PRODUCTIONANDPERFORMANCE MANAGEMENT

YIELDS, LEAN, ANDPRODUCTIVITY IMPROVINGCONSUMER PACKAGED

GOODS KPISTHROUGHEFFECTIVE REAL-TIME HISTORICAL ANALYSIS
TURNING DATA INTO ACTIONABLE INFORMATION
Industry-wide thirst for performance visibility, not just within the four walls of one
plant, but across increasingly complex fleets of plants, is at an all-time high; improved
end-to-end productivity while improving overall product quality is THE focal point.
Manufacturing companies are investing significant time and effort developing
correlated key performance indicators (KPIs) for all stakeholders ranging from plant
management and product research and development (R&D) to sales and operations
planning (S&OP) groups. These knowledge workers rely on the KPIs to operate and
improve the agility, responsiveness, reliability, and profitability of their manufacturing
assets. When it comes to consumer packaged goods (CPG) manufacturing, this thirst
is all about expansion of brands with calculated control of the costs.
The top issues for todays CPG manufacturers are:
Globalization
Abbreviated newproduct development and launch (NPDL) cycles
Large stock-keeping unit (SKU) proliferation
Shrinking margins and the need to protect brand equity amidst spiraling costs
Plant managers need real-time decision support tools to make intelligent production
trade-off decisions, to identify production losses and improvement targets, and to
avoid costly waste and re-work. The next generation real-time data historians are
taking a proven technology designed for process environments where real-time
decision support was either a make or break decision of profitability. The needs of
high-speed, high-volume worlds of oil and gas, petrochemical refining, and energy
generation are increasingly finding a home in todays CPG manufacturing
environments as these industries become more time-sensitive to accurate information.
Unlike the data historians of the past, todays historians bring a host of capabilities
beyond high-speed streaming data acquisition and retrieval. This new generation of
real-time data historians aggregate information from control and operations
management systems across all areas of the facility, including:
Distributed control systems (DCS)
Programmable logic controllers (PLCs)
Scales
Ovens
Batch execution systems
Bar code readers
Manual data entry systems
Borrowing from the relational world, modern historians also accommodate a blend of
data structures and types including those defined by a users business process role to
accommodate the special needs of the processing environment.
Increasingly, real-time data historians are employed as the aggregator of information
from multiple sites; in essence, fulfilling the role of a real-time or operations data
warehouse to support high-level KPI generation and multi-site performance data
roll-up capabilities. In short, real-time data historians are positioned to play a key
architectural role in todays CPG production environment, both at the plant and at
the enterprise level.
IMPROVING CONSUMER PACKAGED GOODS KPIS
Yields, Lean, and
Productivity Improving
Consumer Packaged
Goods KPIs through
Effective Real-Time
Historical Analysis
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PRODUCTION AND PERFORMANCE MANAGEMENT
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Consumer Packaged Goods Manufacturing Realities
CPG companies face a multitude of unique challenges in the 21st century global
marketplace. Like their counterparts in the high-tech consumer electronics arena,
they must constantly innovate to differentiate themselves simply to maintain, or
hopefully increase, market share on razor-thin margins. At the same time, like their
life science counterparts, they are bound by government and industry regulations to
help ensure consumer health and safety without the luxury of life science operating
margins! SKU proliferation and global localization are a fact of life, as is the need to
protect brand equity and limit corporate liability. Every year, an increasing number of
product variants hit the shelves; new label claim regulations are enacted; and
formulations and designs are modified to account for country-specific legislation and
language around ingredients, materials, and attributes. Most of this is accomplished
without additional capital expenditures and marginal market growth. In other words,
todays CPG manufacturers are challenged to squeeze a lot more productivity from
existing assets assets that, in many cases, were designed and commissioned decades
ago to accommodate make-to-stock business models of the 20th century.
Simultaneously, they are faced with a host of complex influences:
Newglobal competition fromprivate-label brands
Increasing supply network complexity
Supplier management risk due to rising cost for rawmaterial and energy
Corporate sustainability initiatives
The CPG markets are becoming globally distributed while their retail customers
contractually demand pull lean supply chains, RFID, PDM and even vendor-owned
inventory. The result is a CPG plant that must become more adaptive, responsive and
agile. CPG companies need ways to work faster, better, and at lower cost, but most
importantly, smarter. These are no longer 20th century marketing buzzwords, but
21st century realities. How are companies planning to meet these challenges? Based
on 2006 research by the Aberdeen Group, Figure 1 shows how companies are
planning to respond.
Figure 1: How Companies Plan to Respond
Real-time data historians are part of the solution to these problems, so lets determine
when and how to apply data historians.
The Need for Speed
The need to capture large volumes of time-series data for literally thousands of data
points and retrieve it at a fraction of the time into data historians has been well
documented. The role has evolved to tie into a plants operations management (OM)
middleware in order to aggregate a wider set of sources of data and then deliver
information in many forms to operations and enterprise users. With this new and
expanded role based on more advanced capabilities, they are better termed operation
management historians.
A Manufacturing 2.0 historian today provides a data abstraction layer (sometimes
called metadata) between the real-time process realm and the more ponderous world
of the transaction-oriented business and financial systems[and] offers various
analytical mechanisms for aggregating, consolidating, and recalibrating data from
various systems in the production environment. Only recently have users begun to
understand the value of process data integrated with other types of operations and
product data sets to generate and help visualize a comprehensive view of the state of
the production systems.
Historians are designed to store vast quantities of time-series data in easily accessed
file structures that introduce the possibility of data and file compression during data
collection at the source. Today most, if not all, historians use data compression
models in order to make the most efficient use of available storage. Therefore, the
operations management historian is the data storage paradigm that provides the
efficient use of storage and provides the very high data access rates required in
modern CPG manufacturing operations.
Tuning Manufacturing Performance with Metrics
Todays quality focus, which has matured for CPG manufacturing visibility into the
performance of the manufacturing process, is prerequisite to improvement. KPIs are
the quantifiable measurements that reflect the critical success factors of the business
and critical-to-quality (CTQs) characteristics of operations. Even more importantly,
they provide the visibility necessary for management to recognize a developing
problem and take the appropriate corrective actions while those actions can still have
a positive impact.
KPIs are composite values. By this, we mean that KPIs are typically a calculated
analytic they arent just simple trends. Although for an equipment operator or line
supervisor, monitoring and alarming a trend of a single process variable like
temperature or flow may be sufficient to monitor the health and performance of a
particular process segment or phase.
In contrast, KPIs generally combine data from disparate sources. Overall equipment
efficiency or effectiveness (OEE), for example, is calculated from three other KPIs:
availability, performance and quality metrics. These primary KPIs are used by many
IMPROVING CONSUMER PACKAGED GOODS KPIS
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Applying Data Historians
manufacturers as a level one root cause metric to identify the next set of analytics for
investigation for a corrective action. They are calculated, alarmed, and updated
constantly, in step with ongoing operations, as leading indicators of whether or not
the performance targets of interest (quality, order fill, schedule adherence, and the
like) will be achieved under current operating conditions.
Furthermore, because KPIs vary by role, the KPIs must be presented in the
appropriate timeframe and terms to each group of stakeholders involved in the
process. This transformation of real-time production data into role-appropriate
actionable information is called enterprise manufacturing intelligence (EMI)
analogous to business intelligence, but for the real-time, manufacturing environment.
While many systems currently exist to collect and calculate KPIs, OM historians have
emerged as a next-generation information tool for CPG manufacturing that delivers
high-speed optimized data collection bolted to an analytical engine that can perform
the calculations required to support EMI. Furthermore, real-time OM data historians
are configured not only to perform KPI calculations, but to detect out-of-threshold
events and generate alarms to notify operators and supervisors that remedial actions
are needed now! The end result is a more efficient architecture that blends nicely
into the Manufacturing Convergence trend we see in todays global market.
Developing Operations KPIs That Count
Manufacturing organizations cannot and should not attempt to measure everything.
Metrics drive behavior and should be chosen carefully. Ideally, operational metrics
should be aligned with business strategies and goals. Metrics that translate operational
measures like feeds and speeds are most effective when they are linked to financial
outcomes. Metrics, then, should focus on measuring performance in the areas that
matter most to the companies success.
Choosing a metric is a collaborative effort. Several groups of stakeholders may need to
be involved in the choice of manufacturing KPIs, including, but not limited to,
manufacturing operations, plant management, information technology (IT), finance,
engineering, accounting, and the lines of business (LOB).
The measures chosen must be actionable; the processes must be able to be changed in
the short term, characterized change management process. Too often financial KPIs
actually constrain production, such as limiting the purchase of spare parts or
operations materials, while production is ramping existing products or introducing
new products. KPIs in all industries need be developed top-down and verified
bottom-up. The key is to ensure the chosen metrics (KPIs) are linked to a business
metric. MESA International states in Metrics That Matter, While there is no
algorithmic link between operational and financial metrics, the relationship is clear;
activities in manufacturing operations are a major driver of financial results. MESAs
study demonstrates that companies having sound manufacturing metrics that support
their business processes improve their manufacturing and business performance at a
ratio of 2 to 1. The key is to understand which metrics drive the ongoing success of
the business.
PRODUCTION AND PERFORMANCE MANAGEMENT
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OM historians have
emerged as a
next-generation
information tool for CPG
manufacturing...
The CPG Solution Matrix, Table 1, shows common metrics that are monitored
within the CPG industry.
Table 1: CPG Solution Matrix
Automation World reports that measures of yield and productivity top the list of KPIs
monitored. However, metrics by themselves do not improve performance; they only
identify areas where changes need to be made. They are an indicator to drive the
event or process of root cause analysis and correction. The organizations that have
been most successful in improving their competitive positions are the ones that have
as few KPIs as possible, link them to business goals and refresh them frequently
through periodic review.
The Myth of Standard KPIs
KPIs are not necessarily the same across different businesses or organizations. Also,
the method of calculation for the same KPI may vary. The KPIs support the
organizations goals and the organization needs to set targets for the KPIs that move
them toward their goals. KPIs are current measures (less than 24 hours) while most
organizational and financial measures are past measures. Past measures are never key
performance indicators. The number of KPIs should be kept small (more is not
always better) so they can get the focus of attention within the organization and be
the metric for root cause analysis.
IMPROVING CONSUMER PACKAGED GOODS KPIS
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CPG Solution Matrix
Justification Physical Assets Information Assets Key Metrics
Legal Requirement Improve compliance with
multi-government
regulations
Minimize delays due to
customs intervention with
multi-government
regulations
Better control and accuracy
of data
Reduced license non-
compliance
Compliance rates
Advanced shipping notices &
UCC128 Container labeling
errors
Revenue Enhancement Improve production
reliability:
- Higher output
- Better quality
Improved employee
productivity
Reduced plant downtime
Overall Equipment
Effectiveness (OEE)
Mean Time Between Failure
(MTBF)
Mean Time to Repair (MTTR)
Cost Reduction Reduce number of obsolete
or inactive capital assets
Improve spare parts
optimization
Improve completion rate on
PM work orders
Improved supplier/source
data
Improved asset visibility and
allocation
Fewer faulty installations
Maintenance costs per unit
Capacity utilization
Predictive maintenance
monitoring (Maintenance
events per cycle)
Risk Mitigation Reduce risk of hazardous
leaks and/or spills
Reduce risk of non-
compliance
Reduce risk of non-
compliance
Increase employee
satisfaction
Reduction in penalties
Reduced Time to Productivity
Competitive Advantage Improve customer
satisfaction
Improve supply and demand
Improve public record/image
Improved public
record/image
Fewer defective products
Industry benchmark
performance
Quality improvement (first-
pass yield)
Speed Counts
Time is always of the essence. Timeliness is the critical factor in the ability to take
corrective actions that have an opportunity to change process outcomes. Factors such
as speed, frequency of data collection, frequency of operator feedback, and the latency
between operation and measurement have an impact. The sooner corrective action is
initiated, the smaller the impact of the situation (often by orders of magnitude).
Hence, real-time is the ideal, but as a minimum, KPIs need to be revised, updated
and reviewed daily based on the demand state of the plant and business. The best in
class CPG organizations that identify and correct production problems to improve
the businesses bottom line performance have several things in common:
Well analyzed and chosen KPIs that are refreshed frequently
Key operations software such as integrated MES, LIMs and EAM
Role-based OMPortals mapped to business process and production workflows
Data historians as their data collection and aggregation paradigm
Role-based OMPortals and the Rockwell Automation Incuity Product
Accelerate Operations Performance
There is an additional requirement for OM historians to be integrated with the
operations and control systems in order to provide an additional level of capability for
drilling down into the data in order to find root cause. Role-based OM Portals are
simply a way to present KPI, alarm and event, and other role-appropriate information
in an easily understood graphical presentation for manager, supervisor, or the
operator or mechanic addressing a directed event.
The Rockwell Automation Enterprise Manufacturing Intelligence (EMI) solution
integrates plant-floor production data and enterprise business information from
disparate sources everywhere in a company and provides context for the data to enable
better business decisions to be made at every level. Combining a manufacturing portal
product like Incuity with the OM historian based on the OSIsoft PI system, will
provide Rockwell Automation with a unique industry application for CPG
manufacturers. CPG companies are now under tremendous pressure to increase their
profitability and competitiveness in a global economy. The key to improving
profitability is not for companies to generate more data but to gain a better
understanding of the data they already have in multiple applications across the
enterprise. The capability of Incuity leads to an ability to bring established legacy data
stores together in what is referred to in industry as a federated data system. This
collection and aggregation of data from disparate sources without delay and the
delivery of actionable information in interactive reports and dashboards brings a new
level of agility to the CPG industry.
EMI research has repeatedly demonstrated that a highly graphical portal utilizing
trending with A&E are the key to establishing the early warning and predictive
capabilities required by plant management. This interactive tool quickly aggregates,
calculates, and coordinates the raw data to provide drill down for root cause
analysis. Business logic can be applied to formulate the actions required to correct the
trends. The ability to drill down and initiate alerts also has positive impacts on
performance. The OM infrastructure must also support the delivery of plant-level
PRODUCTION AND PERFORMANCE MANAGEMENT
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information to users throughout the enterprise via the Internet or wireless devices. An
OM portal should provide enterprise-wide visibility of manufacturing data. MESA
International states, Its increasingly clear that those who have plant portals and MES
are more likely to know whats happening in plant operations and improve their
business performance rapidly.
KPIs Enable Performance Management Methods such as Lean, TOC, and
Six Sigma
KPIs applied with continuous improvement (CI) methods give everyone in the
organization a clear and concise picture of what is important to the business.
Everyone across the organization is focused on responding to meet or exceed the KPIs
to enable performance management by creating Lean Visual Controls and posting
them where everyone can see themshow the target and show the progress. These
drive a CI culture for change toward adaptive manufacturing through operations.
In Figure 2, FactoryTalk Historian SE architecture depicts the central role that OM
historians play in the 21st centurys adaptive manufacturing IT architecture.
Figure 2: FactoryTalk Historian SE Architecture
Utilizing compressed data storage algorithms to manage and store vast quantities of
data in a small storage format, multiple data sources over multiple OM and enterprise
servers are easily mapped and contextualized to produce sophisticated analytics.
These trigger actionable intelligence in terms of KPIs for event-driven workflows.
Utilizing FactoryTalk ProductionCentre, with its ISA-95 plant/production model
and workflow engine, FactoryTalk Historian SE data is able to trigger the production
MES functional capabilities as well as to have the ability to tailor the execution
processes to individual plant requirements. This capability is augmented and
extended with the IBM WebSphere technology and sets the FactoryTalk platform
apart from the competition. Designed to be easy to install, configure and manage,
FactoryTalk Historian SE delivers a major advancement in the rapid time to value. It
provides the capability to support CI methods with the ease of computation of
production KPIs.
IMPROVING CONSUMER PACKAGED GOODS KPIS
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PRODUCTION AND PERFORMANCE MANAGEMENT
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Conclusion
Consumer packaged goods companies are experiencing an unprecedented set of
competitive pressures as they move into the 21st century. Their key to competing is to
understand their manufacturing systems critical to quality characteristics and monitor
them closely through the use of strategically selected key performance indicators in
order to avoid costly excursions from required quality. The development of KPIs
fosters the use of the lean manufacturing and continuous improvement initiatives that
are critical to the 21st century adaptive manufacturing environments.
FactoryTalk Historian SE has the power and flexibility to be the CPG manufacturing
middleware and meet the needs of the complex CPG manufacturing environments
for KPI calculation and presentation, product genealogy and traceability, and
increased productivity and profits. It enables CPG companies to work faster, work
better, work more economically, and most importantly, work smarter.
INTEGRATED CONTROL AND INFORMATION SYSTEMS
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Publication FTALK-WP008C-EN-E January 2010 Copyright 2010 Rockwell Automation, Inc. All Rights Reserved.
Supersedes Publication FTALK-WP008B-EN-E June 2008
FactoryTalk, Incuity, and Rockwell Automation are trademarks of Rockwell Automation, Inc.
All other trademarks are the property of their respective companies.