Managing Variation is Corner Stone of Operational Growth but Requirements Platforms

I wrote about this 2 months ago, but seem to have spent the last two weeks talking and working through this “managing of Variability/ variation” as key. Too many people said that you are forcing standards, but these only come once you have a platform of abstraction on top of variation you want manage or accommodate.

 “How do you manage this Variability, so that production consistency, agility and increased production output are achieved?”   While the concept of everything being a standard would be great, it is not practical and there are variability’s that we must “manage” and others we must “accommodate”.

 “Standardization is not a business goal – it is a means to an end. 

The goal of business is to make a profit.”

                                                             - Continuous Improvement Leader

Thus, any standardization effort must distinguish between the different types of variety in a way that maximizes profit without constraining the business strategy. Thus, the business challenge can be summed up (using the mining example illustrated in the above) as follows:

1. Mastering necessary variety: When running a mine or plant, such things as Ore Body quality (raw material quality) that varies not according to the ideal plan. Breakdowns of equipment, weather like hurricanes/ cyclones disrupt ports and operations, tides effect ships coming into ports. These are “necessary variability” that all must be “mastered” to optimize production, operations, and you need to put systems in that allow you change plans and strategies as required. I had one workshop last week where the team was looking at long term strategies in the traditional sense. They had not adjusted their thinking to a long term strategy now has to make of shorter operational plans that can be adjusted in “near real-time” due to “master” these “necessary” variability. The operational systems must empower all people to be planners in their time span, to empower actionable decisions that are related to achieving the bigger strategy, and clear impact is understood.  As products, deliverables change and vary more regularly, plans will become shorter and increased volume of plans to achieve a business strategy.
2. Accommodating unavoidable variety: Situations like different automation vendors or implementations across equipment, processes and sites. It is impractical to think a company can acquire new or existing equipment and processes and expect a particular PLC or automation system, the OEM equipment suppliers just make the change to cost prohibitive. In order for companies to grow and be agile, they must “accommodate” natural variety from equipment suppliers, existing sites, but be able to apply their operational standards/ processes across the different equipment.  Another area that that limits operational excellence is the different “experience” levels of the workforce, from shift to shift, from site to site. The operational systems must abstract operational/ or site experience by embedding operational procedures/ actions into the system providing a guidance and consistency of operational decision and action. This starts to generalize the workforce experience enabling significant operational workforce flexibility between sites, and hiring, addressing the challenges of workforce / skill shortage.
3. Eliminating unnecessary variety: Anything other than the above two scenarios would be eligible for standardization.

It is NOT about “rip and replace with standards it is about “mastering and accommodating” these variations while enabling operational excellence growth and continuity by applying operational standards across this variability. Key is “platform strategies” that abstract the variability and can absorb variability while provide a platform for services that enable standards to be built on. Providing the architecture for “sustainable innovation” through managed standards that can evolve over time. Standards can be operational models in supervisory for alignment of context and structure, as well as operational actions to guide users through tasks in a consistent way. Also, configuration of control strategies should be over multiple vendors, where common control standards for process can be deployed over multiple controllers but managed in structured way.

Does this mean one platform? NO, not for the industrial landscape different layers of the industrial operations landscape have different roles. Providing different services and different ability to absorb a variety, but the common services between these platforms must enable them to “tightly aligned but loosely coupled”.

As we have pointed out the key to success in this dynamic but changing world is the ability to “Master Necessary Variety” in your business, while “Accommodating Unavoidable Variation”. Providing a structure to acquire new “brownfield plants” accommodate their existing automation and process. But apply the new companies’ differentiation through applying their operational procedures across these acquired plants.

This is not a new concept, but I seem to explain it a lot now days!!!!