What is The Perfect Plant?

Part Two – People Power

By Sam Sliman
President, Optimal Solutions Integration, Inc.

In pursuit of top-and bottom-line improvements, manufacturing companies have invested heavily in technology solutions over the past decade. According to AMR Research's Manufacturing Operations Software Spending Report, 2007-2008, manufacturing companies will increase technology spending 10-15% in 2008 over the previous year.

In part one of this article, I explored the major technology components of SAP’s Perfect Plant program. Technology, however, constitutes only half of the Perfect Plant. The other half, equally vital, is people – CIOs, CFOs, plant engineers, plant managers, machinists, and IT staff – both internal resources and external consultants.

Top-floor-to-shop-floor communication

For manufacturers to succeed in today’s dynamic, hyper-competitive business environment, individual plants within a manufacturing enterprise cannot operate as siloed, independent entities. They must be active participants in broader corporate strategies and, beyond this, tightly synched players in globally disperse, demand-driven supply chain networks.

For this to happen, clear communication and meaningful dialogue must exist from the C-level to the plant-level, and all points in between. This is easier said than done. Many plants, particularly those over a decade old, began as quasi-independent entities. As these plants evolved, a culture of isolationism often took hold.

Inside manufacturing plants, engineering, operations and IT established fiefdoms. Over time, plant engineers, plant managers, process control operators and machinists learned to execute their respective functions while respecting each other’s turf. Overly intrusive corporate oversight was often kept at bay by hitting production numbers and keeping costs under control. Strategic thinking, limited in scope, was borne more of plant preservation than of a striving to achieve larger corporate goals. Day-to-day decisions were primarily reactive and tactical.

Today the situation is markedly different. Multiple plants working off of a single ERP system – along with a host of integrated enterprise and plant-level applications – have made the Perfect Plant promise readily attainable. The lifeblood of the Perfect Plant is a single source of accurate, real-time data accessible and actionable from the top floor to the shop floor. CEOs and CFOs now have the vital information and holistic view needed to formulate winning, competitive corporate strategies. CIOs of manufacturing enterprises, perhaps more than ever before, participate at the highest level in corporate strategic planning.

Aligning corporate strategy with business processes and plant-level execution requires a more open and collaborative relationship between the corporate office and individual plants. Inside the plant, engineers, managers and production workers must dismantle traditional, long-standing barriers. They must now work in unison to establish and track business-meaningful key performance indicators.

Just as plant operations need to be guided by corporate strategy; corporate strategy needs to be informed by facts from the floor. While Perfect Plant technology makes more information available to more people, it is the active, bi-directional dialogue between the top floor and the shop floor that makes possible Perfect Plant results such as business process innovation, customer responsiveness, regulatory compliance, operational excellence, and ultimately, profits.