Benchmarking by Solomon Associates

Solomon Associates created a methodology to measure the performance of the oil companies: Comparative Performance Analysis (CPA), started in 1980. Their registered motto is: measure, manage, maximize.

One of the essential concepts is that only through this comparison process you can truly identify the areas where your facilities could improve.

The main oil companies of the world require their services to understand how competitive they are.

There are different indexes under this methodology:

  • “Reliability and Maintenance Effectiveness Index” (RAM EI): Lost margin (due to RAM causes) and maintenance cost.
  • “Maintenance Index” bench-marking services also examine petrochemical and refinery performance.
  • “Net Cash Margin Measurement, Management, and Maximization” (NCM³®) methodology: points to areas for improvement through an effective mix of no- or low-cost projects.
  • “Start Reliability” and “Lost Revenue” Opportunity services: use proprietary metrics to analyze the performance of power generation facilities.
  • Start “Equivalency Ratio” and Hour Equivalency Ratio™ services benchmark power production facilities using proprietary metrics.
  • “Equivalent Generation Complexity” (EGC) services: to help improve process performance by comparing it to Solomon’s database of industry leaders.

In terms of RAM EI, you are not a world-class performer if:

  • Maintenance costs are not below 1,4% of PRV (Plant Replacement Value).
  • Mechanical availability is not above 96,7%

10 Good Manufacturing Practice rules

Ten suitable GMP ‘rules’, to be used for staff training:Good-Manufacturing-Practice

  1. Confirm you are trained and have correct written instructions before starting any job.
  2. Follow instructions exactly.
  3. Report errors and bad practices immediately.
  4. Ensure you have the right materials before you start a job.
  5. Use the correct equipment for the job, confirm its status and cleanliness.
  6. Maintain good segregation. Protect against contamination.
  7. Work accurately, precisely and methodically.
  8. Maintain good standards of cleanliness and tidiness.
  9. Ensure changes are pre-approved (through the change control system).
  10. Do not make assumptions – check it out.

Windows patches

A customer called me today to discuss about software alternatives related to future microsoft-patch-dayenvironment for a shop floor solution they have. We reviewed the main requirements and during the conversation we talked about different major environments. Suddenly we did a stop on .NET, and this was what happened.

We are running a shop floor solution that is today is available 24×7, we do not stop. I cannot go to the business and say: we have a solution that is so “cool” but we will have outages. Our 25 years old solution has not outages, I cannot propose a new solution with this basic hurdle.

Windows patches are a stopper when deciding on the use of .NET framework. You have to stop the machine and apply security patch or an upgrade or whatever.

  • Why don’t use a cluster? it’s too expensive.
  • Why don’t implement the solution on the cloud? they cannot rely on network, it’s more investment to ensure availability.

After that, we continued talking about Open Source solutions.

 

The Goal

I just finished to read this novel written by Eliyahu Goldratt and Jeff Cox.the-goal

Independently if you work on Manufacturing industry or not, this book reviews fundamental basis related to theory of constraints, methods to manage a supply chain.

I specially like the way the team started to think about the process of making themselves questions to look for different perspectives and find solutions to do not fall in the “common practice”.

The first question that came to my mind at the end of the book was:

how is it possible that I was not aware about the existence of this book before?

 I need to change the way I find books and explore other sources.

Theory-of-constraints-5-phasesAbility of a director:
  • What do we have to change?
  • To which direction do we have to change?
  • How?

OpenSource Vs ISO

During the last 10 years the software companies have jumped to the industrialization thanks to some elements that made that possible. One of them is Open Source.

Manufacturing companies developed control organisms for the development of methodologies and standards with different goals: reduce costs, have a common language within the industry, and be compliance with very strict regulations (depending on the sector).

During last years, a new organization was created: AUTOSAR (AUTomotive Open System ARchitecture), which tries to standarize and industrialize the software oriented to the automobile. Brands like: PSA Peugeot Citroën, Toyota, Volkswagen, BMW, Daimler AG, Ford, General Motors, Bosch and Continental are present here, and they know this is important as software companies as Google are evolving on their own solutions. This type of things are not new for these manufacturers.

The Open Source organizations were created with the same vision than ISO: industrialize, look at the benefits of ISO.

Open Source is a massive destruction weapon for software companies, and it’s ability to build platforms and standardize processes and tools is a key reason for the transformation of the software industry. I remember the big changes on this area between 2000 and 2005: Facebook/hadoop, AWS, and SalesForce…. as examples of ability to industrialize.

Who pays to the Open Source institutions? the big software companies: Google, Amazon, Facebook….. they all know about the importance of the industrialization. In the same way than ISO.

ISO does not only provides guidance, it also certificate organizations in the different industries and standards. To me this is something that should happen in the software industry in the future.

Getting Manufacturing Metrics Right

I assisted to this Webinar presented by Gartner, and the more interesting part of the conversation was when the discussion was on this table:

Align Analytics And Metrics UsageOne of the figures commented during the event was that 70% of the data the manufacturing companies have is not used. There is still so much progress in terms of metrics that can be done.

For descriptive, diagnostic and prescriptive metrics the companies have so much in place and the maturity is good. But in terms of predictive metrics, here in the same way that retail companies are already analyzing the behavior of the consumers, the manufacturing companies can still open the use of prediction to look for benefits in terms of quality, time response and quality.

On the survey done to 83 people from the sector, there was a question:

In which areas is your organization planning to drive business value from the use of manufacturing metrics currently and over the next two years?

The answer was:

Future-Metrics-ManufacturingThe 4 areas that are in the minds of more people are:

  • Capacity utilization.
  • Understanding of true manufacturing costs.
  • Faster and better decision making.
  • Demand forecast accuracy.

The question that came to my mind was:

how can predictive metrics help to the business to improve these four areas?

My thoughts:

  • Capacity utilization: here predictive metrics can have an important impact.
  • Understanding of true manufacturing costs: here what we have to analyze is the past, not the future. Diagnostic metrics are more useful.
  • Faster and better decision making: here predictive metrics can have an important impact.
  • Demand forecast accuracy: here again diagnostic metrics are more useful.

Automotive industry trends

Automotive Industry is suffering changes, as other industries:

  • Speed of online purchases from other sectors (electronics, trips, retail, food…) is carrying over to car purchases. It’s very difficult to sell cars on-line and this requires to have car dealers around the geography.
  • More and more people research cars on-line as first step for buying, then they go to the store. This hybrid model is not enough to reduce costs.
  • The ‘Sharing economy’ is coming to the automobile sector in to main ways: car sharing and ride sharing.

There are so much reasons for the changes happening, being the main factors contributing to the reduction of car ownership these ones:

  • To own a car is expensive, so much expensive, specially in big cities.
  • Better public transport has improved a lot in the metropolis and less connections by car are required. You can use public transport plus ride/car sharing, so you satisfy all your needs without owning a car.
  • Socially, specially for young people, cars are less important than computers or mobiles.

So, a business model based on car sales growth is not possible anymore.

The solution? Diversify, how? I really don’t know, sorry I have not a crystal ball. What is clear is that:

  • The reduction of the automotive industry will continue,
  • The competition will be tougher and aspects as security, automation will be clear to enable the companies to compete.
  • Software companies will play an important role in the industry, partnerships on this area will be key to see how the competition evolves.

QMS software

The project to complete my Bachelor Sciences Degree I was a QMS software, build in Lotus Notes, with reporting done using XML, and on LN5. In 2001 was a good project for my university. I built my modules based on total quality management principles that during the last 13 years have not changed so much.

This is the reason I was smiling when I found that Quality Collaboration By Design has similar modules that my project. I find the software interesting in terms of content, but they should move the solution to the cloud.

The only solution as a service I found it was ZenDoc. The major companies works on QMS implementing their own solutions based on the collaboration platform they have in the company. At the end of the day, every Quality Department has their own templates and their own processes based on the standards, to implement it on JIRA, SharePoint, Lotus Notes, .NET, or even Force.com it’s not relevant at all.

AUTOSAR

The evolution of the automotive industry in the software world provoked the industrialization of the software principles; as result we have Autosar.

AUTOSAR (AUTomotive Open System ARchitecture) is a worldwide development partnership of vehicle manufacturers, suppliers and other companies from the electronics, semiconductor and software industry.

The AUTOSAR standard will serve as a platform upon which future vehicle applications will be implemented and will also serve to minimize the current barriers between functional domains. It will, therefore, be possible to map functions and functional networks to different control nodes in the system, almost independently from the associated hardware.

Some of the members of Autosar are: PSA Peugeot Citroën, Toyota, Volkswagen, BMW, Daimler AG, Ford, General Motors, Bosch and Continental.

Autosar focuses on the software architecture for electronic control units (ECU) in road vehicles, their deployment to networked ECU systems in vehicles, and the configuration of the basic software in such ECUs.

EATOP is an Eclipse-based implementation of the EAST-ADL standard, which has a relationship with Autosar through Artop.

The AUTOSAR Tool Platform User Group (Artop) develops and maintains a platform with common base functionality for creating modeling tools supporting the AUTOSAR standard. Artop essentially encompasses implementations of the different releases of the AUTOSAR meta-model plus a rich set of services and components for managing and processing AUTOSAR models.

AUTOSAR-components-and-inte(Autosar components and integration)