Why OEE and Plant Visualization Projects Keep Failing [MondayMusings]

Posted by Matthew Littlefield on Mon, May 15, 2017 @ 10:00 AM

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The #MondayMusings Industrial Transformation blog series provides insight and analysis for executives from the previous week’s briefings, events, and publications @LNSResearch.

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Over the past several years, much attention has been paid to the concept of IT-OT convergence. For the uninitiated, IT-OT convergence is the idea that the silo’s existing between Corporate IT and Plant Automation (or OT) limits a company’s ability to leverage next-gen technology like the Industrial Internet of Things (IIoT). During this time, IT-OT convergence has mainly been relegated to the realm of conjecture or “future recommendations” in analyst reports.

IT-OT Convergence: Necessary, But Insufficient

In recent months, LNS has seen evidence that facts on the ground are changing. Three recent client engagements, all with major industrial companies, have involved organizations that have already achieved IT-OT convergence.

These three companies, each from different industries, have done an admirable job of addressing the people and process issues that create IT-OT silos in the first place. These companies have all implemented the following best practices:

• Created new hybrid Manufacturing IT organizations.

• Manufacturing IT is now led by an individual that has been cross-trained and possess a deep understanding of both IT and OT.

• Manufacturing IT has implemented a coherent set of technology management processes to ensure a more consistent technology architecture across IT and OT.

Unfortunately, breaking down the silos between IT and OT is not enough. LNS Research would consider IT-OT convergence a necessary but insufficient best practice. Implemented in isolation, it will do little to improve a company’s likely success in deploying technology on the plant floor.

In the LNS Research Digital Transformation framework, breaking down the technology silos between IT and OT is a critical factor in developing an Operational Architecture that defines a holistic roadmap for IT and OT systems.

Digital Transformation Framework.jpg
 

Unfortunately, the silos separating business and technology often persist and are detrimental to achieving a successful technology implementation. It is true that it is easier for business leaders to collaborate with technology leaders if there aren’t multiple technology organizations with conflicting priorities, but that doesn’t mean this collaboration happens on its own once the IT-OT silos are broken down.

Breaking Down Silos Between Business and Technology Leaders

LNS Research recommends that business leaders use an Operational Excellence (OpEx) framework to harmonize people, process, and technology capabilities. Often these OpEx programs end up taking the form of well-established Continuous Improvement (CI) initiatives, like TPM, Lean, Six Sigma, and the like. Ideally, these programs take the strategic objectives of the firm as an input and acts as a contribution to Operational Architecture initiatives.

In all three of the companies referenced above, the connection between Operational Excellence and Operational Architecture has not been established. Business leaders are defining the priorities for Operational Excellence but not sharing these requirements with technology leaders. Similarly, the technology leaders are not working with the business leaders to explain the realm of the possible today and into the future.

The result: Manufacturing IT organizations end up pursuing OEE and Plant Visualization projects with little understanding of how these technologies will support the broader Operational Excellence vision over time. Invariably, these projects end up facing the same challenges that have always been faced when business isn’t bought into technology projects - no sense of ownership, adoption challenges, and under-performance.

So how can business leaders and newly formed Manufacturing IT organizations avoid making the same mistakes business leaders and traditional IT organizations have been making for decades?

Start by establishing technology and business collaboration as a core enabler of Digital Transformation. Then business and manufacturing IT leaders should make cross-functional collaboration a central tenant of both Operational Excellence and Operational Architecture. It is easier said than done, but tactics that have proven to work include:

• Creating cross-functional executive leadership councils that meet on a monthly or quarterly basis.

• Holding yearly or bi-yearly Operational Excellence and Operational Architecture workshops with both business and technology leaders fully engaged.

By taking these low cost and effective steps, executives can be assured that high-level strategic objectives are supported by well-aligned technology and business initiatives. Furthermore, when technology decisions are made, they are made as part of a broader enterprise strategy that incorporates business buy-in.

If organizations go beyond IT-OT convergence and make these suggested process and leadership changes, with a focus on cross-functional collaboration, organizations should also be able to eliminate failed OEE and Plant Visualizations projects in the future.

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Tags: Operational Excellence, Overall Equipment Effectiveness (OEE), Industrial Internet of Things (IIoT), Digital Transformation, IT/OT, #MondayMusings