Industrial automation has revolutionized the way manufacturing sector functions in the recent years, improving operational efficiency and performance.
Industrial automation has revolutionized the way manufacturing sector functions in the recent years, improving operational efficiency and performance. While efficiency remains a primary objective in most cases, automation has also expanded to ensure better safety and reliability of equipment.
But now, companies are also discovering that automation can have a positive impact on their bottom line. In a recent blog post, Steve Elliott, Senior Marketing Director at
Schneider Electric, pointed out that while this is a relatively new focus area for automation, it is definitely a key part of any business.
“For 100 years or so industry has been ignoring the fact that profitability rather than efficiency is really at the heart of the manufacturing or production process,” says Peter Martin, vice president and Edison fellow at Schneider Electric, was quoted in the post. “We’re discovering that now, with the latest developments in technology and in control theory, we’re able to apply control beyond just efficiency, safety, and reliability, but to profitability as well. We call it Smart Control.”
For instance, about two decades ago, customers would fix electricity utility prices with the supplier well in advance. But now this has changed as open power grids have given way to frequent price fluctuations. The situation is similar with things like natural gas and other natural resources. These constant changes in price have shifted the paradigm for traditional enterprise resource planning systems (ERP) that prioritized closing books monthly.
After debating this problem with several executives, Martin and his team realized that “by using sensors in a plant we could model real-time accounting at each cost and value point in the process, and these measurements would allow us to provide profitability control, pulled together with efficiency, safety, and reliability.”
This allows operational profitability to be calculated in real time in line with the key variables that fluctuate constantly. This, in turn, can help a manufacturing company improve its bottom line.
Giving an example of a mineral processing plant, Martin elaborated on his point. Traditional systems require the ore to be crushed and powdered before the metals can be extracted. Three factors influence profitability here, cost of material at the consumption period, energy, and the value of the final product when it is out. These have to be calculated and fed to a control system with a control algorithm, that would, in turn, control the speed or open a valve.
“But with real-time accounting, an algorithm will calculate the production value at each stage for each particular time period and put that value into a historian for storage and future analysis. As a result, you have a day-long list of values at every point where cost is incurred,” Martin notes.
The blog post further quotes Martin as saying that the industrial automation sector is set to go through a major change in the next five years. “We’re a conservative industry and so the items that we’re selling today will still work in 20 years’ time, but there’ll be more of a focus on asset performance. Each and every asset will act as its own autonomous system. After all, if we can make autonomous cars, we can make autonomous compressors and reactors,” he was quoted.