Up Time Magazine - December 2008/January 2009 - (Page 10) would have required fifty people in the past. The basic value proposition for the introduction of automation technology was typically based on headcount reductions that could be achieved. Many manufactures seem to have viewed these reductions as a double benefit to the company. First was the cost reduction for not having to pay the displaced laborers. But second was the thought that there would be less of the low-level laborers to have to manage and worry about. The culmination of the technology replacing people trend took place in the 1980s when a number of management scientists and engineers supported a notion referred to as “lights-out manufacturing.” The thought process behind this trend was that technology may have advanced to the point at which no frontline workers would be required at all, and without people in the plants there would be no need to turn on the lights. This was a short-lived movement due to the fact that the technologists found they could not anticipate every possible issue or problem that may arise in a plant and that at least some number of people must be in the plant, if for nothing else, at least contingency responses. All of this has left a residual mindset in both industrial management and engineering that frontline personnel are a necessary evil that would be eliminated if possible. This has further led to an attitude prevalent across industry that the actions and activities of these frontline laborers have to be contained to only those essential to keep the plant operating. A good example of this mindset can be found in the design approach taken to the software in industrial workstations. This software is designed around the concept of “operation by exception,” which basically means that the process operator is not supposed to do anything if the process is operating in a reasonable manner (except, perhaps read the sports page). When something unexpected happens, an alarm will cause the operator to follow a predefined procedure that should bring the alarm condition under control. Once the alarm condition has been addressed, the operator goes back to the newspaper. Additionally, engineers have developed and deployed advance control and other advanced techniques designed to operate the plant better than the operators could by themselves. The attitude of protecting the plant from the frontline laborers has continued, even while the average education and skill level of the labor force has been steadily rising. I have been in control rooms in which the frontline process operators all had college educations, and were still viewed as the unskilled, uneducated laborers of the early industrial revolution. Organizational Silos Having worked with industrial organizations for over three decades, I have frequently heard the rejoinder that “islands of automation” are to blame for the difficulties in developing higher performing operations. Although there is certainly much truth to this, I have found that “islands of organization” within industrial companies present a much more formidable barrier to performance improvement. As industrialization took hold and grew, the complexities introduced to manufacturing businesses became very challenging. In early industrial plants the same person might operate and maintain the equipment, design and commission new production areas and even account for the business. As more complex manufacturing systems have evolved, this level of generalization is just not feasible, which has led to the era of specialization. Professionals specialized in engineering, accounting, management, purchasing of materials and shipping of finished products while frontline labor specialized in operations and maintenance of the equipment. This naturally resulted in separation of departments by function which, in turn, led to organizational silos. The development of specialists was necessary to the operation of the increasingly complex plants, but the development of organizational silos resulted in huge inefficiencies across organizations. Today it is not unusual to find maintenance departments that never directly communicate with operations or production teams. In some organizations they don’t even like or trust each other. Adding to this, many IT organizations don’t like or trust engineering, and the feelings are mutual. And nobody seems to get along well with accounting. In many cases, the performance measures used to evaluate the performance of one group are in direct conflict with those of a second group. For example, maintenance teams are often measured on the availability of critical equipment assets while operators are measured on the utilization of the assets. Asset availability and asset utilization are inverse functions. That is, to increase utilization often requires the sacrifice of some availability and vice versa. Under this scenario, it is no wonder operations and maintenance teams seldom get along well. As industry has invested huge amounts of capital into efficiency-increasing automation and information technologies, organizational silos have worked to destroy any potential value that may have been created by the technology. I was recently attending an industrial conference in which an engineer estimated that over 80% of all advanced control that has been implemented in industrial plants has been turned off by the process operators because the operators don’t trust it. If engineering and operations had a better working relationship, based on common goals and objectives, this might not be the case. Organizational silos have tended to sub-optimize plant performance by sub-optimizing the human performance within the plants. Perhaps it is time for industry to start moving away from long over-worn prejudices and consider using the valuable human resources more effectively to drive better plant performance. Measuring Performance You are probably familiar with the common adage is: “people perform to their measures.” I believe that this is very true. Most people want to be evaluated positively, and if they know that measures of performance exist for which they will be held accountable, they will strive to make those measures move in the correct direction. This is true whether the measures are driving desired behaviors or not. For example, measuring maintenance on asset availability and operations on asset utilization does not encourage the cooperative behaviors most industrial leaders would like to see. In the early periods of industrialization, prior to the many inventions that drove the industrial revolution, most shops measured performance as each product was produced. Production was so slow that accounting for the business on the basis of piecemeal production was easily achieved. Management and operators of these firms knew exactly how they were performing compared to their plan at all times. But with the introduction of tools, such as the power loom in the textile industry, the pace of production increased to the point that piecemeal accounting was no longer feasible. The result was that industrial operations compromised and began measuring the business performance through monthly accounting methods. The primary output of these systems for measuring manufacturing performance was, and in most cases today still is, the variance report. Variance reports basically report the cost per unit product made for each product produced over the past month and displays this against a previously predicted expected value, referred to as the standard december/january 2009 10
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