IT in Manufacturing

IT investments shift to the plant

June 2011 IT in Manufacturing

Collaborative production management (CPM) is one of the hottest automation investment spaces in today’s process industries. After a couple of tumultuous years, companies once again are ramping up spending in CPM solutions. There are many reasons for this upsurge.

Most process manufacturers have already implemented ERP and other business systems and now realise that they can gain additional value through better integration of plant and enterprise systems. Enterprise systems’ primary focus is on demand forecasting, production planning and material sourcing and tracking. Unfortunately, most plants today still operate as a standalone entity, focused primarily on real-time process control. Business systems have little influence on the plant other than gross target shifts and reporting. The gap between enterprise and plant systems reduces asset effectiveness due to overly conservative planning from uncertainty in process capability and asset availability. This results in wasted resources, surplus inventory and lost business opportunities.

Today, the emphasis of IT investment is shifting from ERP to manufacturing systems. Organisations are looking at the enterprise as a whole and making strategic purchasing decisions to roll out common CPM applications across all facilities. Organisations can achieve significant benefits through economies of scale, utilising IT resources more efficiently, aligning IT with business needs better, reducing implementation costs, lowering support and maintenance costs, and improving integration to create greater information visibility across the enterprise.

What is the big deal?

Following the recession-induced cutbacks of recent years, companies are rushing in to purchase CPM solutions at a record pace. Many companies, having invested heavily in ERP and other enterprise applications, now find that they are not achieving the expected ROI. They understand that to extract more value from their investments and to compete more effectively in the global market, they must better integrate their enterprise and plant systems. Companies are standardising on best practices and application across their enterprise and making CPM purchasing decisions, not for just one plant, but for most (if not all) plants globally.

CPM offers impressive potential benefits. When organisations begin to align processes and strategies, technology, and people across the enterprise, CPM becomes indispensable. By using standards, the same strategic focus and best practices can be used in all processes and across manufacturing facilities globally.

With integrated systems, employees can make better decisions based on more complete and real-time information. They can analyse data, identify problems, and identify and quantify results rapidly in terms of the potential business impact. In other words, using CPM, companies can integrate applications, business benefits, and strategies with actions using real-time information.

Collaborative production systems can help users achieve significant savings through better collaboration between plants, use of standards and best practices, improved knowledge management, improved workflow and process controls and faster time to market for new or old products. CPM solutions improve information flow from the raw material to the manufacturer to the business system and to the supply chain. Best of all, the benefits are sustainable.

CPM core value proposition still applies

CPM has three main functional areas: plan, operate and inform. The plan segment consists of functions such as short-term production planning, plant simulation and modelling and scheduling. The plan functions determine what products to make, when to make them and what equipment to use. The operate segment emanates from the need to continuously find new and better ways to control process equipment, execute production and operate plants more efficiently. This segment includes dispatching, electronic work instructions, resource management, workflow management, etc. The purpose of the inform category is to gather, store, organise and communicate data and information. It includes data collection, performance analysis, reporting, and role-based KPI visibility.

At a fundamental level, CPM helps users cut costs, improve quality and efficiency and drive innovation to get products to market quicker. In addition, CPM helps users to collaborate and improve real-time performance management initiatives, which in turn improves asset effectiveness and profitability. The latest CPM innovations can help manufacturers improve visibility into operations, provides better links to business objectives and permit increased agility to respond to volatile market conditions. These features help companies optimise production activities and synchronise supply chains based on real customer requirements.

ARC’s recent CPM for the Process Industries Worldwide Outlook Study covers some of the objectives, challenges, trends, drivers and strategies that most manufactures now face and examines the software tools that are available to help a company implement the best standards for the products, processes, operations supply chain and industry.

For more information on contact Paul Miller, ARC Advisory Group, +1 781 471 1126,,

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