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DIGITALISATION Determining automation value: The Why, When and How

May 9, 2019

Most automated machinery and tools can function at the best level and also make working conditions better. Nevertheless, if not applied properly, automation can lead nowhere. The article discusses how to apply automation sustainably and make the most of it. - Milind Kulkarni, Head of Business Development, at Industrial Automation, Siemens

Revamping your plants or processes with automation is a reliable way to maximise the profits on your investment. However, automation, if not implemented sustainably, leads to a negligible increase in your profit. Sometimes, it may even result in a net loss after considering the huge investment.

The Why

Automation through digitisation has influenced changes in all the sectors of the industry – design, production and sales. This change has been readily accepted not only because it is trendy, but also because of its numerous advantages. Uniform outputs, improved efficiency and reduction of production time are some of the after-effects of automation.

Automation maximises the performance of the process by eliminating production risks. The various production risks which industries face are:

  • Operational: These risks interrupt the production cycle. For example, mechanical failure, delay in supply of goods and services, power cuts, labour shortage, etc.

  • Technological: These risks involve the lack/malfunctioning of technical equipment

  • Financial: These risks depend on the changes in the financial policies of the government

With automation, many unforeseen situations can be avoided and efficiency can be maximised. The reduced risks in the process improve the performance of the people along with the project. Automation is inevitable, although, only sustainable automation can lead to an increase in profits. These basic questions can help one decide the degree of automation and the methodology to implement the same, best suited for one’s modernisation project.

The When

The best person to answer this question is the process manager. The answer to this question can be obtained after the analysis of various collected data and the variances of the processes. The careful evaluation of the existing process and the financial capability can help one design the automation process.

When to migrate and when to modernise

Migration refers to replacing an existing legacy technology with a modern version that fulfills similar requirements and has the ability to perform similar functions like that of an existing one. Modernisation refers to planning and implementing new, upgraded technology across departments in order to create a single platform for improved communication, better collaboration, timely production schedules and thereby, creating efficiencies in an automated environment.

Deciding when to migrate and when to modernise depends on the availability of resources, both technical and financial. The process manager needs to carefully evaluate the outcome of both the options by keeping in mind the ROI and the goal of the process.

  • While deciding between migration or modernisation, one should consider a three to five-year investment-planning horizon when analysing one’s existing infrastructure

  • If one’s existing system faces issues like, intractability, reduced productivity, increase in downtime, a prolonged duration for changeovers, increase in energy consumption, issues with component availability and grey market channels being used for procurement, adequate investments need to be made to overcome these problems

  • After finding the root cause of these problems, one can decide between migration and modernisation

  • Opting for migration to reduce expenses, however, can be costly in the long run, when the entire system fails to deliver what it is aimed for. Spending on replacing an old component with the same new component might not reflect an improvement in the process if the root cause of the problem was not the component. If improved modernised components, which are compatible with your existing process, are used, they will result in the solution of the problem along with added benefits.

  • When one migrate to a new component, they don’t achieve any improvement in production. Modernising, on the other hand, can help one increase data collection and achieve greater productivity. Replacing parts every time might result in an emergency shutdown. Migration is useful in improving efficiencies for particular equipment or a department.

  • Depending on the ROI, modernisation can be embraced. However, if modernisation of equipment is not compatible with your existing systems, investing for features which one will not be using is unnecessary.

  • Modernisation, if implemented in planned phases, improves the ROI and makes the plant sustainable

Attempting to obtain complete automation in a single shot is indeed a long shot. Instead, one should try to automatise individual processes based on priorities. This will help in managing the finances along with the productivity of the plant.

The How

The humongous task of automation can be easily achieved with these steps:

  • Understand the process of the project on harness for migration/modernisation

  • Diagnose the optimisable avenues

  • Prioritise the automation of different systems based on their effect on overall production

  • Define the project scope after analysing the previously collected data and estimating the required output by predicting the changes and its effect on the process after automation

  • Allocate and invest money and time for each phase of implementation. Each phase is equally important. Do not compromise on important phases like, software update, because of exceeding expenses. New hardware might be useless without a proper control system.

  • Efficient monitoring of variances in the project will result in the best outcome — networking, wireless technology and cyber security and connecting devices to the Internet of Things can aid in effective monitoring

A process can only be controlled as finely as it is measured. To optimise a process, the infrastructure needs three layers — control, visualisation, and business and engineering intelligence.

Getting stakeholder buy-in for automation projects

Automation, if not planned properly, acts like a black hole, which requires investment but does not have any substantial outcome. Unless the returns on the automation investment are understood, executives will not be able to justify the investment required. One needs to understand both the physical laws governing engineering and human rules of accounting.

The following steps can be followed to encourage stakeholders to invest in automation projects:

  • Evaluate the cost of an automation investment based on its economic value to the business

  • Execute real-time accounting at the work-cell level, which lets you measure operator activity. Model accounting in the control system using the generally accepted accounting principles.

  • Establish a baseline and store the data. This will allow you to watch performance before and after each investment.

  • Dashboards relating to production data and financial data are powerful tools for both, operators and managers

  • Present your case in the language of business. Focus on productivity improvement, higher revenues, lower cost structures, risk avoidance and opportunities for growth.

  • Take advantage of virtualisation tools to pretest and demonstrate the functional effectiveness of new system designs. Computer simulations can be used to demonstrate the effect of automation.

  • Phase the automation upgrades over multiyear projects, as it will be both easier on the budget and less risky if there are transition problems

Automation is not an overnight process. One should look at the bigger picture and re-envision the process. This will help in creating a sustainable automation transformation. Modernisation is leading to transformation.

Courtesy: Siemens

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  • If modernisation of equipment is not compatible with your existing systems, investing for features which one will not be using is unnecessary

  • Take advantage of virtualisation tools to pretest and demonstrate the functional effectiveness of new system designs

  • Milind Kulkarni

    Head of Business Development at Industrial Automation


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