Driving Real Time Profitability.pdf

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Driving Real Time Profitability Through Asset Performance Excellence

Peter G. Martin PhD

Vice President and Fellow

Invensys Operations Management

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Today’s Business Climate

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Suppliers CustomersExecutive

Management

Employees

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Share

Holders

Board   “ …CEOs feel

understandably

Executive

Management!

,

ax to fall any moment.”

BusinessWeek

Suppliers CustomersEmployees

The Economic Downturn has only made matters worse!!!

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high   Trade

Craftsmen

    a

    n    s     h     i    p Industrialization

ScientificManagement

     C    r    a     f     t    s

Organization of Labor 

low

1850 20001900 1950

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high   Trade

Craftsmen

    a

    n    s     h     i    p Industrialization

ScientificManagement

Information

RevolutionPerformance

     C    r    a     f     t    s

Organization of Labor 

 Automat ionRevolution

Gap

low

1850 20001900 1950

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Wall Street Journal

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  …Laborer to Performance Manager

high   Trade

Craftsmen ProfitCraftsmen

    m    a

    n    s     h     i Industrialization

ScientificManagement

Information

Craftsmen

     C    r    a     f     t    s

Organization of Labor 

 AutomationCraftsmen

low

1850 20001900 1950

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What is Required from Us?

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Real Time Profitability

Production$

$   $

Environment & Safety

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Business

Excellence

Profitability BasedAsset

Excellence

Operations

Excellence  Asset

Performance Engineering

Excellence

Excellence

Page 15

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 Achieving Excellence

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Excellence

o g ngs

Business

Excellence

Operational

ExcellenceDo Things RightDeliver Right

Value

Can You be Excellent at All Three?

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Excellence

Win the Season

Business

Excellence

Operational

ExcellenceWin this RaceGet Bonus

Which Measures Take Precedence?

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Strategic

Strategic

Performance

MeasuresExcellence (Quarterly)

Key

Excellence   Excellence

ccoun ng

(Monthly)Performance

Indicators

(Daily)

Can These Competing Measures Align?

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Strategic

Strategic

Dynamics –

O erational

Excellence   ExcellenceDynamics –

Real Time

Dynamics -

Real Time

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Creating Strategic Empowerment

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CEO

Business Measurement   Business Operation

CFO   COO

Finance   EnterpriseManagement

Production

Monthly

Management

Plant ResourceManagementReal-Time

a y

Manufacturin Resource Base

22

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CEO

Business Measurement   Business Operation

CFO   COO

Finance   EnterpriseManagement

Production

Monthly

ProductionManagement

Plant ResourceManagementReal-Time

a y Measures

Real-TimePerformance

Measures

Manufacturin Resource Base

23

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DynamicPerformance

Measures

1. OEE2. Energy2 Cost3. Contribution Margin4. Cycle time

..

Strate ic

.

Business Guidance

Filter 

Real Time Accounting

KeyPerformance

Contribution MarginEnergy1 CostEnergy2 CostMaterial1 Cost.

OEECycle Time

Waste / ProductionFirst pass yield.

Measures   Indicators

..   ..

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Productivit 

Excellence

Enterprise Resource Planning Level

Support

Functions

(Real Time)

Support

Functions

(Transactional)

Manufacturing Execution Level

Automation Level

Plant

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Profit-Based

 Asset Performance Excellence

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Operations

Excellence Profit-based Asset

Performance

     Y     i    e     l     d

= 

 AssetExcellence

Maintained State

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Profit

Excellence

AssetExcellence

OperationsExcellence

Predictive   OptimizationMaintenance Production

Preventive

 Advanced

Control

KPIs KPIsBusiness

Performance

Measures

Reactive   Control

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Asset Modeling Analysis

Asset   Asset Performance = Actual/Ideal Asset

Ideal

Yield (0.0  – 1.0)

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Asset to Profit Modeling Analysis

 Asset Performance

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• Clear definition of “ victory”

•  

• Peak performance from assets• Asset Performance

• Business Performance

• Clear performance measures foreach team member 

• Strategic execution

What applies to racing

applies to industrial operations!

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