Software Update: The Value of Virtual Plant Monitoring

Manufacturing Engineering: What can a plant-floor monitoring system do for shops today?

Dave McPhail: The achievable goal is real-time situational awareness and complete visibility of operations, or connected manufacturing. The vast majority of manufacturers today do not measure the results of their shop-floor operational efforts in real time. With a disconnected manufacturing model, they have little or no real-time data to drive excellence and profitability.

ME: Why don’t more manufacturers use monitoring?

McPhail: As with anything new that challenges the present status quo, adoption rates are contingent on manufacturers sharing their successes with others. Most manufacturers purchase and adopt new equipment and processes by identifying and benchmarking their performance against that of their peers.

As the results of our early adopters are validated and shared, we are seeing the market open up dramatically. At last September’s IMTS show, our booth was booking a new lead every two-and-a-half minutes and we are now scaling up all areas of our company to meet demand.

ME: How much does it cost to start a shop-floor monitoring program?

McPhail: The cost depends on the method of connection required to access the data generated by the shop-floor-resident manufacturing equipment. For new equipment capable of talking intelligently via Ethernet and using an electronic protocol such as MTConnect or OPC, the cost is $2750-$3500 per monitored asset installed. If the equipment is considered legacy and a hardware adapter is required, the cost is closer to $5000-$5500 per monitored asset installed.

To make an informed cost decision, manufacturers need to understand the value created by effectively monitoring their shop-floor assets. Memex Automation customers typically experience IRR [internal rate of return] greater than 400%, which means that the average payback is measured in mere months.

Using Memex’s MERLIN Operator Portal, operators are empowered with tools needed to quickly solve problems, boosting shop-floor productivity.

ME: What new monitoring tools from Memex Automation can help shops today?

McPhail: We call our award-winning technology MERLIN, an acronym for Manufacturing Execution Real-time Lean Information Network. Our solution includes both connection hardware, if required, and visualization software that, for the first time, allows manufacturers to really see exactly what transpires on their shop floors, in real time, by the second.

MERLIN enables the synthesis and contextualization of three data sources. The first data source is the shop-floor equipment that produces the product. This could be any piece of resident shop-floor manufacturing equipment, such as CNC machines, punch presses, saws, injection-molding machines, packaging equipment, robots, and PLC-controlled equipment. It could also be a “virtual machine,” where the process is completely manual, such as assembly or packaging.

The second data source is the shop-floor personnel that operate the equipment, and perform related tasks. Our MERLIN Operator Portal (MOP) supports a new paradigm in manufacturing where the equipment operator is as valued as an intrinsic resource. Our customers have proven that if the operator is empowered and given the tools to assist in solving problems as they arise on the manufacturing floor, productivity dramatically improves.

The third data source is ERP/MRP. In most manufacturing shops, these complex systems are not directly tied to what is happening on the shop floor. They hold vast amounts of data about sales orders, raw material availability, delivery dates, outsourced vendors/suppliers, costing, and scheduling. In a disconnected manufacturing model, the data that they are presently fed from the shop floor is manually entered, usually well after the fact, which hinders their ability to influence time-sensitive outcomes and make critical decisions.

A connected manufacturing model offers the ability to automatically drive and influence inventory, and procurement, based solely on what is happening in real-time on the shop floor. Another benefit is transparent scheduling visibility based on exactly what has been produced by the company’s manufacturing operations without the delay associated with manual data entry.

ME: What specific metrics are most critical for shops looking to improve productivity?

McPhail: The new buzzword in manufacturing today is OEE. OEE is a distillation of the six-sigma principles of waste, and is the product of three ratios. The first ratio is Availability, which is defined as actual run time/total time, including downtime. The second ratio is Quality, which is defined as good parts produced/total parts produced, including rejects/scrap. The third ratio is Performance, which is defined as actual part-to-part runtime collected/theoretical part-to-part runtime.

Availability is where most companies see the largest and quickest improvement for the effort expended. MERLIN measures nonproductive time into 20 downtime categories per machine. This allows continuous improvement personnel to rapidly determine root causes of equipment downtime and eliminate them by understanding exactly where to look, and exactly what to change to gain additional manufacturing capacity.

Quality and performance are also extremely helpful in improving a company’s overall OEE score. World-class OEE is 85%, which is 95% in each of these categories multiplied by each other. It should be duly noted that the average manufacturing customer we engage with believes its OEE is approximately 65%, when the actual post-MERLIN-implementation initial benchmark is closer to 32%. Once the shock of that typical OEE gap is fully understood, within a few months a MERLIN customer’s OEE improves dramatically. We have several customers that have started at 32%, and attained world-class OEE of 85%.

ME: How can using financial OEE, which you described at MTConnect’s conference, help improve shops’ bottom line?

McPhail: Financial OEE, or F.OEE, leverages the power of real-time shop-floor data, and accurate costing data trapped in most manufacturers’ ERP/MRP systems. With F.OEE, Income From Operations [IFO], asset by asset, hour by hour, can for the first time be calculated, visualized and truly understood.

This allows manufacturers to manage their shop-floor operations with a new management tool that helps them understand their equipment’s contribution to their monthly income statement in real-time, not three weeks after month-end when it’s far too late to modify a manufacturing process. Think of F.OEE as a universal metric that is well understood by all—money!

New Releases

SigmaTek Systems LLC (Cincinnati), a developer of nesting software, has released its updated SigmaNest Version 10 for users of plasma, laser, punch, oxyfuel, waterjet, router, knife, tube/pipe and combination cutting machines.

The updated SigmaNest Version 10.2 software adds a Split Window for simultaneously viewing different areas of the workspace.

The updated SigmaNest software adds a number of new features and enhancements that make machine programming even more effective and easy. SigmaNest 10.2 offers a Split Window that allows simultaneously viewing different areas of the workspace. Users can also manually nest parts across the split windows and onto other sheets. This capability provides quick nesting of parts onto multiple sheets. The new software adds several other enhancements including laser destruct; center of gravity tabbing; a quick search parts, sheets, and work order list; horizontal line cropping; and punching enhancements.

CADENAS Part Solutions LLC (Cincinnati) on Dec. 5 released the new parts4cad app for users of the cloud-based design and planning tool Autodesk Fusion 360. The app, created by software developer CADENAS GmbH (Augsburg, Germany), gives engineers access to millions of 3D CAD models from more than 400 certified manufacturer catalogs. The desired components can be configured individually and afterwards integrated directly into existing designs in Autodesk Fusion 360, a solution for 3D modeling that is used by designers and engineers to collaborate on product creations. The cloud-based technology in Fusion 360 allows users to access designs at any time and any location with any mobile device and Internet browser. The part4cad app is available for download for $7.99 from the Autodesk Exchange Apps store. For more information, see


ERP developer Epicor Software Corp. (Austin, TX) announced Jan. 5 that it has completed its acquisition of privately held ShopVisible LLC (Atlanta), a cloud-based retail order-management and digital commerce solutions. No financial terms were disclosed.

The acquisition, announced Dec. 11, 2014, expands Epicor’s position as a leading provider of extended omni-channel solutions for midsize and large retail chains. ShopVisible customers include global and domestic retailers and manufacturers such as 3M, Liberty Hardware, Tempur-Pedic, Bluemercury, Hue, Atwoods, and Plow & Hearth.

ShopVisible’s multitenant Software-as-a-Service (SaaS) software will complement Epicor’s offerings in retail transaction, enterprise and analytics systems, and the acquisition will become part of the Epicor Retail suite of solutions. Software Update is edited by Senior Editor Patrick Waurzyniak; e-mail

This article was first published in the February 2015 edition of Manufacturing Engineering magazine.

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