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With Machine Monitoring, Instant ROI is Possible

Dave Edstrom
By Dave Edstrom CTO, Memex Inc.

There have been many process improvement trends in manufacturing over the decades, and none have had more significant ROI than machine monitoring. The increase in machine monitoring is owed in large part to the rise in popularity of the open and royalty-free interconnectivity standard MTConnect.

Machine monitoring provides the ability to know exactly what is happening on your shop floor anytime, anywhere in a quantified fashion. The bottom line with machine monitoring is it allows you to accurately measure, so you can manage your plant’s assets. A plant manager should be able to pull out his smartphone any place on Earth and know exactly what is happening with any machine tool or asset on the plant floor.

A classic case study of machine monitoring ROI was Magellan Aerospace’s ability to find 300 hours of a “hidden factory” using Memex’s shop-floor management system, called Manufacturing Execution Real-Time Lean Information Network (MERLIN). Memex CEO David McPhail was able to spot this hidden factory and instantaneous ROI with MERLIN.

The very first step all shops/plants should take is monitoring their shop floors. The crawl, walk and run approach makes sense: Begin by monitoring a few of your newer machines.

Perceived versus actual plant utilization is a common misconception. The facts are that only 2–4% of all shops or plants on Earth are being monitored. When asked, most plant or shop managers will state their plant utilization is in 65–75%. When hardware/software is deployed that can properly quantify this number, it is shown to be actually 25–32%.

Several aerospace firms, including Magellan Aerospace, Koss Aerospace, Actec Aeronautics, Herouk-Devtek, PCC Aerostructures, and Rose Industries, are using Memex’s hardware and software products. Many of these firms are embracing MTConnect as their connectivity standard.

The ROI in the computer industry is typically 18–36 months for hardware and/or software.

For example, if I am running the National Security Administration (NSA), what metrics do I use to accurately calculate hardware/software ROI? Would I use the economic cost of a terrorist strike and then attempt to quantify the ROI of faster hardware/software for signal intelligence?

This is where manufacturing does have a quite distinct advantage with the well-quantified costs to run a plant and to make parts when it comes to clearly determining ROI.

Let’s look at how McPhail recognized the possibility of huge ROI when he started MERLIN Event Monitor to see what was happening on the machine tools. The rolling time series monitor shows what is happening on any MERLIN-monitored device—down to a millisecond. He noticed an excessive number of M00s and M01s appearing on each of the three machine tools. M00 and M01 are mandatory and optional stops, respectively, so a machine tool is not making parts when M00 or M01 is active.

A team at Magellan spent three months reviewing multiple CNC part programs, run across three different machine posts, and removing the offending M00/M01 commands. Then they checked to make sure the changes made showed net benefit.

While finding an instant payback is not the norm, the ROI of machine monitoring is measured in weeks and months, and certainly not years.

It took two days to install hardware and configure all of MERLIN on the three machines. Magellan was able to cut those monthly downtime events to 100 hours from 400 hours—a net increase in machining capacity of 100 hours per month per machine. Multiply that by the hourly machining cost and Magellan was able to capture real savings of over $30,000 per month, after spending $20,000 to buy a complete solution from Memex.

Memex takes a pragmatic approach to accessing, analyzing and interpreting the information through its “roadmap to success” methodology. Magellan was able to improve its OEE from 36% to a sustained 85% after executing the corrective actions highlighted by MERLIN.

This article was first published in the Summer 2016 edition of Smart Manufacturing magazine.

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