology research firm specializing in the automotive industry. In some companies, there traditionally has been a tension or mistrust between the corporate IS group and plant-level managers and workers. "Manufacturing-execution systems are a classic example of where organizational interfaces and political competitions manifest themselves," Piszczalski observes. The end result, he says, begs the question: "Where does manufacturing take over, and where does IS take over?" Some software companies are moving aggressively to link ERP with plant-floor systems. MES software firm Wonderware Corp. in May announced plans to acquire Marcam Solutions Inc., an ERP software vendor. "Real-time plant-floor data should be the controlling information in a manufacturing environment and should flow upward through the business enterprise systems," says Lance Allega, a spokesman at Wonderware in Irvine, Calif. Invensys PLC, Wonderware's parent company, appears to be on the right track in trying to achieve a tighter link between its customers' plant activities and business information systems. The goal -- to bridge the considerable gap between the plant floor and the office -- is laudable. Yet another area where companies could use better connections with ERP is asset and maintenance management. Supporting these activities is enterprise-asset-management (EAM) software, which enables companies to track the costs and time spent maintaining, repairing, and replacing equipment. One example is the Passport 7.0 package from Indus International Inc., an EAM vendor for the energy and telecommunications industries based in San Francisco. "The Indus solution has saved us money by helping us make repair-or-replace decisions," says Tom Roach, program contract manager at Southern California Edison (SCE). The Indus software is used to track and report a host of equipment service measures, including mean time between failure, mean time to repair, warranty information, reliability-centered maintenance-failure analysis, description of failure, consequence of failure, root cause of problem, and remedial action taken. Nor is this information being used in a vacuum. At Edmonton Power, which manages three electricity-generating plants for the Canadian province of Alberta, the Indus system is integrated with the company's Oracle Corp. corporate software applications. Incidentally, since installing the EAM package, Edmonton Power reports an 11% gain in the number of work orders completed and 8% fewer work orders generated. Similarly, SCE's Roach reports that having this kind of information available at the business management level -- not just at the plant level -- has proven invaluable. "The power of having that information enables us to put together a business case to get the money we need," he says. "We can convey to upper management what the risks are if they do not spend the money. The resulting maintenance plan helps us to ensure cost-effective, reliable electric service." In other words, when business systems and plant systems communicate, there's a payoff to the company and its customers.

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