A significant number of manufacturing plants are more than 20 years old, with legacy automation systems reaching predicted end-of-life.
Are you one of those plants?
If you are, then it’s time to consider how your organization will address obsolescence risk and meet the increasing demands of the one billion* new middle class consumers who will add $8 trillion to consumer spending by 2020.
In those conversations, if you’re using the terms “upgrade” and “modernize” interchangeably, we should talk about the differences: because knowing what you need, and when you need it, might make the difference between meeting your productivity goals or experiencing prolonged downtime.
If you’re contemplating whether to upgrade or modernize, ask:
Because it’s a larger (and often longer-term investment) you might meet some resistance to the costs of modernization. And you’re not alone. Those who manage the numbers can fall on the side of upgrading because they have not quantified the benefits of modernization.
There’s a three-step strategy for determining what’s right for your operations that also helps you justify the investment:
In fact, benchmark studies show benefits up to 30 percent reduced cost and shorter project execution time when a FEED study is performed. If capital investments budgets are limited, a FEED can be used to plan your modernization project into phases to reduce initial cash flow, maximize productivity and minimize risk.
Kraft Heinz is a great example of a company that used productivity improvements to justify the price tag of modernizing an aging control infrastructure. Using model predictive control they expected to increase yield/capacity by 5% and instead doubled that number to 10%.
Look at the outcomes you want to achieve and work backward. Are you trying to accelerate productivity and efficiency? Do your legacy systems have the precautions in place to protect intellectual property? And if they don’t, what’s the risk? What is the true cost of downtime?
Based on your current state, upgrading might be the answer. For others, modernization is the better long-term investment.
*According to McKinsey.