Uncovering the Benefits of Industrial Ethernet

  • June 20, 2011
  • Feature
June 2011
By Nuris Ismail & Matthew Littlefield, Aberdeen Group
From February to April of 2011 Aberdeen surveyed over 150 executives about the current state of their manufacturing operations and industrial networks. This data revealed how Best-in-Class manufacturers are deploying industrial Ethernet across plants to improve network performance, operational performance, and corporate performance. In this article, we will explore how the industry leaders are taking advantage of industrial networking to enable real-time visibility into data to optimize production, maintenance, and safety. In particular, the article will explore the adoption rate of industrial Ethernet protocols versus Fieldbus and the advantages that companies achieve from the different network architectures.
Business Case
To start the analysis, an increasing number of manufacturing organizations are looking at industrial networking itself as a discipline. Many of these companies are bringing together both traditional automation engineering with corporate IT to gain a cross functional view of how industrial network performance can be improved.
Figure 1: Top External Business Pressures
Source: Aberdeen Group, April 2011
Definition of Industrial Networking
Industrial networking is the ability to perform networking functions in the industrial facility. Due to the real-time nature of manufacturing operations, it requires hardened infrastructure equipment that can handle severe environmental conditions (temperature, vibration, shock etc.), very predicable real-time data traffic performance, reliability and security. Network outages are intolerable. Any form of disruption is unacceptable, and can lead to waste or contamination of in-process materials.
From this data we can see that the top external pressure is consistent with almost every other manufacturing study Aberdeen conducts, the top pressure is to reduce operating costs. Many organizations are still feeling the pinch from the global recession and the fear of inflation in labor and raw material pricing has many firms looking for cost cutting anywhere they can in an already Lean environment.
There are also secondary pressures impacting the industry, especially around Environment, Health and Safety (EH&S). In this particular data set there are a relatively high percentage of process industry survey participants; so it isn't surprising that with the recent high profile events in off shore drilling, mining, and power production, that organizations fear another high profile adverse event in their facilities. As our analysis will show, new technologies and approaches in industrial networking and especially industrial Ethernet, can address these pressures.
Internally, there are also pressures driving the industrial network and we can see that those rising to the top are closely related to the top external pressure, reducing costs. To help companies reduce costs, organizations are looking for improved visibility into manufacturing operations as well as a reduction of disparate networks on the shop floor.
Figure 2: Top Internal Business Pressures
Source: Aberdeen Group, April 2011
In the next section, we will see how industrial Ethernet can address both of these challenges, improving operational visibility and reducing the cost and complexity of the plant network.
Defining the Best-in-Class
To identify how the most successful companies are implementing the latest industrial networking capabilities, Aberdeen used four Key Performance Indicators (KPI) criteria’s to distinguish the performance between the Best-in-Class (top 20% performers) from Industry Average and Laggard Organizations:
Table 1: Top Performers Earn Best-in-Class Status
Definition of Maturity Class
Mean Class Performance
Best-in-Class: Top 20%
of aggregate performance scorers
  • 99.97% Uptime (3 hours of downtime per year)
  • -5% Change in Total Cost of Ownership for the industrial network
  • 89% Overall Equipment Effectiveness (OEE)
  • +26.3% Operating Margin vs. Corporate Plan
Industry Average: Middle 50% of aggregate performance scorers
  • 99.78% Uptime (19.7 hours of downtime per year)
  • -2% Change in Total Cost of Ownership for the industrial network
  • 87% Overall Equipment Effectiveness (OEE)
  • +3.6% Operating Margin vs. Corporate Plan
Laggard: Bottom 30% of aggregate performance scorers
  • 99.14% Uptime (75.4 hours of downtime per year)
  • +4.5% Change in Total Cost of Ownership for the industrial network
  • 68% Overall Equipment Effectiveness (OEE)
  • -1.0% Operating Margin vs. Corporate Plan
Source: Aberdeen Group, September 2010
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 for the Industrial Network: Percent change in total cost of ownership (i.e., including software, hardware, integration, support, services, training, administrative staff, etc.) to manage the industrial network over the last 12 months
Best-in-Class companies are able to directly impact productivity by optimizing their industrial network with only 3 hours of downtime per year, as compared to the Laggards who experience on average, 75 hours of downtime per year). At the same time, they are able to reduce their total cost of ownership by 5%, improve manufacturing operations with a 89% OEE rate and over achieve their operating margins by 26%. In short, Best-in-Class companies are able to optimize their industrial networks and as a result, are able to gain a competitive edge by achieving higher operational efficiencies and corporate performance.
Best-in-Class Strategies
There were two strategic actions that Best-in-Class organizations were more likely to take than others, both of which were focused on improving performance of the network and are highlighted in Figure 3.
The top strategy is deploying industrial Ethernet as the business need justifies. This means that companies are looking at more than just the TCO of the network and how industrial Ethernet can help improve this through reduced hardware costs and improved access to more prevalent skill sets, like IT employees with a good understanding of standardized and unmodified TCP/IP and the OSI reference model. The additional ways that business cases can be justified include:
  • the ability to better integrate plant and corporate networks to provide real time visibility into manufacturing operations
  • the ability to run multiple disciplines (such as process, motion, safety) of control on a single network
  • reduced risk of security threats on the industrial network
  • the ability to quickly and easily deploy network management capabilities
The other strategy more likely to be taken by the Best-in-Class is focused on improving visibility into the industrial network. By improving visibility into the industrial network through the use of industrial Ethernet, organizations are able to more easily discover assets on the network, assess the health of the assets, and identify where gaps may be in performance. It also allows for an improved design that can help reduce overall network costs.
Figure 3: Strategic Actions
Source: Aberdeen Group, April 2011
Industrial Network Architecture
The key to successfully deploy industrial Ethernet is to first have the right industrial network architecture. Industrial networks are designed to work in extreme temperatures, vibration and shock. Industrial networks differ from traditional networks in their need for determinism, reliability, and speed in the transmission of data. Therefore, industrial networks need to be designed and implemented with these differences in mind.
Within our survey, respondents were asked what kind of network architecture they had on their plant floor (Figure 4 and side bar): 
Figure 4: Industrial Network Architecture
Source: Aberdeen Group, April 2011
Definitions for Network Architecture
  • Fully industrial Ethernet architecture, which means that these companies use entirely Industrial Ethernet for communication between industrial control system components
  • Mixed-mode architecture of Fieldbus and industrial Ethernet for communication between industrial control system components, where the number of nodes of Fieldbuses has been minimized for optimal performance
  • Mixed-mode architecture of Fieldbus and industrial Ethernet for communication between industrial control system components, where there is no strategy to minimize the number of nodes for Fieldbuses
  • Mixed-mode architecture of Fieldbus and industrial Ethernet for communication between industrial control system components, where industrial Ethernet and Fieldbuses are not connected
It is apparent when it comes to the different kinds of network architectures; there is a mixed bag as to the kind of network architectures manufacturers are more likely to implement. In general, a large portion of manufacturers have a mix of industrial Ethernet and Fieldbus products on their plant network. This can be explained by the fact that historically, the mission-critical nature of plant and factory-level system infrastructures warranted physical and technological isolation from other technology systems in manufacturing and the enterprise. This has resulted in a large installed base of real-time plant and shop floor systems that remain disconnected from the enterprise and each other. With the introduction of industrial Ethernet, this has changed this disparate nature of networks. The Best-in-Class have taken advantage of this and are more likely than their competitors to implement a fully industrial Ethernet architecture (with a 43% adoption rate). In addition, if they were to have an industrial network with both Fieldbuses and industrial Ethernet, they were more likely to have a strategy to minimize the number of Fiedlbus nodes for optimal use. This connectivity enables real-time visibility to critical information and enables collaboration across the value chain. This helps to assure consistent quality and performance across global operations, and reduce the cost of design, deployment, and support of distributed manufacturing and IT systems.
In conclusion, much of the above analysis is just a long winded version of the two pronged approach many leading organizations are taking around industrial Ethernet. On the one side, organizations are adopting industrial Ethernet to gain better real time visibility into operational performance and integrate plant and corporate networks. On the other side of the equations, organizations are adopting industrial Ethernet to reduce the TCO of the industrial network and gain improved real time visibility into network performance. If approached properly, the use of industrial Ethernet as the backbone of an organizations industrial network can deliver significant benefits and address pain points in multiple ways at once.
To gain better understanding into how organizations are successfully implementing industrial Ethernet and gaining the tangible benefits achieved by Best-in-Class companies, read Aberdeen’s latest research, Industrial Networking: Building the Business Case for Industrial Ethernet.
Nuris Ismail, Senior Research Associate, Aberdeen Group (nuris.ismail@aberdeen.com)
Matthew Littlefield, Senior Research Analyst, Aberdeen Group (matthew.littlefield@aberdeen.com)


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