Industrial Ethernet Gaining Ground in Manufacturing |

Industrial Ethernet Gaining Ground in Manufacturing

October 222012
Industrial Ethernet Gaining Ground in Manufacturing
October 2012
By Nuris Ismail and Reid Paquin, Aberdeen Group
Manufacturing is an industry with complex operations, where the success of any organization lies in producing the right products, at the right time, with higher quality, and lower costs than the competition. This requires companies to enable real-time visibility into operations at the plant floor as well as at the executive level to make intelligent decisions. This research will explore how industry leaders are taking advantage of industrial networking to enable real-time visibility into data to optimize production, maintenance, and safety. In particular, the research will explore the adoption rate of industrial Ethernet protocols versus Fieldbus and the advantages that companies achieve from the different network architectures.
Manufacturers are feeling a varied set of internal pressures centered on cost, network maintenance, and network security (Figure 1).
Figure 1: Internal Pressures Driving Organizations to Focus on Industrial Networking
Source: Aberdeen Group, August 2012
Definition for the Key Performance Indicators
  • Overall Equipment Effectiveness (OEE): Composite Metric accounting for availability, performance and quality
  • Operating Margin: Defined as the difference between the actual operating margin and budgeted operating margin
  • Industrial Network Uptime: Estimated uptime of industrial network per year
  • Change in total cost of ownership (TCO) for the industrial network: Percent change in total cost of ownership (i.e., including software, hardware, etc.) to manage the industrial network over the last 12 months
The lack of visibility into manufacturers continues to be a top pressure, however, compared to last year it has dropped significantly. This can be explained by the fact that manufacturers are feeling secondary pressures that are of more importance. For example, manufacturers are more pressured to figure out ways to consolidate their disparate networks. As it stands, many manufacturers are managing multiple networks, which means having multiple skill sets and software that do the same thing. Having many systems is an even bigger issue and means that there is extra work needed to aggregate, move, and analyze all the information. In a cost conscious environment, manufacturers are seeking to continuously improve efficiency and drive down costs for existing facilities and processes.
Aberdeen used four key performance criteria to distinguish the Best-in-Class from Industry Average and Laggards, where the Best-in-Class are the top 20% of performers, Industry Average are middle 50% of performers, and Laggards are the bottom 30% (Table 1). The Best-in-Class companies are able to directly impact the productivity of their network by optimizing their industrial network with an average of eight hours of network downtime per year as compared to Laggards, who experience 135 hours (roughly five days) of network downtime per year.
Table 1: Maturity Class Performance
Definition of Maturity Class
Mean Class Performance
Top 20%
of aggregate performance scorers
  • 8 hours of downtime per year (99.91% Uptime)
  • 11% reduction in TCO for the industrial network
  • 90% Overall Equipment Effectiveness (OEE)
  • +25% operating margin vs. corporate plan
Industry Average:
Middle 50%

of aggregate
performance scorers
  • 36 hours of downtime per year (99.58% Uptime)
  • 3% reduction in TCO for the industrial network
  • 80% Overall Equipment Effectiveness (OEE)
  • +11% operating margin vs. corporate plan
Bottom 30%

of aggregate performance scorers
  • 135 hours of downtime per year (98.45% Uptime)
  • 1.5% increase in TCO for the industrial network
  • 60% Overall Equipment Effectiveness (OEE)
  • +5% operating margin vs. corporate plan
Source: Aberdeen Group, August 2012
The Best-in-Class do this all while improving their manufacturing productivity with an OEE rate of 90% and overachieving their operating margin by 25%. At the same time, they are also able to reduce manufacturing operations costs by reducing the Total Cost of Ownership (TCO) by 11%.
Industrial Ethernet adoption growing for Best-in-Class
The network architecture is key to enabling manufacturers to gain real-time visibility into operations at the plant floor, as well as at the executive level.
Figure 2: Industrial Network Architecture
Source: Aberdeen Group, August 2012
When the network architecture isn't developed with both of these goals in mind, it leads to islands of disconnected networks from the field level, to the manufacturing operations level, to the enterprise level. In turn, this leads to many manufacturers having multiple networks at the same layer (with multiple skill sets and software) that do the same thing.
Definition for network architectures
  • Fully industrial Ethernet: which means that these companies use entirely industrial Ethernet for communication between industrial control system components
  • Mixed-mode, integrated, with minimized nodes for fieldbus: where the number of nodes of fieldbuses has been minimized for optimal performance
  • Mixed-mode, integrated, without minimized nodes for fieldbus: where there is no strategy to minimize the number of nodes for fieldbuses
  • Mixed-mode, not integrated: where industrial Ethernet and fieldbuses are not connecteds
As shown in Figure 2, manufacturers are implementing many different kinds of network architectures. Overall, the Best-in-Class companies are more likely than their competitors to have some form of industrial Ethernet in their manufacturing facilities. Where they are truly differentiating themselves is their ability to implement a fully industrial Ethernet network architecture (over twice as likely). In doing so, they have been able to consolidate all their disparate and isolated networks from the field level to the enterprise level. If they have a network architecture that contains both industrial Ethernet and fieldbuses, the Best-in-Class are more likely to ensure integration between both networks. Compared to last year's study, Industrial Networking: Building the Business Case for Industrial Ethernet, the adoption rate of implementing a fully industrial Ethernet architecture amongst the Best-in-Class has grown from 43% last year to 67% in 2012. This illustrates the increased adoption of Ethernet in the manufacturing realm - and we expect the adoption rate to only increase going forward. For manufacturers that have yet to adopt industrial Ethernet, they should start considering the benefits described above.
Network performance must be able to match the real-time nature of the plant floor, which can help manufactures gain critical insight into manufacturing performance. Indeed, navigating these many choices and alternatives in the context of a huge installed base of disparate and aging control systems is complex. Nevertheless, the opportunity exists now more than ever to overcome the historic isolation of the control platform from the enterprise. Moving forward, it is time for manufacturers to visualize the real-time enterprise and take steps to lay the real-time network foundation that they need to support it. To find out more about how the Best-in-Class are implementing a successful Industrial Networking architecture, read Aberdeen’s Industrial Networking: Real-time Foundation for Manufacturing and the Enterprise.
Nuris Ismail, Research Analyst, Aberdeen Group ([email protected])
Reid Paquin, Research Associate, Aberdeen Group ([email protected])


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