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NOV-DEC 2017

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SPECIAL SECTION Applying real-time business control Automation professionals have a clear role when it comes to controlling business performance. It should involve, but per- haps not be limited to, applying real-time process and logic control to the real-time business variables that affect operational profitability. As with any control strategy, the first step is to develop the appropriate mea- surement that can be made within a cer- tain period (real time) to provide effective decisions support (control). This has been a challenge for automation profession- als for the past 30 years, perhaps because they are averse to cost accounting. Au- tomation engineers tend to work in the natural sciences, but by its very definition, cost accounting is an unnatural science, i.e., it is a man-made discipline. Over the years, automation engineers have tried many times to develop their own key performance indicators (KPIs) to capture the economics of production op - erations. But because these KPIs do not often align with cost accounting measures, they have not been accepted by business management. After all, the finance team's job is to measure business results, so any real-time business measurement system must align to its cost accounting measures. The good news is that cost accounting measures are typically based on reason- ably simple algorithms that can be easily modeled, by combining process sensor data and business data, and then execut- ed in real time within the process control- lers. These measures can then be added to process historians to develop a real-time activity-based accounting database. It is important that these real-time busi- ness measures are made as close to the process as possible, and for every cost and value point across the operation. Every piece of equipment, such as a compres- sor, contains cost and value points. By de- veloping the real-time accounting models at the lowest level in the operation, both the business and operations teams can measure the profit impact of any perfor- mance-improving initiative executed in the operation. Because this approach lets the teams know which initiatives add the most value and should, therefore, be their focus, it enables them to better control the profitability of the operation in real time. Once the real-time business measure- ments are in place, the next step in apply- ing business control is building an effective real-time business decision-support sys- tem for all profit-impacting personnel in the operation. There are many approaches to effective real-time decision support. The feedback mechanism can be optimized according to the experience and knowl- edge of every person within the operation, and for his or her area of responsibility. The most common approach deployed today is a visual dashboard through ei- ther a console or mobile device. These can be very effective, but there are other feedback mechanisms, including audible feedback and approaches such as vibra- tion. These decision-support systems act as learning tools, giving each person in the operation immediate feedback about whether or not an action added business value. The entire workforce can then ad- just its activities and actions to drive the most value—safely. This is the essence of manual real-time business control. Everyone within the industrial opera- tion will be able to use these systems to make more effective operating and busi- ness decisions. Operators can use them to learn what the most effective set points are for optimal business results. Maintenance personnel can use them to set schedules more effectively to yield better operations and business results. Engineers can use them to ensure their process control strat- egies are aligned with business objectives, and managers can use them to solve pro- duction problems more quickly and effec- tively. Real-time business decision-support systems driven by real-time accounting measures turn every person in the opera- tion into business performance managers. It is important to mention that busi- ness control must always be executed according to the constraints imposed on the process, including risks to the reliability, safety, and environment. To drive measurable operational profit- ability improvements safely, these risks must be measured in real time too. Evolving role The increasing speed of business has caused industrial manufacturers to lose control of their operational profitability, even while their processes are in control. Business managers are searching for a so lution to this difficult business problem, but the answer is not to be found within their transactional ERP systems or the IT teams responsible for them. Instead, it is in the operations layer, the realm of real- time control. That is why the role of automation professionals is evolving. They comprise the only talent base in most industrial companies that understands real-time process dynamics and control, the two disciplines required to develop real-time business measurement and control. In the world of the IIoT, they will be able to do more than control the efficiency of the process. Because of their expertise in applying real-time control, they will be asked to control the profitability of the operation too. Automation professionals have a very promising future, as long as they step up and lead the development of the real-time business control systems that supersede real-time process control. The time has come. The key to driving and control - ling measurable operational profitabil- ity, safely, is in the hands of automation pro fessionals. n ABOUT THE AUTHOR Peter G. Martin, PhD (peter.g.martin@ schneider-electric.com), is vice president, business, innovation and marketing, for Schneider Electric. He holds multiple patents, including patents for dynamic performance measures, real-time activ - ity-based costing, closed-loop business control, and asset and resource model - ing. Martin authored or coauthored four books, most recently The Value of Au - tomation , and he received an ISA Life Achievement Award. View the online version at www.isa.org/intech/20171206. 42 INTECH NOVEMBER/DECEMBER 2017 WWW.ISA.ORG Automation professionals have a very promising future, as long as they step up and lead the development of the real-time business control systems that supersede real-time process control.

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