Decision-making across the enterprise

By : Jim Pinto,
San Diego, CA.

Today, a plethora of software tools and web services are available for enterprise integration. Perhaps the key job for the future CEO is simply to determine and monitor the key performance indicators (KPIs), letting local decision-making achieve results for the integrated enterprise.

A version of this article was published by:
Automation World, June 2004

Consider how managers made decisions just a few decades ago. Information was gathered through a variety of mechanisms in isolated sections and departments. This was passed up a human chain, usually in a financial reporting timeframe – monthly, quarterly and annual information, to facilitate analysis and adjustment. So, the job of a manager was to shuffle old, in many cases outdated, reports.

With the advent of the computer, some of the calculating and reporting mechanisms were improved, but the time frame remained centered primarily on financial control mechanisms. Decision-making was always a slow and laborious process, involving many people, sitting around a table to discuss printed reports. The reports were filtered and summarized through local decision-making successively at each level, culminating in top-level review and approval in the executive suite. There were little or no inter-relationships between different activities and locations. All multi-location, enterprise-level decisions were made in the same slow, lumbering timeframe – usually completely out of sync with the real needs. But, faster action was considered impossible, and perhaps even undesirable.

These control mechanisms may be compared to feedback in a control loop. When measurements and control mechanisms change too slowly, the result is a series of oscillations which worsen the control rather than improve it. Using this PID-control model, conventional management theorists developed feed forward and other mechanisms to improve performance. But there were few results – the real-world problems were too complex.

Web services & applications integration

Just a decade ago, most companies used packaged software solutions which worked well individually, but created information islands. Each system produced information which was imported into other systems in a relatively ineffective process, and never real-time. Besides, after being imported from other systems, the data changed, resulting in inconsistencies and data isolation problems.

Today, Web Services, Supply Chain Management, Customer Relationship Management, Enterprise Application Integration and a plethora of other software tools and services are available for enterprise integration. With this type of software, measurements can be made in real time, and information from all segments of the enterprise, including multi-location plants and factories, can be integrated to facilitate optimal decision-making at all levels.

The next, natural step is to make production and business systems work together for factory automation and process manufacturing. The same connectivity and interoperability benefits which users expect from selectable printer drivers for word-processing have become available for measurement and automation systems. There are many standard tools available to enable connectivity and interoperability of plant floor information between disparate fieldbus networks, programmable controllers, distributed control systems, plant assets and production management systems.

Integrated applications can access data the same way, whether it comes from a server connected to a PLC network, an industrial network such as Foundation Fieldbus, Profibus or DeviceNet, a SCADA system, or a production management system. This provides access to real-time plant-floor information, production and business applications across the manufacturing enterprise in a consistent manner. Multi-vendor and multi-location interoperability is a relatively simple extension with web services.

Users can now have a seamless exchange of production and equipment status information across plant floors and multi-plant locations, directly up to the management level. And real-time decisions can be made in response to real-time changes – in some cases in as little as a few seconds to an hour.

Web delivery of process data anytime, anywhere enhances collaboration between work groups and with multi-location plants. Benefits include the ability to benchmark top performing facilities, and learning (about what works, and what doesn’t) across the enterprise.

Key Performance Indicators (KPI)

With the broad availability of enterprise-wide integration tools, it becomes important to develop agreed, quantifiable measurements that reflect critical success factors. These are the KPIs which reflect corporate goals for all segments to follow. The definition of what they are and how they are measured should not change often, to ensure that different departments and locations remain in step, synchronized to the same measurements.

Indeed, perhaps the key job for the future CEO, or executive board, is simply to determine and monitor the KPIs, letting local decision-making achieve results for the integrated enterprise.

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Copyright 2003 : Jim Pinto, San Diego, CA, USA