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Home Industrial: Technology, News & Trends Postponing Digital Transformation: Strategies to Mitigate Risks of Aging Automation Systems

Postponing Digital Transformation: Strategies to Mitigate Risks of Aging Automation Systems


Manufacturing companies looking to modernize or improve their technology often face several challenges and need to develop risk mitigation strategies to better understand what needs to be done. Keeping up with the evolving trend of industrial digitalization or smart manufacturing is not easy for many manufacturing companies. Most manufacturing organizations have invested heavily in older systems that have been running for a long time and on which operational staff has become somewhat dependent. This makes deciding to continue upgrading or migrating systems often difficult. Resistance to change causes some manufacturers to still operate with older equipment. With limited resources, it is difficult for them to keep factory automation up-to-date and running at peak levels, which can lead to issues that affect reliability, including unplanned downtime, extended downtime due to parts availability, and a lack of available alternatives. Performance, safety, networks, and security can also be affected. To address this situation, manufacturers must first understand what automation assets are installed in the plant and what materials are in inventory to support those assets. This initial assessment is the foundation from which a data-driven strategy can be derived and developed enterprise-wide.

Physical and Digital Data Collection

Collecting initial assessment data may be easier than one might think. Operations personnel can perform this data collection process physically or digitally using existing methods. For physical data collection, field engineers manually collect data. The amount of data collected depends on the size of the plant and requires some scoping. The process also includes the collection of spare parts information from the warehouse, which is critical to support the existing installed base assets. The digital data collection, approach involves running data collection programs across the network to identify and collect data on connected assets. In this case, the scope can be defined on a turnkey model, as the size of the plant will not have an impact.

If bandwidth is insufficient, after data collection is complete, a third-party reliability consultant can help analyze the data and develop risk-mitigation strategies, such as inventory management and repair and future modernization planning. To gain a clearer understanding of the risks associated with operational obsolescence and automated asset obsolescence, manufacturing personnel need a clear picture of the plant’s installed base assets. Once they have an in-depth understanding of the lifecycle state of their enterprise-wide automation assets, they can make strategic, data-driven decisions to mitigate risk.

Manufacturing company

Inventory Management and Maintenance Strategies

Manufacturers trying to extend the life of their aging automation assets must rely on reliable resources to repair failed equipment. This often requires the use of multiple independent repair providers in conjunction with original equipment manufacturer (OEM) services. The process is transactional and can leave companies operating in this manner dissatisfied with price, quality, and turnaround times. Quality has a direct impact on unplanned downtime, as plants need to wait for critical components to be repaired, and longer repair cycles can lead to extended downtime. Market leaders are taking a closer look at this process to understand its impact on the overall production process. Newer strategies are often based on long-term contracts, making the process less strictly transactional.

Two of these strategies are fixed-spend and all-inclusive models. With the fixed-spend model, the manufacturer determines the annual maintenance expenditure and issues a purchase order for that amount. All repairs are deducted from the purchase order until they are spent. This funding is available for all repairs. If funds are depleted before the end of the period, they can be added to the purchase order. In the all-inclusive model, the manufacturer and a third-party supplier agree on an annual amount based on a specified bill of materials (BOM). The amount covers all repairs to the BOM regardless of quantity. The manufacturer is not subject to any unexpected costs during the contract period.

While a good repair policy can have a positive impact on risk mitigation, it should not be seen as the only solution to implementing a comprehensive risk mitigation strategy. When combined with an inventory strategy, the impact of a repair strategy increases. Together, these two strategies can have a positive impact on the plant, helping to reduce downtime and mean time to repair (MTTR) when failures occur.

Manufacturers can work with the plant’s third-party technology provider to negotiate inventory levels to ensure adequate spare parts are available in the warehouse, off-site, or both. Quantities are determined by the installed base assets, the criticality of the operations supported by the automation system, and the availability of specific parts.

For example, if the plant has 100 specific parts, the stockroom will need approximately 10 parts to support the installed equipment, or perhaps 15 parts for a critical application. Off-site inventory can be protected and made available only to specific companies, thus ensuring availability when needed. Organizations can also supplement this with on-site resources to help manage the process and ensure that the desired results are achieved. A thorough understanding of the automation equipment installed in a plant is required to obtain the best maintenance and inventory strategies. The combination of these strategies allows factories and businesses to extend the life of installed infrastructure assets. The benefits of getting this right include reduced downtime, lower MTTR, and lower maintenance, repair, and operating costs by ensuring that the required spares are available when necessary and according to the level of criticality.

Once organizations understand their risk profile from an end-of-life perspective and the outdated automation technology used in production, they can leverage cloud-based technology to view, analyze, and use the data. They can also apply these data insights to continue to manage their risk mitigation strategies such as inventory management, maintenance, and modernization planning.


Digital Transformation and Upgrade Planning

Inventory management and maintenance strategies combine to allow manufacturers to defer technology modernization of installed infrastructure assets in the short term. Cloud-based portals allow them to better manage them on a day-to-day basis, helping to extend the lifespan of these outdated technologies. However, postponing digital transformation cannot and should not be indefinite. End-of-life and discontinued automation systems lack the performance, security, and cybersecurity features of advanced products on the market.

Modern technology will continue to advance, and manufacturers need to move with the times. Businesses need to start planning their modernization and upgrade projects and prepare for them, and in most cases, the planned expenditure will include the execution of multiple projects over a multi-year period, requiring capital expenditure approval. A reliable third-party technology and solutions partner can help businesses prioritize and plan these projects based on budget, criticality, production risk, and cybersecurity threats.

Digital transformation

Benefits of Having a Risk Mitigation Plan in Place

When manufacturing companies want to understand and take inventory of their plant-wide automation assets, they need a solid plan that includes a risk mitigation strategy with an eye toward future modernization. Modern control systems contain useful technologies and tools that can help manufacturers manage their assets and operations. When this infrastructure is combined with a strategic, data-driven approach to asset management and optimization, organizations can improve efficiency and productivity across the business to achieve desired business outcomes and maintain their competitive advantage.

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