Saving real Money: OT goes IT

In my article Measured Value of Digital Twins I summarized figures measured when applying digital twins in the shop floor by replacing tasks traditionally realized via PLC by means of modern IT.

After writing the article Get rid of PLCs in Production I thought it is maybe good, to add some concrete figures, means Euro or Dollar, to underline the business benefits of heading towards the factory of the future.

So let us look up some figures for a midsize car manufacturer:

• On average, the manufacturer pays 6 million Euro per year per plant for automation solutions (purchase, replacements, maintenance, changes etc.).
• At every line, you find PLC caring for steering the machines themselves and others for steering the process (sometimes you find a mix of responsibilities on one PLC, but this is neglected here). Depending on the field of application, you find a different percentage for the need of steering machines and/or the process. In Body in White you may only need 5 % for process steering, in more complex scenarios may 50 %. So, let's assume that on average, you need 30 % for process steering and 70 % for machine steering.
• Now let us assume, that you, in a first step, only want to replace those PLC, that steer the process (the 30 %).
• Additionally, let us assume steering the process via modern IT will cost 25 % less than steering the process via PLC.

Taking these figures, the conservatively estimated savings by replacing PLC through IT are on average:

• Process Steering only = 450.000 € per year per plant
• 100 % replacement = 1.500.000 € per year per plant

And keep in mind, a midsize car manufacturer has more than one plant.

Of course, one can find arguments why this not realistic. But I think, the need to be more flexible, to enter the next level of automation and to save money is motivation enough, to go for it.

Remark: To keep it simple, I here neglected the business benefits and cost-savings that a neutral IT-enabled shop floor dissolves the drawbacks of traditional solution approaches regarding the integration with modern technologies, scalability and modularity, realizing seamless data streams etc. (s. Get rid of PLCs in Production) and vendor lock-ins.

Just my 50 Cent.