By applying cutting-edge technologies like digital twins, it’s possible for manufacturers to … [+]
If there’s one word ringing in the ears of most manufacturers right now, it’s resiliency. The extraordinary challenges of recent months have led many companies to reconsider their operating models – first in an effort to navigate the COVID-19 pandemic and, second, to ensure they’re better equipped to deal with any similar disruptions in future.
Yet while the nature of the problems caused by COVID-19 are largely unprecedented, this isn’t the first time the industry has experienced an event with potentially cataclysmic ramifications. As the chart below shows, the last 60 years have seen manufacturers contend with issues ranging from the Vietnam War and assassination of JFK, to the crippling aftershock of the 2008 financial crisis.
Understandably, then, many companies are now asking themselves ‘what’s next?’ and, more importantly, ‘how we can make sure our business is resilient and agile enough to ride out the storm when it arrives?’
Beyond the supply chain
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For the majority of them, the supply chain is the natural place to start. By applying cutting-edge technologies like digital twins, it’s possible for manufacturers to optimize the flow of goods and materials through their network, make smarter, more data-driven decisions and ensure they’re better prepared to expect the unexpected in future.
Yet, true resiliency reaches beyond the supply chain and onto the shop floor. Here, operational excellence is traditionally driven by manual processes: a world of paper, clipboards and meetings, not technological innovation and data analytics. This makes it near-impossible for manufacturers to gain a holistic view of what’s happening and means workflows tend to lack the consistency and depth of integration to adapt quickly when new challenges arise.
The result is that when fresh processes are introduced, they rarely drive real, lasting change. They could drive a short-term uptick in performance, maybe, but not a sustainable improvement in productivity and throughput.
That’s not to say manufacturing companies seeking greater resiliency need to abandon their past methods entirely. Rather, this is about building on the best practices of yesterday by combining them with the digital and automation capabilities of today.
So, whereas in the past, manufacturers may have used individual experts with specialist knowledge to troubleshoot problems and drive operational excellence, tomorrow’s shop floor will see all that expertise stored digitally and made available to everyone 24/7.
As for how to create these smart factories, there are three key steps on the journey.
1. Digitize the operating framework
The first is to take their existing framework for manufacturing excellence and capture it digitally. Doing so helps standardize shop floor operations, allowing workflow information to be communicated – and, crucially, adhered to – consistently across the whole workforce. As well as boosting overall plant performance, this helps increase companies’ resiliency when faced with situations like the COVID-19 pandemic as it means operatives can be quickly trained in different processes or machinery before stepping in to cover for colleagues who are off work.
2. Create digital applications
Having digitized their framework, manufacturers should then look to create digital applications that ensure any processes become completely ingrained in day-to-day operations. A great example is the transition from first shift to second. For many companies, this is still done via a face-to-face meeting between two managers during which they share important line updates and flag any problems that have arisen during the course of the previous shift. Yet because these meetings aren’t digitized, it’s easy for stuff to get forgotten or for patterns to go unnoticed. By automating the handover process, companies can ensure the right information is passed on and that any recurring issues are spotted and dealt with before they cause more significant disruption.
3. Incorporate emerging technology
Where digital technologies are currently being used on the shop floor, they tend to be focused on point solutions. Solving smaller-scale issues around a specific piece of machinery or training module is, of course, highly valuable and a core aspect of any smart factory. But it’s also just the tip of the iceberg. When it comes to addressing deeper, more systemic challenges, such as energy management and quality control, manufacturers can consider investing in more advanced AI and machine learning technologies. These allow them to gather, integrate and analyze data from across an entire plant’s – or plants’ – operations. They can then use that knowledge to take transformative action that optimizes performance.
The journey begins
There are a growing number of businesses already reaping the rewards of starting to create smart factories, especially in the food, automotive and pharmaceutical sectors.
A recent example is a global pharma company that needed to enhance both its manufacturing effectiveness and plant scheduling. Starting with a single plant, it went through the exact process of digitization described in steps one and two above. This has seen it improve changeovers by 30%, increase through-put by 32% and significantly reduce the number of manual interventions in its scheduling process. As well as rolling out the approach in additional plants, the company is now looking at how it can use emerging technologies to boost its quality management too.
These figures are by no means anomalous. By driving operating consistency and empowering employees with the tools to improve their work, companies that digitize their shop floor can reasonably expect to experience an OEE improvement of around 50-60%. In more resilient manufacturers, this could increase to 80% or more.
In other words, we’re now seeing sufficiently large and sustained success for firms to take this journey seriously. And while it can’t happen overnight, it’s possible for every manufacturer to get started today. Traditional operational excellence framework plus automation and digitization, that’s the formula for creating smart factories that deliver greater resiliency in an unpredictable future. None of us knows what’s coming next. But that doesn’t mean we can’t be ready.
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article.