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Driving Real Time Profitability Through 

Asset Performance Excellence
Peter G. Martin PhD
Vice President and Fellow
Invensys Operations Management
Today’s Business Climate
Owners Owners
Suppliers Customers
Executive
Management
Employees
“ But it’s irrational
investor behavior
Shareholders!
investor behavior
that really
undermines things”
PRWeb
Customers
Executive
Suppliers Customers
Executive
Management
Suppliers
Employees
Share
Holders
Board “ Boards are newly empowered and Board Boards are newly empowered and
more active in all manner of
corporate affairs…”
Executive
Management
BusinessWeek
Suppliers Customers Employees
Share
Holders
Board
“ …CEOs feel
understandably
beleaguered expecting the
Executive
Management!
beleaguered, expecting the
ax to fall any moment.”
BusinessWeek
Suppliers Customers Employees
The Economic Downturn has only made matters worse!!!
From
To
Current Market Drivers
Profit Management
Process Mgmt
l i i Real Time Business
Transactional Business
H li ti P ti
Empowering People
R l i P l
Holistic Perspective
Island Perspective
Empowering People
Replacing People
Breaking the “ Labor” Mindset
p
high
Trade
Craftsmen
m
a
n
s
h
i
p
Industrialization
Scientific
Management
C
r
a
f
t
s
m
Organization of
Labor
Public Education
low
1850 2000 1900 1950
Public Education
p
high
Trade
Craftsmen
m
a
n
s
h
i
p
Industrialization
Scientific
Management
Information
Revolution
Performance
C
r
a
f
t
s
m
Organization of
Labor
Public Education
Automation
Revolution
Gap
low
1850 2000 1900 1950
Public Education
Wall Street J ournal
The Solution The Solution…
Laborer to Performance Manager
p
high
Trade
Craftsmen
Profit
Craftsmen
m
a
n
s
h
i
p
Industrialization
Scientific
Management
Information
Craftsmen
C
r
a
f
t
s
Organization of
Labor
Automation
Craftsmen
Public Education
low
1850 2000 1900 1950
Public Education
What is Required from Us?
Real Time Profitability
Production
$
Energy
Material
Energy
$
Material
$
Environment & Safety
Business
ll Excellence
Profitability 
Based
Asset
Excellence
Operations
Excellence
Asset
Performance 
Engineering
Excellence
Excellence
Page 15
Achieving Excellence
Strategic
D Ri ht Thi
Strategic
Excellence
Do Right Things
Business
Excellence
Operational
Excellence
Do Things Right
Deliver Right
Value
Can You be Excellent at All Three?
Strategic
Wi h S
Strategic
Excellence
Win the Season
Business
Excellence
Operational
Excellence
Win this Race Get Bonus
Which Measures Take Precedence?
Strategic
Strategic
Performance
Measures
Excellence
(Quarterly)
Business Operational
A ti
Key
Business
Excellence
Operational
Excellence
Accounting
(Monthly)
Performance
Indicators
(Daily)
Can These Competing Measures Align?
Strategic
Excellence
Strategic
Dynamics –
Real Time
Excellence
Real Time
Business Operational
Business
Operational
Business
Excellence
Operational
Excellence
Business
Dynamics –
Real Time
p
Dynamics -
Real Time
Empowering in Real Time Empowering in Real Time 
Creating Strategic Empowerment
CEO
Business Measurement
Business Operation
CFO COO
Finance
Enterprise
Management
Production
D il
Monthly
Management
Plant Resource
Management
Real-Time
Daily
Manufacturing Resource Base
22
g
CEO
Business Measurement
Business Operation
CFO COO
Finance
Enterprise
Management
Production
D il
Monthly
Production
Management
Plant Resource
Management
Real-Time
Daily
Measures
Real-Time
Performance
Measures
Manufacturing Resource Base
23
g
Dynamic
Performance
Measures
1. OEE
2. Energy2 Cost
3. Contribution Margin
4. Cycle time
.
.
Strategic
.
Business Guidance
g
Filter
Real Time
Accounting
Key
Performance
Contribution Margin
Energy1 Cost
Energy2 Cost
Material1 Cost
.
OEE
Cycle Time
Waste / Production
First pass yield
.
g
Measures Indicators
.
.
.
.
.
.
Productivity Excellence y
Enterprise Resource Planning Level
Decision Reporting Decision
Support
Functions
(Real Time)
Reporting
Support
Functions
(Transactional)
Manufacturing Execution Level
Automation Level
Plant
Profit-Based
Asset Performance Excellence
Operations – Maintenance Conundrum
a
t
i
o
n
a
b
i
l
i
t
y
U
t
i
l
i
z
a
A
v
a
i
l
a
Operations
Excellence
Profit-based
Asset
Performance
Excellence
Y
i
e
l
d
Excellence
Operations Excellence = f(Asset Excellence) Operations Excellence f(Asset Excellence)
Asset
Excellence
Maintained State
Profit
Excellence
Asset
Excellence
Operations
Excellence
Predictive Optimization
Maintenance Production
Preventive
Advanced
Control
Ma ntenance
KPIs
Product on
KPIs
Business
Performance
Measures
Reactive
Control
Asset Modeling Analysis
Asset
Model
Asset Performance = 
Actual/Ideal Asset
Ideal
Model
Yield (0.0 – 1.0)
Asset/Asset Set Asset/Asset Set
Asset to Profit Modeling Analysis
Asset Performance
Profit Performance Profit Performance
• Clear definition of “ victory”
• Well coordinated teams • Well coordinated teams
• Peak performance from assets
•Asset Performance
•Business Performance
• Clear performance measures for
each team member
• Strategic execution
• Real Time execution • Real Time execution
What applies to racing –
applies to industrial operations!