Outsourcing control system integration makes sense
For manufacturers putting in a new line or in need of system upgrades, there are significant time and money advantages to outsourcing system integration.
Like most business leaders these days, manufacturers are tasked with doing more with less. They have become expert in producing as much final product as possible, with as little waste as possible, with as few people as possible, all the while being energy efficient and sustainable.
That’s a pretty tall order, keeping in mind that many elements are out of engineering and operation managers’ control. Enter the system integrator.
To maintain a Lean staff, manufacturers are outsourcing some of their engineering tasks, like project management, system design and implementation to system integrators. This is especially true for small- to-mid-sized manufacturers. For manufacturers putting in a new line or in need of system upgrades, there are significant time and money advantages to outsourcing.
But how do you know when to make a direct hire or outsource? Following are two examples of projects system integrators were called upon to work on and some of the considerations that were made before deciding to outsource.
Building materials manufacturer requires one-day cutover
A large international building materials firm produces, processes and distributes materials worldwide. Their goal was to upgrade an antiquated and unsupported Allen-Bradley PLC-2 controller with a less-antiquated (but still legacy) PLC-5, for use on an acid treat system. The project had to be fast-tracked and the cutover had a one-day window during a planned summer shutdown. The ultimate goal was to provide graphics support, alarms and better communications back to the maintenance shed, something that the PLC-2 could not do.
The company contracted system integrator Applied Sciences Group, a member of the Control System Integrators Association, to perform the conversion. ASG’s engineers were able to effectively isolate the parts of the software that were a straightforward conversion between the PLC-2 and PLC-5 hardware platforms. ASG was successfully able to develop new control algorithms for the sections of the software that were not easily converted, and they met the cutover requirement. While internal company resources may have been competent to complete this work, it is questionable that they could have met either the fast-track schedule or the cutover constraint given their other plant responsibilities. Indeed, the original schedule had a six-week estimate; as an outside resource focused on the task, ASG completed the work in two.
First and foremost, it is expensive to find and hire the right person to bring into your organization for what could be a limited time opportunity. Hiring expenses include recruiting fees to find technically qualified people, background checks and pre-employment tests, basic salary, employment taxes, benefits, space, office equipment, training and supervision. According to a Studer Group survey of 610 CEOs by Harvard Business School, it takes 6.2 months to reach a break -even point on a new employee.
Secondly, small to mid-sized manufacturers performing upgrades to maintain their competitiveness and productivity may do so on a somewhat erratic timetable. Some choose to deploy new technologies that will make them more environmentally friendly; or in some cases upgrades are required to comply with regulatory guidance. In these scenarios, outsourcing to a system integrator makes great financial sense.
System integrators work with manufacturers to develop the scope of work for the project, establish milestones and completion due dates all the while keeping a watchful eye on costs and expenditures. The system integrator’s project manager will provide timely communication to all internal personnel relevant to the project as well as manage any external communication with vendors that could include equipment price negotiation, documentation, training, delivery or set-up.
A system integrator won’t take six months to learn an organization’s process and procedures for a project. They will be credentialed, certified and ready to work on day one. These highly trained individuals will typically have their own programming tools and necessary vendor relationships to make efficient use of a project’s budget and timeline.
Projects have a beginning, middle and end. If a manufacturer had made a full time hire to support a specific project, the end of that project could mean an employee termination or layoff.
In the case of outsourcing, project completion merely signals a contractual end to the client/system integrator relationship, and the system integrator moves on to their next project. System integrators are tasked with performing a variety of upgrades across a broad spectrum of industries. They will work on disparate equipment from multiple vendors and to further complicate this, the age at which these systems, pieces of equipment or versions were put into service can range from current technology to several decades old.
In our scenario above, the project was to replace old PLC’s with slightly newer ones. The manufacturer had a narrow window of opportunity during a scheduled plant shutdown to avoid production downtime.
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Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey