Become a smart factory with ERP

By Uwe Kueppers, Manager Consulting Service, EMEA of Kalypso, a Rockwell Automation company.

Traditionally, businesses would make do with manual processes such as spreadsheets for keeping a record of the company’s financials, supply chain, operations, and human resource activities.

As a company’s needs change and grow, it makes it inevitably more challenging to keep up with customer demands and track progress. Investing in enterprise resource planning (ERP), Product lifecycle Management (PLM) and Manufacturing Operation Management (MOM) software enables companies to integrate these different processes into one fluid architecture to help streamline planning, control, and execution of all business processes. 

The manufacturing sector has been moving towards the smart factory of the future for some years now and recent advances in communications, IoT and data analytics have brought that aspiration much closer. The smart factory is a concept for expressing the end goal of digitisation in manufacturing. At its best it can deliver shorter product runs, manufacture more complex products while handling low production runs and more frequent material changes. For the manufacturers, the benefits are well understood, effective delivery schedules, wider product mix, improved forecasting, optimisation of production, enhanced supply chain management and product traceability.

But to make it work as one seamless enterprise the smart, or connected factory needs something to glue it all together, to ensure that each facet of the operation can communicate. The enterprise resource planning (ERP) has been integrated with factory automation and manufacturing operation management systems (MOM); helping businesses achieve all of this in conjunction with product lifecycle management (PLM) for many years. It can unify multiple business processes and disparate systems to better connect all aspects of the supply chain.

At Kalypso, a Rockwell Automation company, we focus on the digital transformation of the value chain, from the product to the plant and end user. Rockwell Automation is not only one of the largest companies dedicated to industrial automation and information solutions, but also a manufacturer. 

Rockwell Automation is no different to other large manufacturers in that we have a large product portfolio, plant spread around the globe and traditionally deployed a wide range of manufacturing. Each of these global plants were running its own ERP with no connection between them. In addition to this, each plant would have custom applications that monitored and analysed machine data in different ways.

This lack of visibility made it difficult to respond to any supply chain or production challenges by balancing production across the enterprise to meet any fluctuation in demand. We knew that an enterprise wide strategy connecting our plants would give us better visibility into our operations, improve performance measuring and comparisons among plants, and support better decision making using good, indisputable data.

The solution was to become a Connected Enterprise that unifies IT and OT systems, providing new opportunities to access, monitor and capitalise on operational, business, and transactional data across a manufacturer’s enterprise. To facilitate this vision, we developed a mutually agreed upon playbook from which the plan would be executed, and we put goals in place to ensure we either maintained or improved the quality levels that our customers expected.

One of the first steps was creating a single connected system across all our facilities based on EtherNet/IP, a standard and open network infrastructure that enabled secure interoperability between corporate IT networks and industrial applications. Next up was to implement a single, common ERP and MOM system to replace the numerous regional variations. With this in place we were able to manage our multiple systems around the world.  The new harmonised system delivers processes and points of reference for consistently measuring performance across all facilities.

While we are still on this transformational journey we have already benefitted from the improved visibility and control.  We have reduced total cost of ownership and lowered inventory days from 120 to 82. It has also accelerated its time to market, with supply chain deliveries now up to 96 per cent and lead times cut in half. Additionally, the company estimates it has experienced a four to five per cent annual improvement in productivity.

The Connected Enterprise is the industrial revolution of the 21st century. It offers numerous competitive advantages that will be imperative to manufacturers in the coming years, including uncovering new opportunities for improving global production, supporting sustainability efforts and increasing agility.