Check Jon's latest diginomica blog!

Here's Jon's diginomica blog updates
Read Ultimate SAP User Guide kindle reviews  

JonERP.com Podcast Feedback

"I listen to all your SAP podcasts in my car, until my kids get mad at me and make me put on music for them instead. Keep up the good work!"

- Robert Max, 2007 Solution Manager Community of Interest, and Systems Management Special Interest Group Chair for the Americas' SAP Users Group -

JonERP.com Visitor Feedback

"Jon, let me congratulate you on building a site which exclusively caters to SAP skills and careers and answers a lot of doubts young and senior SAP consultants have about what skills to have and get trained on."

More JonERP.com Site Feedback

"I have been reading your SAP newsletters for over a decade now... It's remarkable that you have now embraced the Web 2.0 delivery methods - Podcasts, Twitter etc - without sacrificing the in-depth nature of your analyses!" - Dave Sen, SAP Enterprise Architect -

JonERP.com Reader Feedback

"I visit JonERP.com almost everyday to check out whether there is something new and what the future trends hold for SAP skills and careers."

More JonERP.com Site Feedback

"I was struggling with career direction a few years ago and you provided me with some extremely valuable advise. I've been very satisfied with my career direction which was influenced in large part by your coaching. Thanks again!" - Keith

New JonERP Feedback

"You have always been there with a prompt reply when it matters the most. You have really been a mentor in true sense."

- Hussain Sehorewala -


Making the SAP Plant Visible Print E-mail
Article Index
Page 1
Page 2
jonerp_full_logo.PNGMaking the Plant Visible:
Lessons from the New Book "In Pursuit of the Perfect Plant"
by Jon Reed
Unabridged Edition, Never Before Released 

Introduction: Why Does Plant Management Matter?

Manufacturing plants have been around for much longer than ERP systems. But the gulf between ERP and plant management has always been vast. Even in the latest ERP software, you can't always drill into the systems than run individual plant operations. In today's economy, there is a new urgency to optimizing plants and making plants "visible" to ERP users. The reverse is also true: today's plants want a better view into the ERP system that was not historically extended to plant operations.

perfect_plant.jpgThere are many reasons for the urgency around plant efficiency, but one we can all relate to is the spiraling cost of energy. If it hurts our pocketbooks every time we fuel cars at the pump, you can only imagine the stress of the plant manager who has to report increased expenses to his/her superior based on skyrocketing energy consumption.

Just like plants are too often managed in isolation, the factors that impact plant management are usually addressed in a singular fashion - for example, a focus on lean manufacturing. But lean manufacturing is just one aspect of plant management. The new book "In Pursuit of the Perfect Plant: A Business and Technical Guide," offers a more holistic view. Authored by Pat Kennedy of OSIsoft, Vivek Bapat of SAP, and Paul Kurchina of KurMeta, "In Pursuit of a Perfect Plant" takes on the ambitious task of assessing the overall challenges of today's plant operations. Once the anatomy of the problems is laid out, the authors take us through the different aspects of how to optimize plant operations in accordance with the latest technologies and management practices.

In this article, I'm going to start by describing the overall scope of the book. Then I'll go through the operational pressures that today's plants face. In the final two sections of the article, I will share some key lessons from "In Pursuit of the Perfect Plant" pertaining to asset and energy management. In addition to assessing the book, I will also draw on information from webcasts made by the authors or their colleagues at Sapphire 2008.


1. The Scope of the Book

A 400 page, large size paperback, "In Pursuit of the Perfect Plant" has a workbook-like feel. Although there aren't any specific exercises in each chapter, there are recommendations for follow-up, and in my opinion, the book is best approached as a diagnostic. It's pretty dense to read from cover to cover, but it's well-organized for readers who want to focus on sections of interest. To give the book a lighter feel, the book uses a conversational structure based on a hypothetical company, "Wolverine," and its management team, including Executive VP of Manufacturing Operations John Mulcahy and a cast of characters that take turn making interactive presentations and posing questions. The book is designed to benefit a range of readers, from executives to plant managers to technologists. But it's also geared towards plant-based employees, as well as any readers who want to get a better handle on the impact of plant operations.

So how do we define the scope of what a plant has to address for operational excellence? On page 19, this book defines the plant's key areas as: strategy and coordination, planning, execution, asset management, energy management, quality management, visibility/compliance/risk/opportunity, architecture/standards/interoperability, and change management. After some introductory sections describing the pressures on today's plant, the book flows through all of the areas listed above in the order listed.


2. The Pressures on Today's Plant

As "In Pursuit of the Perfect Plant" illustrates, the pressures on today's plant are many. I noted a few that are especially compelling:

▪ Due to the intensity of global competition, plants must now be assessed as individual profit and loss centers. Wasteful energy consumption in one plant cannot be "hidden" in the overall accounting.

▪ Communities across the world are expecting more "good neighbor accountability" from nearby plants. This puts mounting external pressure on plants to leave "small footprints" when it comes to environmental standards, waste disposal, and cleaner energy usage.

▪ Plants often run on their own maintenance systems and use offline reporting, such as Excel spreadsheets, that are not easily integrated with ERP software. This prevents plant visibility and creates difficulties analyzing real time data in order to identify inefficiencies.

In addition to citing these pressures, the book does an honest job of recognizing the cultural and management challenges that plants must overcome. It's not as simple as implementing a fancy new control system, and even if it was, companies have lost their appetite for "big bang" implementations.

"In Pursuit of the Perfect Plant" provides some vivid examples of the cultural issues companies must grapple with. On pages 100 and 101, there is a stark contrast between two graphics, one illustrating the plant priorities of corporate executives (maximize "uptime") and one listing the top concerns of plant workers, such as "Key Performance Indicators (KPIs) - who cares?" and "compliance = paperwork."  To put it simply, plant workers don't naturally care about KPIs and compliance, especially when it looks more like a paperwork burden than a benefit to the team.

The executive might love the end result of regulatory compliance, but the plant workers who have been burdened with that compliance are viewing the burden of paperwork from a very different angle. We can take it further: when companies look at extending ERP into plants, they often think of it in terms of data input requirements. This creates resistance at the plant level, where the priority is less about helping corporate out and more about making the plant run better, and the prospect of taking time away from mission critical operations to input data can be perceived with resistance. With skill, these priorities can be aligned, but ERP does not necessarily align them "out of the box."

"KPIs" provide a good example of how this difference in priorities plays out. During a narrative presentation in the book from our fictional executive John Mulcahy, he says, "When we talked about corporate values, we mentioned KPIs. Plant-level workers don't see a lot of value from the installation of corporate systems that provide a lot of nice numbers for corporate, especially when 10% of their day turns into entering numbers manually into those systems."

To contrast the corporate-level KPI focus, Mulcahy then cites the work of J.E. Rijnsdorp, a professor at Delft University in the Netherlands: "He describes the life of the (plant) operator as one of ‘99% boredom and 1% terror' where somebody is sitting there, doing routine tasks, waiting for a failure and hoping they can cope with it... They're not going to look at a display that shows a bunch of KPIs. They absolutely will monitor the systems that control the biggest and most troublesome equipment - primarily the materials levels, such as mass balance and pressure, which is part of the energy balance. These guys are principally concerned with smooth operations and leaving the plant with all the body parts they came in with - ‘striving for perfection' could sound pretty nebulous and canned to them."

Those are pretty daunting challenges. It's clear that new plant management solution must have a clear vision of the integration of technology, operational strategy, and change management that is geared towards those who are working at the plant level.

There is some good news, however. Part of the impetus behind this book is that we are seeing a convergence of technology and methodology that should allow for the kinds of changes in plants that will allow for an unprecedented level of visibility and worker-level buy-in. The better news? This is not just theory - SAP customers are reporting successes in these areas - successes with significant bottom line benefits. Some of them are cited in this book, and others, like Amgen, are sharing their case studies at SAP trade shows. With the potential for operational success in mind, let's take a closer look at a couple areas that are addressed in detail in the book. 


 

What is Jon Up to Now?

Track Jon in real-time on Twitter
See his latest diginomica blogs

Get Jon's SAP Blog + Videocast Feed (or Email Notifications)

Jon's "Get All My SAP Content" RSS Feed

or Subscribe to the Feed by Email

The Latest JonERP Feedback

"I have referenced your articles on JonERP.com for my internal Fujitsu colleagues on how the functional skill set is changing. It's not just theory, but real life change and the need for new SAP skills."

- Ranjan Baghel, Associate Director, Fujitsu America -

JonERP.com Site Feedback

"I can't imagine any SAP professional who is serious about their career not utilizing the JonERP.com website. I know I used it frequently when I did SAP consulting. I use it even more now and I know my colleagues go there quite frequently to increase their knowledge of the SAP market, it is a source of great information."

- David Dawson, SAP Direct Hire Consultant, Acsys -

More JonERP.com Site Feedback

"Jon, you are definitely spot on with your analysis of the SAP market. I've been using your websites for over five years now. Instead of buying all the SAP books, I use your stuff to catch up with what's new in the ever-increasing SAP market." - Mark

JonERP.com Reader Feedback

"I've kept up with your JonERP.com site for a long time and your articles via SearchSAP.com and elsewhere. I just realized a few months ago that you were also the author of the first SAP Consulting book that I read when I decided to take the leap from working at a Utility company to becoming an SAP Consultant. The SAP Consultant Handbook is a staple for any SAP consultant, new or experienced. I just wanted to thank you for the quality work."

- J. Michael Peace, Independent SAP Consultant -