Demand-DrivenProduction&Performance

Management

Special Report: Collaborative Software July 2005

Supplement to Sponsored by

Bull’s Eye!How leading manufacturers target

business performance

Bull’s Eye!How leading manufacturers target

business performance

in this issue:pg2 Industry Experts

Speak Out

pg6 Arla Foods Opts for Excellence

pg9 Steel Leader Revolutionizes Production

Demand-DrivenProduction&Performance

Management

TODAY’S GLOBAL MARKETPLACE isdriving manufacturers to reevaluate their businesspractices. Continued survival depends on howwell a company integrates its people, technolo-gies and processes, and provides the critical visi-bility that will lead to better decision-makingand enhanced performance.

In this virtual roundtable, industry leadersAlison J. Smith, Senior Research Analyst,AMR Research, Boston; Charles Johnson,Worldwide Managing Director,Manufacturing Industry Unit, MicrosoftCorp., Redmond,Wash.; SudiptaBhattacharya,Vice President, Manufacturing,SAP Labs, LLC, Irving,Tex.; and Michael

Bradley, President,Wonderware & ArchestrA BusinessUnit of Invensys, Lake Forest, Calif.; speak out onthe important issues manufacturers must address.Here’s their advice on how to manage life-cyclecosts, exploit market opportunities, mitigate risk andchoose partners to achieve long-term success.

How important is the integration of people, tech-nology and business processes to the success ofaccelerating manufacturing performance?

Alison J. Smith,AMR Research: There is nodoubt that the integration of people, technology andbusiness processes is important, but rational discourseabout the role of technology is impossible until anorganization has straightened out its business process-es, which are in turn shaped by the goals and cultureof the organization. Of the companies we routinelywork with, those who are most successful have wellengineered business processes that support the “now,”as well as provide a path for the future. Technologyfor these users is an enabler—a set of tools that canbe leveraged to execute sound core processes fasterand at less expense.

Michael Bradley,Wonderware & ArchestrA,Invensys: The communications and software technol-ogy certainly exists today for integrating automation,information technology (IT) and business systems.This integration can ensure that best practices areenforceable and repeatable. However, the most criticalperformance edge most often comes from empower-ing all of the people involved.This visibility needs tobe available in real-time, such that the collaborativeefforts of the right people can be harnessed to quicklyreact to inevitable variations and changes to customerorders, supplies and plant asset availability.

How do production and performance manage-ment capabilities enable companies to not onlyget better visibility of their manufacturing per-formance, but also to proactively manage produc-tion costs and exploit market opportunities?

Sudipta Bhattacharya, SAP: Production andperformance management capabilities depend ontwo key elements: the granularity of information andthe latency of information. Identifying and running

Industry Experts Speak OutAnalysts and leaders from AMR, Microsoft, SAP and Wonderware

discuss how manufacturers are accelerating their business performancethrough demand-driven production and performance management.

2 Demand-Driven Production & Performance Management

accurate analyses on cost levers is improved when acompany has granular visibility into manufacturingoperations. In addition, more access to real-timeinformation enhances the ability to identify andmanage deviations. For instance, understanding mate-rial variances individually across a four-stage manu-facturing process will help identify which specificprocess and material to focus on.This is the degreeof granularity needed. However, this granularity byitself is not enough. Manufacturers also need tolower the degree of latency between process occur-rence and analysis of the variability.

Charles Johnson, Microsoft: Metrics and per-formance management are key to efficiently execut-ing against goals and facilitating course correction atall levels of the enterprise. Focusing on the customerthrough visibility into demand trends and productpreferences—with clear linkages to manufacturing—ensures alignment between demand and manufactur-ing operations, thereby reducing excess inventoryand operational costs while minimizing stock-outs.

Bradley: Digital dashboards and scorecards areeasy to create. What’s more difficult is the design andaccuracy of what is behind them.The chief financialofficer, plant manager, operations supervisor, plantengineer, maintenance manager, quality manager andplant-floor operator all require different views ofinformation and different actions they can take thatare relevant to their roles. Modern software systemscan facilitate the rapid deployment of flexible infor-mation models and views that can serve all of thesedifferent constituents in a secure and reliable fashion.

Based on your best customers’ experiences, howare companies addressing life-cycle costs associat-ed with production and performance managementcapabilities, and what, in your opinion, are some ofthe key considerations for managing these costs?

Smith: Production and performance managementare two separate issues. Production management is

mission-critical—workorders, product specifica-tions and routings must bedispatched to the produc-tion environment if prod-ucts are to be manufac-tured at all. Performancemanagement is more aboutmeasuring and analyzing aspects of those criticalprocesses against a “goodness” criteria definedby the business.We see many companies retro-fitting performance management capabilities toexisting production management systems, sim-ply because the cost of ripping out and replac-ing core production management capability isboth disruptive and costly. In contrast, the addi-tion of instrumentation, enhanced data acquisi-tion, analysis and visualization tools can beaccomplished non-invasively, i.e., without per-turbing core processes, and we’ve seen cases inwhich such tools pay for themselves in a mat-ter of weeks, if not days.

Johnson: Clear identification of businessand IT challenges go a long way in under-standing where to best make investments overtime. For example, the automotive industry isfacing high costs in warranty reserves, so trace-ability coupled with early warning systems areimportant areas of investment that promisesolid returns.The oil and gas industry faceschallenges in terms of declining reserves, and isinvesting in technologies for better recoverabili-ty, as well as looking foralternate sources. In gener-al, aligning capabilities withclearly identified competi-tive and industry chal-lenges provides a way tomake targeted investmentswith tangible returns.

“Performance management tools—specifically applicationsthat leverage data already being generated—represent

those rare low-risk, high-value investments that are availableto manufacturers today.”

—Alison J. Smith, Senior Research Analyst,AMR Research

“Manufacturing visibility needs to be available in real-time, such that the collaborative efforts of the right

people can be harnessed to quickly react to inevitablevariations and changes.”—Michael Bradley, President,

Wonderware & ArchestrA Business Unit of Invensys

July 2005 3

Bradley: Our leading customers are starting withtheir most critical business and operations practicesand incrementally standardizing and evolving thesepractices using new software approaches, thereby sav-ing on the up-front investments, as well as the ongo-ing application generation, maintenance time andcosts. They are benefiting from up to 70 percentreductions in the typical time to create, re-use andre-deploy proven applications.

Bhattacharya: Leading edge companies thatSAP works with are addressing life-cycle costs byfocusing on scalable, integrated, standards-basedtechnologies. Unfortunately, disconnects acrossmanufacturing automation, execution, and busi-ness departments and systems have led mostcompanies to seek point solutions to addressthese layers.While the layers may each havebest-in-class applications, integrating these lay-ers has proved to be a challenge. Maintainingmultiple solutions with multiple adaptors leadsto spiraling life-cycle costs.

How can manufacturerslower their risk while inte-grating new production &performance managementcapabilities into their exist-ing automation and infor-mation systems?

Bradley: Proof-of-concept piloting and thedesign and testing of core customer applicationstandards are typical activities we use with ourcustomers to reduce risk.Today’s leading pro-duction and performance management imple-mentations involve not only the integration ofthe existing plant systems, but also tying thesesystems directly into customers’ business andenterprise resource planning (ERP) systems.Industry-wide software vendor support of stan-dards such as eXtensible Mark-up Language(XML),Web Services and the ISA-95 integrationstandard from the Instrumentation, Systems and

Automation Society, are providing a sustainableframework for achieving real-time, business-to-plantand plant-to-business interactions.

Smith: Performance management tools—and I’mtalking specifically about applications that leverage

data already being generated in some form by theenvironment—represent those rare low-risk, high-value investments that are available to manufacturerstoday.The existing processes needn’t be altered,because what you’re really doing is creating a separateanalytical framework that can be overlaid on existingdata stores, whether those are historians, operationaldata stores, relational database management systems,plant accounting systems or, more likely, some combi-nation of all of those sources and more.

Bhattacharya: Manufacturers can lower their riskwhile integrating new production and performancemanagement capabilities by dealing with both inter-nal and external factors. From an internal processmanagement standpoint, it is essential to be able toidentify a few key change agents, supported by seniormanagement, that share a common vision for theintegration of the new capabilities into the existinginfrastructure. From an external perspective, it isequally important to identify a solution providerwho understands the business and can be trusted tocontinually invest in enhancing applications andtechnology that enable the integration of existingand new systems.

Johnson: Problems frequently arise when too manychanges are attempted all at once, increasing the riskof getting all the moving parts aligned and coordinat-ed in time. Projects to enhance and migrate capabili-ties work well with a clear understanding of the exist-

ing automation and IT systems, mapping out the dataand process flows, and assessing impact on the peopleinvolved. Good preparation in terms of training, edu-cation and evangelization for the organization to adaptto the changes is important for success.

How have IT systems, globalization, scarce engi-neering resources and life-cycle costs for produc-tion and performance management systems affect-ed vendor and partner choices for manufacturers?

Bhattacharya: Maintaining status quo will fail intoday’s competitive environment.The ability to con-tinually innovate and adapt quickly is a key elementin success. IT systems, globalization and scarce engi-neering resources have led companies to move fromspending the bulk of their IT dollars on maintainingexisting systems to investing in rapid innovationacross business processes. Leading manufacturers real-

4 Demand-Driven Production & Performance Management

“While each layer may have best-in-class applications,integrating layers has proved to be a challenge.Maintaining multiple solutions with multiple adaptors leadsto spiraling life-cycle costs.”—Sudipta Bhattacharya,Vice President, Manufacturing, SAP Labs LLC

July 2005 5

ize that working in a passive “maintenance” mode isa short-term strategy set to fail, especially in the cur-rent environment of hyper innovation.

Johnson: Manufacturers have typically respondedto many of these dynamics by simplifying their sys-tems and standardizing on fewer vendors and forgingcloser relationships with them. Pressure to reducecosts and resource scarcity has sometimes led to out-sourcing of functions. Manufacturers are increasinglypressuring vendors to adopt standards as a way ofreducing integration costs and extracting more func-tionality from existing investments. Simplicity, ease-of-use, manageability and a greater emphasis ondemonstrable business value are increasingly used invendor qualification.

Smith: We’ve seen a couple of different dynamicsemerge as a result of these trends. On the technologyside, there’s a definite preference for products thatcan be maintained by the manufacturing organiza-

tions without requiring a large stable of consultants.In terms of partners and vendors, our ongoingresearch into manufacturing IT spending shows apreference to purchase manufacturing IT from a sin-gle large provider, like an automation or ERP ven-dor. On the other hand, growth we’re seeing for thebest-of-breed quality, manufacturing execution sys-tem (MES) and enterprise manufacturing intelli-gence (EMI) vendors clearly indicates that size is nota deterrent.This changes as you start talking aboutglobal standardization and roll-outs. In these cases,the size and stability of the integration partner—notthe technology vendor—becomes paramount.

What would you consider a low-risk approachfor manufacturers to begin to develop demand-driven production and performance capabilities?

Bradley: First, companies should identify the mostcritical manufacturing business issues by collectinginputs from all levels of the organization. From there,the company should pilot a modular solution toprove that they can really address the top-level prob-lems.The company should have clear visibility tovalid performance metrics, as well as the ability tocontrol, adjust and adapt to events and alerts.Companies should choose partners who take a struc-tured and standardized approach to achieving busi-ness objectives in a fashion that leverages the existing

investments in systems and people.The best partnersare those who are committed to innovate and evolvealong with their customers in this change process.

Johnson: Manufacturers will do well to first gaina clear understanding of the linkages between theirmanufacturing processes and the overall businessgoals and objectives. Moving to a demand-drivenmodel will reveal the focus areas for process changesand the interrelationships across the end-to-endvalue delivery chain. Rather than attempting whole-sale changes, identifying a few strategic changes at atime along a roadmap will demonstrate returns, buildsupport and generate confidence. Ultimately, it is notso much a choice but a necessity for manufacturersto eventually move to a customer-focused demand-driven model.

Bhattacharya: The first step to developing demand-driven production and performance capabilities is toidentify the weakest link in the value chain, whether

that’s visibility into realcustomer demand, manu-facturing responsiveness orsomething else. From there,manufacturers and theirpartners determine whichapplications and technolo-gy can be used to improveand accelerate the process.Those who conduct pureprocess improvements must carefully examine theimplications of the process and ensure that they arerepeatable, automated, faster and scalable in order toeliminate risk.The next step is to identify which per-formance indicators will allow the manufacturer tocontinuously track progress and adapt where necessary.

Smith: There is no one-size-fits-all approach tobecoming demand-driven in production because ofinherent differences in business models and verticalindustries served.The kind of demand signal a busi-ness can shape or receive depends largely on wherethat business is situated in the supply network.Production capabilities, therefore, become the ulti-mate shock absorbers for demand signal variability,and need to be tuned for rapid response.Withoutongoing visibility, it is impossible to understandwhich production commitments you are capable ofmaking, should make, and where to execute on thosecommitments most profitably. ●

“Manufacturers are increasingly pressuring vendors toadopt standards as a way of reducing integration costs and

extracting more functionality from existing investments.”—Charles Johnson,Worldwide Managing Director,

Manufacturing Industry Unit, Microsoft Corp.

ARLA FOODS, the largest dairy company inEurope, receives around 7.2 billion kilograms ofmilk per year at its 70 plants in Denmark,Sweden and the United Kingdom, and devel-ops approximately 200 new products annually.The company prides itself on providing thefreshest milk products on the market througha concept called the “Arla Express,” whichdelivers milk from the cow to the grocerystory shelf within 12 hours.

Like other successful manufacturers,ArlaFoods continues to face price pressure fromglobal markets, forcing constant reduction ofproduction costs.Time-to-market and time-to-volume remain critical factors in meetingcustomer demands for increased complexity inproduct mix and timely supply.

Also like other manufacturers,Arla realizesthat sustaining profitability and success in themarketplace is no longer just about controllingcosts—it’s about speed. Arla Foods needs theability to respond rapidly and cost-effectively todemand and supply variations, and at the sametime understand how actual performance andcurrent operational activities align with businessobjectives. But more than just reacting to chang-ing market conditions or operational losses after thefact,Arla Foods needs the ability to exploit new

opportunities for making profits before they vanish.To achieve sustained profitability,Arla Foods, since

2002, has executed a global strategy called “OneArla,” with the objective of standardizing its businessprocesses into a single system and integrating high-

level business information systems with the plant-floor information systems.

For the manufacturing operations,Arla needed toquickly duplicate its processes for milk, powderedmilk and cheese across multiple plants with a com-mon set of standards, in order to move informationfrom the equipment and manufacturing processes allthe way up to the enterprise resource planning(ERP) system.This would increase real-time visibilityinto all of the operations and improve planning andexecution, while working within the existing infra-structures across the multiple plants.

p r o f i t p r e s s u r e sPressures to improve production and profits exist at

the local level and at the corporate level.Year after year,the local plants have had to deliver increased produc-tion profitability at equal or higher levels of quality,while still meeting budget constraints.They also haveneeded flexibility in terms of reduced time-to-marketand time-to-volume to cope with the rapidly increas-ing complexity in product mix, due to private labelingand packaging. And they have had to comply withinternal procedures for product quality documentationas well as government and institutional regulationsdesigned to protect public health and safety.

Challenges at the corporate level have included:integrating global business processes with the compa-ny’s ERP system from SAP AG, of Walldorf, Germany;improving general profitability through better visibilityinto its diverse plants; leveraging best practices; usingkey performance indicators (KPIs) in a uniform way;reducing costs of ownership; adopting corporate stan-dards; and implementing maintainable solutions fromthe plant floor to the business level.

To meet these challenges,Arla needed to adopt a lowrisk, scalable, reusable approach that could adapt to futurerequirements for processes, technology and people, whilestill keeping within local plant budgets.The mainrequirement was for users to have the ability to buildupon their existing infrastructures without impactingtheir existing systems or disrupting production.

6 Demand-Driven Production & Performance Management

Arla Foods Opts for ExcellenceIn its quest for operational excellence, the Danish dairy giant

deploys standards-based automation solutions to integratebusiness and manufacturing systems.

The adoption of the Wonderwaresolutions as corporate standardsreduces costs by reusing engineeringapplications and standardizingequipment maintainability.

c e n t r a l i z e d I TBefore the “One Arla” program was introduced, pro-

duction information technology was defined locally ateach plant. Now, all information technology functionshave been combined into one central engineering sup-port function called Production IT. Its task is to ensurethat both the local plant and the corporate officesreceive the information needed to improve productionoperations in each plant, and improve performancemanagement across the enterprise.

The new Production IT group was given severalambitious goals. First, it needed to standardize on theSAP ERP to provide plant floor information integra-tion based on market standards. All data collection,analysis and process optimization in the local dairydatabases needed to be structured according to theguidelines established by the ISA-95 integration stan-dard, promulgated by the Instrumentation, Systemsand Automation Society (ISA). Implementation androll-out used a scalable approach, in which slices ofone solution could be reused and applied across dif-ferent plants and systems.

Production IT also needed to build internalcompetencies in key areas and technologiesinvolving both central and local resources.And itneeded to establish a dialog with suppliers andinternal staff, in order to share Arla’s strategicgoals, drive increased adoption of market standardsand continuously address issues of technologyshortcomings.

Arne Svendsen, Production IT Manager at ArlaFoods, stated in a recent interview,“The integrationof business and manufacturing has a strategic impor-tance for Arla Foods in supporting the challenges thebusiness is facing in terms of optimizing production

July 2005 7

“With an expansive growth strategy, itis a must to integrate business and

manufacturing, especially when newfacilities become part of the family

due to mergers and acquisitions.”

performance, as well as fulfilling food safety regulato-ry requirements.This integration includes the transferof detailed production schedules from our ERP sys-tem to the plant floor, as well as the seamless collec-tion of key processing and packaging figures.Withan expansive growth strategy, it is a must to inte-grate business and manufacturing, especially whennew facilities become part of the family due tomergers and acquisitions.”

A firm believer in standards, Svendsen has beeninfluential in driving the adoption of market stan-dards, and, in particular, the ISA-95 standard. Forexample, SAP recently announced full support

for the ISA-95 eXtensible Mark-up Language(XML) standards using SAP’s ExchangeInfrastructure (XI) based on NetWeaver technol-ogy. Svendsen’s team worked closely with SAP toensure the successful evolution of technology thatwould meet the requirements of Arla Foods.

i n d u s t r i a l b a c k b o n eWith Production IT on a roll,Arla wanted to con-

tinue momentum and take it a step further by integrat-ing the local plants on a common industrial infrastruc-ture.The company chose the ArchestrA infrastructurearchitecture technology and the Enterprise IntegrationApplication from Wonderware, a business unit of

Invensys based in Lake Forest, Calif., as the enablingsolutions to provide the industrial backbone for all ofArla’s plants.The adoption of these technologies as cor-porate standards reduces costs by reusing engineeringapplications and standardizing equipment maintainabili-ty. As well, the Wonderware software solutions can bescaled to meet local plant budgets and requirements.

Enterprise Integration Application adopts the ISA-95 standard called Business-to-Manufacturing Mark-upLanguage (B2MML) as the common message structureacross the enterprise, enabling the maintenance of anintegrated solution for a large number of sites. It alsoleverages the SAP NetWeaver XI to employ a highly

standardized business-to-manu-facturing solution with easiermigration to future versions.

Because of the ArchestrAtechnology,Arla can standard-ize on manufacturing applica-tions with a common manu-facturing information infra-structure, while giving eachplant the freedom to use spe-cific solutions according to itsneeds.Wonderware’s produc-tion and performance man-agement software increase themanufacturing capabilities inthe SAP ERP to deliver acomprehensive solution formanufacturing operations.

While Arla’s approach is tore-use existing manufacturingexecution systems (MESs), ifapplicable,Arla does makeextensive use of other compo-nents in Wonderware’s pro-duction and performancesolution to optimize itsprocesses.These include theInBatch and InTrack for man-

ufacturing execution; the Industrial SQL Server his-torian; the Active Factory trending and analysis tool;the Production Events Module for traceability;DTAnalyst for downtime and efficiency manage-ment; and the QI Analyst statistical process analysisand control software.

The combined approach reduces efforts and costsassociated with designing, building, deploying andmaintaining secure and standardized applications thatsupport manufacturing operations. Using solutionsfrom Wonderware and SAP to synchronize manufac-turing operations with business objectives,Arla isgetting the speed and flexibility it needs to achievesustained profitability. ●

8 Demand-Driven Production & Performance Management

Envision

SAP

LogisticsFinished goodsFillingMilk preparationRaw material-receptionWeighing

Stock controlProcess control-line/machine controlInweighing

MES/PCS interface based on OPC

Maintenancedata acqBatch Mgmt

Downtime-registration

Lab Master

Traceability dataOrder

information

MES:ERP/MES integration

SAP Stock mgmt

QM-Laboratory, quality

PP/PI-Production planning

MM-Material Mgmt

DatabaseDatabaseDatabasePlantPlantdatabasedatabasePlant

databaseEnergy-&envir. data

Recipeediting

Production-data acquisition

In this illustration of the layers of interconnectivity that Arla Foods will useacross all of its plants worldwide, data flows back and forth in a closed loopfrom the enterprise resource planning solution at the top layer, to the man-ufacturing execution system in the middle, to the plant floor at the bottom.Wonderware’s production and performance management software operatesin the MES block, while the SAP solution functions at the ERP level.

SINCE ITS CREATION almost 3,000 years ago—when ancient metal workers first removed nearly allof the impurities from iron—steel has had a pro-found impact on civilization. From the hand-forgedweapons that gave tribal leaders a dominant advan-tage over their bronze-equipped neighbors to themass-produced railway lines and trains that drove theindustrial revolution and forged the world we live intoday, the common critical ingredient has been steel.

Though the importance of this iron/carbon alloyhasn’t changed, the way that it’s produced has beenrevolutionized. One of the world’s leading steel pro-ducers, Nucor Steel, based in Charlotte, N.C.,employs the latest technological advances to maintainits position at the forefront of the industry. One keyto the company’s success is its use of electric arc fur-naces run by production and performance manage-ment software provided by Wonderware, a LakeForest, Calif.-based business unit of Invensys.

Software solutions from Wonderware, a leadingprovider of industrial automation and informationsoftware, empower users to improve operational effi-ciencies, product quality and plant throughput byleveraging the plant’s existing hardware, software andapplications to deliver a rapid return on investmentwith the lowest possible system life-cycle costs.

“We live in a worldwide economy now,” saysDennis Boyd, of Nucor.“So it’s important that westay on the leading edge of technology, both in howwe control our furnaces and in how we collect datafrom them.”As supervisor of the melting area electri-

cal systems at Nucor’s mill in Berkeley, S.C., Boydhelped revamp the mill’s control systems withWonderware industrial control platforms.Withcompetitive pressures growing in the global steelmarket, Boyd and his colleagues wanted to makesure they were getting as much capacity as pos-sible from their operation, and solidifying thecompany’s market position.

f l e x i b i l i t y i s c r i t i c a lThe melting area of a steel mill is one of

the harshest industrial environments in themanufacturing world.As temperatures soar to3,000 degrees Fahrenheit—almost one-thirdof the surface temperature of the Sun—andraw materials measured in the hundreds oftons are manipulated, an incredible strain isplaced on equipment and control systems.

The majority of the world’s carbon andalloy steel production uses electric arc fur-

naces, which are fired primarily with scrapsteel.At Nucor’s Berkeley mill, each load con-sists of 180 tons of metal, about 80 percent ofwhich is recycled scrap. Once charged into thefurnace, an intensely enormous amount ofenergy—1,200 volts and 160,000 amps—isadded, generating enough heat to melt thecharge. Impurities float to the top and areremoved, leaving 165 to 170 tons of pure liquidmetal. Carbon and alloys are then added to themix to add tensile quality and produce therequired grade of steel. Once it is determined tobe perfect, the steel is transferred to the casters,where it’s molded into sheets of thicknesses andwidths to meet specific customer orders.

Flexibility in this environment is a key challenge,as equipment disruptions occur frequently and com-ponents must be replaced.The organization must alsobe prepared to respond to rapidly changing market

July 2005 9

Steel Leader Revolutionizes Production

Reduced downtime,increased productivity and a

dramatic improvement inthe quality of daily executive

reporting are just some ofthe benefits Nucor Berkeley

realized in theimplementation of a new

performance managementsolution.

“One of the biggest benefits we sawwas the elimination of downtime.

This has saved 2 percent to 5 percentproductivity and has also allowed us

to go to more advanced controls.”

conditions. By providing a clear picture of what’shappening within the process, the Wonderwaresoftware delivers this flexibility.

“One of the issues we deal with a lot is therapid changes we need to make,” says MikeHiggins, Level 2 Automation Engineer, NucorSteel Berkeley.Throughout the implementationof the new system, Higgins was responsible forprogramming the programmable logic con-trollers (PLCs) and managing the supervisory

control system.“Our mill is dynamic, our com-pany is dynamic and our shop is dynamic.Weare always trying to make changes to improveour process and we needed a system that wouldallow us to do that as quickly as possible.The lesstime we spend doing programming, the moretime we have for making improvements and rais-ing our total profits for the company.”

According to Higgins, the Berkeley mill hasrelied on Wonderware’s industry-leading InTouch

supervisory control and visualization software sinceit opened in 1997. But by 2002, the mill had out-grown the trending and analysis capabilities of theexisting InTouch application and needed to take itsdata collection and analysis efforts to the next level.

With the need for an advanced trending tool tohelp identify and eliminate problems that causeddowntime, Nucor managers turned to InSourceSolutions, a Wonderware regional Value AddedReseller headquartered in Richmond,Va., and askedfor a better way to collect and trend data.The onlycaveats: the new system had to work with theWonderware applications the mill already had inplace, and it had to deliver a thin client that couldwithstand the extreme nature of the productionfloor. InSource suggested updating and building onthe InTouch application already in place withWonderware’s IndustrialSQL Server historian andIndustrial Application Server.

The IndustrialSQL Server real-time plant historianputs the intelligence in Wonderware’s plant intelli-gence solutions, delivering the data, both current andhistorical, that empowered the melt shop team to dothe detailed analysis and trending to identify andeliminate the problems that cause downtime.

Using Invensys’ unique ArchestrA software archi-tecture, on which the Industrial Application Server isbuilt, Nucor was able to centralize all of the datacoming out of the different furnaces in the meltshop, providing tight integration regardless of itssource.The ArchestrA architecture is built on the lat-est Microsoft .Net and Windows Server technologies,and industrializes these platforms to offer a unifiedenvironment that enables the lowest integration andlife-cycle costs.

The Industrial Application Server provides a uni-fied environment for visualization, plant history,device communications and automation applicationintegration.Additionally, it provides a common con-trol and analysis capability and a facility for makingrapid changes to improve production processes.

Of particular value to Nucor Steel Berkeley,ArchestrA technology allows the use of standardizedApplication Objects for faster engineering.Thismeans that new equipment can be added or removedfrom the mix more easily than ever before. In anenvironment such as the melting area of a steel mill,where equipment has a short life-cycle, this is of crit-ical importance.

“Before we got up and running with IndustrialApplication Server and the IndustrialSQL Server his-torian, it would take days to add a new piece ofequipment to the control system,” says Higgins.“Now I can do that in a matter of minutes.”

10 Demand-Driven Production & Performance Management

“Before we got up and running with Industrial Application Server andthe IndustrialSQL Server historian, it would take days to add a new

piece of equipment. Now I can do that in a matter of minutes.”

Using the IndustrialSQL Server real-timeplant historian from Wonderware, the NucorSteel control room gets the data needed forthe detailed analysis and trending to identifyand eliminate problems that cause downtime.

i m m e d i a t e b e n e f i t s“One of the biggest benefits we saw was the elim-

ination of downtime,” says Boyd.A common prob-lem experienced in the melting area involved errorsin the melt process that resulted in holes beingburned in the sidewalls of the furnaces or the roofover them.These holes can be caused by a number ofdifferent failures, including an arc deflection, an arcflare or blowback from a co-jet, which blasts pureoxygen into the reaction to increase the temperature.Each of these errors causes the energy that should bepassing through the scrap steel charge to be directedat the sidewall, blasting a fissure that will take hours,and possibly even days, to repair.

“We use sensors to track the temperatures on thesides of the furnace,” adds Boyd.“We were able tocollect and track this much more accurately andcome up with more sophisticated control processes.”Specifically, he says, this enabled Nucor to do twothings.“Right off, it allowed us to alarm and shutdown before we got holes.We’ve all but eliminatedthe occurrence of these holes since we get enoughdata from the system to analyze and identify trends.This has saved 2 percent to 5 percent productivityjust through elimination of downtime. It has alsoallowed us to go to more advanced controls where,rather than shutting the furnace off, we can justvolt the furnace down.That gave us a 5 percent to10 percent gain in average voltage, which is direct-ly proportional to productivity.”

Reduced downtime and increased productivitywere only the start of the benefits experienced byNucor Berkeley following the implementation.Thenew system has also had a dramatic impact on thequality of daily executive reporting. Prior to deploy-ing the new system, operations data was fed directlyfrom the PLCs on the shop floor into the centralizedplant-wide data control system, where a custom C-coded application would retranslate it into the data-base.This meant that three disparate sets of the datawere required, and they weren’t always consistent.

With the open .Net architecture of theWonderware Industrial Application Server, Higginsand his team were able to completely bypass the oldsystem and feed data directly from the InTouch con-trol system into the IndustrialSQL Server historian,and then into the plant-wide data collection system.

Metrics from the day-to-day operation, such as thenumber of tons charged into each load, the tempera-ture in the furnace and the amount of time the fur-naces take to operate, are collected and analyzed eachday to identify opportunities to improve processes.With the Industrial Application Server, managers areconfident that the information they are workingfrom is accurate.

Higgins says,“The IndustrialSQL Server historianis something we’ve been looking for.We’d gotten tothe point where we knew we needed to makeimprovements to our data collection and analysis.Wewould visit other mills and we were way behindwhat other people were doing. Now, we are lightyears ahead.We went from being the butt of thespear to being the tip of the spear.

“Almost immediately after introducing theIndustrialSQL Server historian, we were able tosee rapid, immediate feedback on our data andprocesses,” continues Higgins.“We started bycollecting failure data, but over time, we havebeen able to use that as a basis, trending thosefailures so that now we can predict when they(failures) will occur, and we can schedule pre-ventive maintenance to minimize downtime.We are also able to track what happens at each

step in the production process, sampling thesteel at different stages to make sure each batchis going to meet the grade and quality demandsof our customers.”

“The steel industry is a very harsh environ-ment,” says Boyd.“Everything is temporary.Nothing is permanent.We see equipmentdestroyed and replaced on a daily basis.And weneeded a system that would enable us to makethose changes without reinventing the wheel on adaily basis.Wonderware delivered that system, and Iwould recommend it to anybody who is looking fora way to improve their process, speed up program-ming changes and increase profits.” ●

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Because the steel industry is a very harsh environment,with equipment destroyed and replaced on a daily basis,Nucor Steel implemented a system that would enablechanges to be made without reinventing the wheel.

Autorizovaný distributor firmy Wonderwarepro Českou republiku a Slovenskou republiku

Pantek (CS) s.r.o., Smetanovo nábřeží 1238/20a, 500 02 Hradec Králové, ČR, Tel.: +420-495 219 072 až 3, www.pantek.cz