Managing Automation - April 2008 - (Page 38)

[ INDUSTRIES ] Transformation Integration TechWatch Industries MARKET WATCH: Metal Mania In recent years, the average price of most metals has been on a steady incline. Metal Copper *($/Metric ton) 2005 3,676 1,901 7,385 14,778 1,381 974 2006 6,731 2,573 8,755 24,126 3,266 1,288 2007 7,132 2,640 14,495 37,136 3,250 2,579 Aluminum Tin Nickel Zinc Lead *Average of daily quotations Source: International Monetary Fund. Actual Market Prices for Non-Fuel and Fuel Commodities, 2005-2008 pulling quality work out of often-antiquated equipment that generates isolated information and operates with disconnected processes. Pouring money into replacing this expensive equipment is not always an option. Instead, many metals companies are finding new ways to optimize their existing assets. Specifically, they are turning to manufacturing intelligence (MI) software from vendors such as Activplant, Incuity Software Inc., and Informance International, to help drive quality up and costs down, and to improve the efficiency of activities such as plant changeovers. Metal materials are the foundation for almost everything in manufacturing. These materials and parts are critical to just about every industry, from construction to automobile production. It has been this way for a very long time. To put things into perspective, consider that Ford Motor Co.’s Dearborn Stamping Plant — which turns 700,000 pounds of steel per day into doors for the Ford F-150 — has been around since 1939. Companies such as Ford have sunk a substantial amount of money into expensive machinery that, in many cases, is not very flexible. “We found the performance of those assets is in the low-30% range,” says John Oskin, founder and executive vice president of Informance. “The reason is, in a lot of highly engineered industries, there are specialty machines that are designed to do a certain kind of cutting at certain tolerances. But a lot of times those machines sit idle.” Although the equipment and processes at the heart of metal fabrication haven’t changed much over the years, the competitive environment has shifted substantially. Today, metals manufacturers need to be nimble. “It used to be that a company would run a die set once a week, but now it may have to run every four hours,” says Dennis Cocco, founder and chief product strategist at Activplant. “This is driving significant change. What used to be allowable in slack and waste is no longer allowable.” As a result, metals manufacturing companies are beginning to emphasize their return on net assets (RONA) when assessing their efficiency. RONA measures the financial performance of fixed assets, such as manufacturing equipment, real estate, and working capital (assets minus liabilities). From the perspective of an accountant measuring a company’s financial performance, a RONA calculation can provide a view into asset performance. For a plant manager, it means making sure the equipment is running as efficiently as possible. To do that, plant managers need a way to measure how machines are running. “That’s where we fit in,” Informance’s Oskin says. “We tie RONA back into asset performance.” GAINING VISIBILITY A RONA analysis starts with visibility into things like machine capacity and standard part rates. For example, a company may believe that the standard time required to produce a part is two and a half hours, but the company may have no reliable information with which to gauge whether it really takes that long or whether it takes that long on a consistent basis. MI tools can help plant managers get a handle on this type of information. According to Oskin, the Informance MI enterprise suite offers the analytics required to measure the actual time it takes to make a part and the losses that occur along the way. That information allows a plant manager to determine what to change the next time the parts are run. The Informance solution also includes a product called the Manufacturing Strategist, which provides “what-if” MI tools offer the analytics required to measure the time it takes to make a part and the losses that occur along the way. — John Oskin, Informance modeling tools that tie business objectives back to asset utilization and visibility. “If the business objective is to improve RONA by three percentage points, the modeling tool allows you to tie that into plant performance metrics by asset, in terms of what needs to take place to drive RONA up by three percentage points,” Oskin says. At Arkansas Steel, which makes tie plates for ma April 38 2008 Photo courtesy: Informance

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Managing Automation - April 2008 Contents Take 1 Camstar to Introduce Software that Combines Quality, MES, and Intelligence SAP Revamps Maintenance, Raises Fees 29% New TAGSYS Chief Sees Opportunity in Broader Approach Siemens Turns to Security Weaver for Compliance Supply Chain Company Takes Next Step in U.S. Notes Cover Story: The Long Climb Special Report - Undertanding Enterprise Performance Management Caught Between Supply and Demand Taking Off the Blindfold No Room for Error Product Scan Advertiser Index Next

Managing Automation - April 2008

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