Executives from throughout the process industries have continually expressed their frustration over the lack of effective measures and the lack of performance improvements from their production operations. The current approach of monthly financial metrics and daily operating metrics or key performance indicators (KPIs) is totally inadequate. Executives are desperate to have effective, real time measures of performance so they can manage and control business in an appropriate and effective manner.
IPS developed and patented an approach for implementing real time financial and operating performance measures in process manufacturing operations by utilizing process instrumentation as a source database for these measures and control software to model the measures. The resulting measures are then prioritized to the production strategy to produce Dynamic Performance Measures (DPMs) that can be used to empower every person associates with the operation. DPMs are actionable measures of the performance of the operation, not merely reporting measures. Empowering frontline personnel by displaying the DPMs on simple performance dashboards provides the ideal environment for continuous performance improvement.
DPM implementation requires a consulting engagement. Depending on the complexity of the production operation, consultants, teaming with selected client team members, plan a two to five day site visit at which they conduct a number of interviews and analyses to gather relevant information with respect to strategy, accounting measures, human resource capabilities, technical system capabilities, key performance indicators and instrumentation. The consultants, still working with client team members, perform the bulk of the analysis off-site to minimize client organization disruption. The team analyzes the information gathered and provides a proposal on the appropriate implementation of DPMs. Implementation is typically undertaken by a joint IPS client implementation team. The DPM models are implemented and run for a period of time (typically a month or more) without implementation of dashboards. This provides a performance baseline for the operation. The dashboards are then implemented and the operators and maintenance personnel trained on their use. The performance improvement is analyzed by the team to determine the effectiveness of the implementation. On average DPMs provide a 100% payback to clients in less than three weeks.
IPS holds multiple patents on the technologies behind the implementation of DPMs. Over the past decade DPMs have been installed in approximately 50 different process operations. In every case in which the DPMs are used plant engineering and plant operations and maintenance have generated significant economic value for their manufacturing operations. DPMs are the primary metrics for continuous business value improvement programs in process plants. The results are significant and sustainable economic gains, organizations working toward common goals and objectives, and quality and the morale improvements.