IT Optimisation | The Push for Productivity

Source from:  tobaccojournal.com 07 Jan 2008 02/13/2008

Software environments such as predictive maintenance and manufacturing execution systems can enhance manufacturing efficiency considerably. In the tobacco industry, advances in technology are the only source of lasting growth in productivity. From a financial perspective, productivity is one of the most closely watched indicators of a company's health. Productivity gains are mainly coming from transient factors, such as blend rationalisation and ingredient reduction, with similar blends being sold in more markets; and the reduction of SKUs (stock keeping units) for both finished and unfinished goods. This not only lowers inventory management overhead but also improves the administration of the product portfolio and the supply chain. On the manufacturing front, the main emphasis has been a reduction in the number of production sites and scaling-up of operations at the ones remaining. In these locations, corporations are lowering costs further by rationalising the manufacturing process and reducing the types and number of machines. Although these steps have influenced both measured and real productivity, advances in technology are the only source of lasting growth in productivity. In the tobacco business, as in other process- and batch-based industries, such advances are propelled by developments in machinery and through advances in software-based production and manufacturing systems. Speedy operations Since the early days of automation, when James Bonsack invented the first cigarette-rolling machine in 1880, the industry has experienced spectacular productivity gains. From an output of 200 cigarettes per minute (cpm) in Bonsack's days, the fastest machines now produce up to 20,000 cpm, which in actual production delivers a sustained output of a million cigarettes per hour. Operational speed, however, is just one element of productivity. Other factors that play a crucial role are quick changeover between brands and sizes, the ability to integrate the machines into a corporate-wide IT system and reduced downtime and lower maintenance. Of the millions of euros companies spend on plant maintenance each year, over half the amount is spent on unexpected machine failure. As production speeds continue to go up and multi-shift operation become the norm, downtime is in increasingly short supply. This not only puts pressure on maintenance schedules, but also increases unit costs by reducing output. Enter predictive maintenance systems – an IT environment which monitors the "health" of a production machine using a set of software tools that function as a sort of "expert system". These are essentially knowledge-based systems, which can identify an impeding problem from "experience" stored on a database. For instance, G.D's predictive maintenance system is based on operational data collected over a one-year period from three machines. Predictive maintenance systems use a variety of sensors to monitor and record machine operation data and critical indicators that predict component failure. This way, impeding failures can be identified before they happen. For instance, before a part fails, various parameters, such as temperature and power consumption, start deviating from the norm long before they become evident even to the most skilled operator. Predicting maintenance intervals Another advantage of predictive maintenance is that it permits the scheduling of maintenance well in advance and not when a problem occurs. It also eliminates the need for "preventive" downtime associated with periodic disassembly and inspection to determine equipment condition. A predictive maintenance system is integrated into a factory-wide manufacturing execution system (MES), which, in turn, is part of a company's enterprise-wide production and planning environment. Companies use manufacturing execution systems to access real-time data from the production floor. In the toba-cco industry these data include production schedules and the availability of materials. MES also includes maintenance schedules, the status of work in progress and a host of statistical data, such as productivity figures, benchmarking, and labour utilisation. Fifteen or twenty years ago many MES solutions were developed in-house by companies to meet their specific requirements. As is typically the case with such systems, programmers write code to add new functionality as and when the need arises. One of the drawbacks of this approach is that there is often a lack of documentation and as such, over the years, compatibility suffers and maintenance and system upgrades become increasingly difficult. The problem became really evident when companies started to implement corporate-wide enterprise software. To address the issue several MES vendors started offering products that can be seamlessly linked from the factory floor to the boardroom. Such corporate-wide systems include supply chain management, customer relationship management, performance management, and accounting and planning functions. In Europe, one of the leaders in manufacturing execution systems is Siemens Automation with its Simatic IT solutions. The platform has a modular approach to enable the integration of machine- and industry specific software into individual solutions. For instance, Hauni works with Siemens Automation to deliver MES systems for the tobacco industry. Xavo, another Siemens automation solutions partner, has also developed its Promexx suite – an integrated manufacturing execution system – for the tobacco industry. SAP compatibility required Irrespective of who is supplying such automation tools, they need to be compatible with SAP's solutions, because most large tobacco companies are using one or more of SAP's enterprise prod-ucts. Philip Morris, for instance, is using SAP's products for enterprise resource planning and supply chain management. For supplier relationship management however, it was using Frictionless SRM, from a company of the same name based in Cambridge, Massachusetts. In May 2006, SAP acquired Frictionless Commerce, and now a large part of Philip Morris' supplier relationship management is running on a SAP product. In general, there is an industry-wide trend towards rationalising supplier networks. Over the past decade, the leading tobacco companies, for instance, have reduced the number of suppliers by a third. In software the trend is similar, with SAP and Siemens Automation leading. Although new entrants and smaller players are at a disadvantage, for them the outlook is not one of total gloom. Information technology is an unpredictable market, notable for its bouts of disruptive and sweeping innovation. Many of the major players today, including SAP, were minnows just a few decades ago. Indeed, software systems are complex beasts and the complexity is only increasing as companies continue their quest for productivity improvement across their global operations. In such a scenario, new entrants and the smaller players can still identify opportunities and develop niche solutions that serve these needs. Enditem