Companies are adopting Lean manufacturing with increasing frequency. And that is a good thing. A Lean culture is people-friendly, not to mention profit friendly. And thus the story of a GE Brilliant Factory award winning plant.
GE has around 400 manufacturing locations. It has had a contest to find the “most brilliant of the Brilliant Factory” plants in its system. I had the opportunity to interview Rob McKeel, CEO of GE Automation & Controls, whose plant in Charlottesville, VA was one of the 17 chosen from 400+.
Manufacturing Day was last Friday, but we need to continue to promote the importance of manufacturing and production throughout the year so that we can attract our fair share of the best and brightest young people into our industry.
McKeel told me the theme is digitizing Lean manufacturing. The plants are using the advantages of GE’s tools. Different plants chose different problems to tackle. The A&C factory in Charlottesville, VA was chosen as one of the “Most Brilliant of the Brilliant Factories” by meeting its goal to reduce cycles—lean out inventory turns.
The biggest challenge was changing the culture to really become Lean. The worker at the line really owns the results in Lean. Everyone around them has the function of supporting the line worker. On Gemba walks, the line leader presents the situation for that line and then asks for help. Help is given immediately.
Here’s a video that GE created about its Brilliant Factory in Charlottesville.
The second thing is to apply technology. Some technologies used included robots, augmented reality, and visualization to provide data in real time.
“We have a very different plant from 25 years ago—mostly due to tapping the energy of the people,” stated McKeel.
I asked how they went about transforming culture. He told me that first the plant manager went to Toyota to study the Toyota Production System. He took the “big” course. But everyone needs to understand. So then he had some team members took Lean training at Toyota. Then, walking the talk, showing the changes they wanted to effect. The first teams learned to react to worker problems quickly. That action and trust led to other questions. Main value is that the worker comes first, management and other team members support the worker.
Sounds to me like they used a basic method of creating trust. Without trust, you’ll never have a successful Lean implementation.
McKeel said, “We don’t have a single unproductive moment for the worker.”
A&C was awarded the GE Brilliant Factory of the Year for its leadership, people and manufacturing excellence. While four inventory turns per year has long been standard in the industry, the Charlottesville BF is pacing for 50 inventory turns in 2017 on its model product line.
The era of improving plant performance and profitability through efficiency—that is by cutting costs—is over. So stated Emerson Automation Solutions executive president Mike Train while kicking off the 2017 edition of Emerson Global Users Exchange in Minneapolis.
“The past 30 years have brought us fantastic advances in the manufacturing sector, including greater operating efficiencies enabled by automation,” said Train. “But the incremental benefits gained are diminishing. The pressure is on industry leaders to take the next step to the game-changing performance made possible by digitally empowering the workforce.”
Emerson has researched industry performance and drew a profile of Top Quartile industry performers – those in the top 25 percent of performance among their peers – Emerson has identified five essential competencies as critical to realize the value of “digital transformation”:
• Automated Workflow: Eliminate repetitive tasks and streamline standard operations to focus personnel on exceptions and other opportunities that require human intervention
• Decision Support: Leverage analytics and embedded expertise to provide actionable insights that reduce complexity and enable higher quality, faster decision-making
• Workforce Upskilling: Identify approaches that empower workers to acquire knowledge or experience faster and more effectively, to support higher-level and collaborative decision-making
• Mobility: Provide secure, on-demand access to information and expertise regardless of location, enabling collaborative workflows
• Change Management: Combine strategies, processes, tools and expertise that, in the right combination, simplify and accelerate the institutionalization of operational best practices
As always, this is a huge customer conference. There is abundant energy. Informal networking occurred all over the place. At this time, Emerson is the most vibrant of the companies in this area. It’ll be interesting to watch how, or if, business continues to grow from the company’s continued vision of industry.
More coming. Gotta listen to the next speaker.
A little consolidation in the industrial software space. Remember when Schneider Electric was shopping its software division a couple of years ago and came up with a reverse acquisition with AVEVA? And the deal fell apart almost a year ago?
Well, it seems that Schneider spent the year internally restructuring such that it could pull off this weird financial transaction. Announced Monday evening, the two companies have reached an agreement to ship SE software to AVEVA forming a new company with SE as a 60% owner and AVEVA holds the other 40%. Plus AVEVA shareholders get some cash in the deal.
Management touts the transaction as having a clear and compelling business logic. Reasons include building a “global leader in engineering and industrial software”, covering entire asset lifecycle management, and positioned for further acquisitions.
I’ve believed that Schneider would sell off its software businesses ever since the deal for Invensys was announced. Some venture capitalists have talked with me about potential acquisitions. Evidently no one wanted to buy it. I thought maybe Wonderware could make it on its own as a spinoff, but there probably wasn’t enough financial payoff for Schneider with that sort of deal.
However, this also isn’t a clear divestiture. One is left wondering what the future will bring in a couple of years when this transaction matures.
The Management of the Enlarged AVEVA Group will be comprised of:
- Key members of the existing executive management team of AVEVA, namely Dave Wheeldon (Chief Technology Officer and currently also Deputy Chief Executive Officer) and Steen Lomholt-Thomsen (Chief Revenue Officer) are expected to remain in place following completion;
- Ravi Gopinath, currently Executive Vice President of the Schneider Electric Software Business, will be appointed as Chief Operating Officer of the Enlarged AVEVA Group. He will report to the Chief Executive Officer of the Enlarged AVEVA Group; and
- David Ward will continue in his current role as Chief Financial Officer of AVEVA, until a new Chief Executive Officer is appointed. Following such appointment it is intended that David Ward will be appointed to the role of Company Secretary of the Enlarged AVEVA Group.
I received this from Vertical Research Partners analyst Jeff Sprague:
- Deal Structure Overview – Schneider Electric announced today the combination of its industrial software business and AVEVA to create a global leader in engineering and industrial software. On completion, Schneider will own 60% of the combined new AVEVA group while existing AVEVA shareholders will have 40% equity ownership. However, SU is contributing a little over 60% of the proforma EBITA in addition to a £550MM payment, and allowing AVEVA to distribute a £100mm dividend to AVEVA shareholders at or around completion. Schneider will benefit from unlocking the higher trading multiple of its Software business outside of the Group structure, in addition to future synergies (unquantified). We estimate the transaction creates 42 euro cents of value to SU’s stock price. Closing is expected to be at or around end of 2017.
- Strategic Rationale – The combined company will provide engineering services and industrial software, with combined revenues of £657.5mm and adjusted EBITA of £145.8mm for the financial year ended March 2017. The combined portfolio will cover process simulation to design and construction to manufacturing operations/ optimization. As shown below, AVEVA is very strong in the front end design and engineering work while SU is strong in O&M and asset optimization. The company noted an ability to create a more streamlined solution as it will control both ends of the spectrum. Management also indicated plans to scale up with future M&A. AVEVA will also enhance the value proposition of Schneider’s existing IOT platform (ExoStructure).
The only interest I’ve seen with total asset lifecycle management is with the OIIE platform from MIMOSA (download whitepaper from my site). A few end-user companies have shown interest in that, but I don’t know that the combined companies will offer much of a competitive advantage in that regard. That would require strong management bringing the disparate parts together into a whole.
For example, I only point to GE Digital whose recent public woes with the Predix system point to the difficulties of software integration.
I returned from Hannover with a notebook filled with Internet of Things platform notes. Then I attend a teleconference press conference last week—and here is Internet of Things meets Maintenance Management. (OK, sounds like a B movie title, but it’s actually cool.)
Fluke acquired eMaint late last year and last week unveiled the fruit of that union. Fluke has been diligently working to connect its wide product line to the Internet (see this video podcast, for example). This announcement takes connection to the cloud.
Fluke Accelix (Accelix) is an open, cloud platform that connects maintenance software, equipment, and critical plant systems. Accelix integrates Fluke’s portfolio of wireless tools and condition monitoring sensors to eMaint, Fluke’s leading SaaS CMMS (Computerized Maintenance Management System), and shares information with enterprise solutions of choice.
Accelix will help maintenance teams access the benefit of connected equipment, tools, measurement data and software systems by eliminating common barriers many customers face to implementing a comprehensive, affordable reliability program.
“The latest trends in maintenance solutions make great promises, yet are often too expensive and time-consuming for most organizations to implement, especially on second- and third-tier equipment,” said Brian Samelson, Fluke’s President of Digital Systems. Mr. Samelson continues, “This means that an overwhelming amount of maintenance activity happens in a black hole. Accelix solves this prevalent problem with a combination of familiar and trusted tools that connect seamlessly and are cost-effective to implement. We have removed the barriers that often separate the promise of advanced technologies from the reality of most maintenance and reliability professionals, for virtually any size operation.”
“Maintenance managers are constantly looking for opportunities to improve productivity, lower costs, and save time. This is increasingly important as teams have fewer resources to do the same job, and they need better insights into resource allocation and asset health,” said Paul de la Port, President of the Industrial Group at Fluke. “Industry data proves when managers can monitor machine health they allocate their teams more effectively and prevent serious problems from happening – all while improving safety, productivity, and uptime. In the end, equipment life is extended and savings are quantified; we believe this value proposition is sought by maintenance professionals everywhere.”
One of my customers back in the 90s established an OEE office and placed an OEE engineer in each plant. OEE, of course is the popular abbreviation for Overall Equipment Effectiveness—a sum of ratios that places a numerical value on “true” productivity. I’ve always harbored some reservations about OEE, especially as a comparative metric, because of the inherent variability of inputs. Automated data collection and modern data base analytics are a solution.
A press release and email conversation with Parsec came my way this week. It sets the stage by pointing to the pressure to increase quality and quantity, while reducing costs, leading manufacturers to seek a deeper understanding of trends and patterns and new ways to drive efficiency. The very nature of OEE is to identify the percentage of manufacturing time that is truly productive. It is the key metric for measuring the performance of an operation, but many companies measure it incorrectly, or don’t measure it at all.
In the latest example of its efforts to help manufacturers maximize performance while reducing costs and complexity, Parsec launched its real-time Overall Equipment Effectiveness (OEE) Performance Management solution.
Most OEE measurement systems capture data from a single source and offer reports that may be visually appealing but actually contain very little substance. Other OEE systems capture lots of data but fail to give operators the necessary tools to act on that data. The TrakSYS OEE Performance Management solution collects and aggregates data from multiple sources, leveraging existing assets, resources and infrastructure, and provides insight into areas of the operation that need improvement with the tools to take action.
“We are challenging manufacturers to go beyond OEE measurement and to begin thinking about performance management,” said Gregory Newman, Parsec vice president of marketing. “Our TrakSYS OEE Performance Management solution pinpoints the root causes of poor performance and closes the loop by providing actionable intelligence and the tools necessary to fix the bottlenecks and improve productivity.”
The Power to Perform
When designing the TrakSYS OEE Performance Management solution, Parsec took into account three key criteria for measuring OEE: Availability, Performance and Quality. Availability, or downtime loss, encompasses changeovers, sanitation/cleaning, breakdowns, startup/shutdown, facility problems, etc. Performance, or speed loss, includes running a production system at a speed lower than the theoretical run rate, and short stop failures such as jams and overloads. Quality, or defect loss, is defined as production and startup rejects, process defects, reduction in yield, and products that need to be reworked to conform to quality standards. As part of the solution, Parsec created a variety of standard dashboards and reports as well as the ability to customize reports through powerful web-based configuration tools.
“Our goal is to empower manufacturers to unlock unseen potential with their existing infrastructure,” added Newman. “Even small tweaks can save a plant millions of dollars each year.”
TrakSYS is an integrated platform that contains all of the functionality of a full manufacturing execution system (MES) in one package. The modular nature of TrakSYS brings flexibility to deploy only the functions that are required, without a major software upgrade. TrakSYS business solutions include OEE, SPC, e-records, maintenance, traceability, workflow, batch processing, sustainability, labor, and more.