Project Overview
1) Industry Background & Drivers
The automotive sector is in a sustained transition toward Industry 4.0: connected machines
(IoT), advanced analytics/AI, and end-to-end digital supply chains. Competitive pressures
(shorter model cycles, variant complexity, price sensitivity), quality expectations (zero-defect
culture), and macro-supply volatility are pushing manufacturers to move from reactive to
predictive operations. Smart factories that integrate OT (shop-floor equipment) with IT
(MES/ERP/PLM/QMS) are now the baseline for cost leadership, resilient operations, and faster
time-to-market.
Key structural pressures this program addresses:
Unplanned downtime and rising maintenance costs on aging assets.
Quality drift due to late detection and limited process visibility.
Siloed data across PLC/SCADA, MES, CMMS/EAM, and ERP.
Opaque supply networks (long lead times, bullwhip effects, expedites).
Skills gap: need for upskilling to operate data-driven workflows.
2) Case for Change (Why Transformation Is Needed)
Problem statement: The current factory runs with limited real-time visibility, a predominantly
reactive maintenance model, manual reporting, and fragmented supply-chain signals,
causing lost throughput, higher cost per unit, and variable quality.
Change hypothesis: If we instrument assets with IoT, apply predictive AI, centralize analytics,
and integrate supplier signals, we will reduce downtime, stabilize quality, optimize inventory,
and improve OEE—delivering positive ROI within two years of completion.
3) Current Situation (As-Is) – to be validated in Initiation
(Assumptions to be refined during site discovery; placeholders are provided to guide
measurement design.)
Assets/lines: Mixed-vintage equipment (PLC/SCADA connected), partial MES coverage;
CMMS/EAM in use but not fed by condition data.
OEE: ~60–65% average (baseline to confirm). Primary OEE losses: availability
(unplanned stops), performance (micro-stops), and quality (rework).
Downtime: Unplanned downtime ~12–15% of available time; maintenance is time-based
or run-to-failure on several asset groups.
Quality: First-pass yield varies by line/shift; root causes often identified post-hoc.
Data & integration: Heterogeneous protocols (OPC-UA/Modbus), data islands; manual
Excel reporting in production reviews.
Supply chain: Supplier ETAs unreliable; safety stocks sized conservatively; limited OT-
to-ERP feedback loops.
People & process: High operational know-how; limited analytics capacity; basic change
governance in place.
To-Do in Phase 1: Confirm baselines (OEE, FPY, MTBF/MTTR, inventory turns, OTIF), map
integrations (PLC/SCADA → Edge → Data Lake → MES/ERP/CMMS), and finalize the value
levers by asset family.
4) Future State Vision (To-Be)
A connected, insight-driven factory with:
IoT-enabled assets streaming condition, process, and quality signals to an enterprise data
layer.
Predictive maintenance AI providing RUL (remaining useful life), anomaly alerts, and
automated CMMS work orders.
Central production analytics dashboards (role-based) for OEE, FPY, bottlenecks, and
energy; drill-downs to line/asset/shift.
Supply-chain “control tower” visibility: supplier confirmations, logistics tracking,
inventory optimization, exception alerts.
Standard work + skills uplift so operators and maintenance teams act on data, not
intuition alone.
5) Scope Definition
5.1 In Scope
Production lines & critical assets: Sensors (vibration, temperature, current, pressure,
vision) and edge gateways.
Data platform: Edge processing, secure data ingest, time-series storage, semantic
models for equipment and processes.
AI & analytics: Predictive maintenance models, SPC/quality analytics, OEE and
throughput dashboards.
Supply chain monitoring: Supplier/API/EDI integrations, inventory optimization,
logistics visibility, exceptions.
Security & governance: Network segmentation, identity and access, audit logging, data
retention, compliance.
Training & change: Role-based training, SOP updates, adoption tracking.
5.2 Out of Scope (for this program)
HR systems, CRM, front-office customer apps.
Full ERP replacement (only integrations and data exchanges).
New robotics/automation hardware (beyond necessary IoT instrumentation).
Plant civil works or major facility layout changes.
5.3 Interfaces (must be coordinated)
OT: PLC/SCADA/DCS, machine controllers, historians.
IT: MES, ERP (orders, inventory, finance), CMMS/EAM, QMS/LIMS, PLM.
External: Supplier EDI/API, carriers/3PL tracking, regulatory reporting.
6) Objectives & Success Metrics (SMART)
(Targets align with the business case and will be baselined in Phase 1.)
Objective KPI Baseline Target Timeframe Data Source /
(TBC) Owner
Reduce % availability / ~12–15% −30% Within 6 OEE system,
unplanned Unplanned months of Maintenance
downtime downtime Phase 3 go- Lead
live
Improve OEE ~60–65% +25% 6–12 months OEE
factory post-go-live dashboard,
efficiency Production
Mgr
Lower Maintenance TBC −20% 12 months Finance +
maintenance cost per unit CMMS,
cost Maint. Lead
Stabilize First-Pass TBC +10% 6 months QMS/MES,
quality Yield (FPY) Quality Lead
Optimize Inventory turns TBC +15% 6 months of ERP/S&OP,
inventory Phase 4 Supply Chain
Lead
Improve Supplier OTIF TBC +10% 3–6 months Supplier
delivery of Phase 4 portal, SC
Lead
Speed of Data latency to Minutes/hours <30s By Phase 3 Data platform,
insight dashboard refresh IT Lead
User adoption Active users 0 ≥95% 3 months Training/IT,
using new adoption post-go-live Change Lead
tools
Benefits realization: staged—early gains in Phase 2 (visibility), material impact in Phase 3 (AI),
network benefits in Phase 4 (supply chain).
7) Constraints, Assumptions & Principles
Constraints
Timeline: 18 months total, staged delivery with board gates.
Budget: $2.8M total (hardware/software/services/change).
Operations: Limited downtime windows; hot-swap/parallel runs required.
Compliance: ISO 9001/IATF 16949 for quality; data protection obligations.
Assumptions
Existing MES/ERP/CMMS will remain; we will integrate, not replace.
Network upgrades and secure segmentation are feasible within Phase 2.
Supplier partners can provide API/EDI or portal access in Phase 4.
Sufficient historical maintenance and process data exist for model bootstrapping (or a
warm-up period will be planned).
Design Principles
Product-centric: Clear acceptance criteria and definition of done for each deliverable.
Security-by-design: Segmented OT networks, least-privilege access, encrypted
transport/storage.
Scalable & vendor-agnostic: OPC-UA/REST/SQL standards; avoid lock-in.
Human-in-the-loop: Recommendations with explainability; codified escalation paths.
8) Dependencies & Integration Map
Area Dependency Why It Matters Owner
OT connectivity PLC/SCADA access, Real-time signals for Tech Lead (OT)
protocol gateways IoT/AI
Data platform Edge → Cloud/on-prem Low latency + historical IT/Data Lead
data lake storage
MES/ERP Orders, inventory, BOMs, Context for analytics; IT Apps Lead
costs value tracking
CMMS/EAM WO automation, feedback Close the predictive Maintenance
loop loop Lead
QMS Specs, test plans, defects Quality analytics & Quality Lead
SPC
Suppliers/Logistics EDI/API, GPS/ASN Control-tower visibility Supply Chain
Lead
9) Strategic Alignment
This program directly supports corporate priorities:
Cost leadership & throughput: OEE ↑, downtime ↓, scrap/rework ↓.
Quality & brand: earlier detection, FPY ↑, customer complaints ↓.
Resilience: supply visibility, fewer expedites, better S&OP adherence.
People & capability: upskilling to data-driven, standardized work.
Sustainability (enabler): energy/idle time insights (optional KPI add-on).
10) Value Realization Path (High-Level)
Phase 2 (Months 4–9): Visibility benefits—fewer surprises, faster reaction; early
maintenance wins on critical assets.
Phase 3 (Months 10–15): Predictive benefits—meaningful reductions in breakdowns;
OEE and FPY uplift; automated insights.
Phase 4 (Months 16–18): Network benefits—inventory and logistics optimization; OTIF
improvement and working-capital gains.
11) Initial Risks (Overview)
Data quality/coverage risk → mitigate with sensor QA, golden tags, and data validation
gates.
Adoption risk → robust training, champions on each shift, usage KPIs.
Integration complexity → phased integrations, interface contracts, sandbox testing.
Cybersecurity → segmented networks, hardening, continuous monitoring.
Vendor delays → dual-source critical items, buffer in lead times.
12) Governance Snapshot (How It Connects to PRINCE2)
Project Board (Executive, Senior User, Senior Supplier) approves each stage.
Manage by Exception with tolerances (±10% cost, ±1 week time).
Product-based planning: IoT infra, AI tool, dashboards, supply-chain system.
Agile sprints under Controlling a Stage for iterative delivery and demos.
Highlight reports weekly; stage boundary reviews at the end of each phase.
