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 spendingin CPM solutions. According to recent ARC research, the CPM for the process industries market is especially hotin Australia.
While global revenues for software and services in this category grew by approximately 15 percent worldwide in 2010 compared to the previous year, revenues grew by more than 30 percent in Australia for the same period.
And while shipments to the mining industry remained traditionally strong, our research indicated a real upsurge in shipments to both the oil & gas and electric power segments in Australia.
There are many reasons for this overall 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 sourcingand tracking.
Standalone entity
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 systems 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 creategreater information visibility acrossthe enterprise.
What’s 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 enter-prise 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 manufacturingfacilities 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 rap-idly 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 sys-tem and to the supply chain. Best of all, the benefits are sustainable.
Core value proposition
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.
Tom Fiske is Senior Analyst Automation & Supply Chain, ARC Advisory Group.