Data-Driven. Automated. Human. Welcome To The Factories Of The Future.
As more consumers continue to buy products online, supply chain, material handling, and distribution centers faced unprecedented challenges in meeting the increased demand. But companies that could quickly adopt new technology to meet labor and supply shortages thrived. This article from Forbes explores how these challenges prompted a greater push within factories toward a more automated, digital future.
The manufacturing industry has been discussing factories of the future for a long time. But in most cases, talk has yet to turn into action. So far, just 44 manufacturers worldwide have made it onto the World Economic Forum’s (WEF) Global Lighthouse Network – a group of companies recognized as using advanced technologies to truly transform their factories, value chains and business models.
Even taking into account the extraordinary disruption caused by COVID-19, that number should be much higher. Indeed, manufacturers need only look at the success of one of these lighthouse firms, Procter & Gamble (P&G), to see the potential benefits on offer. By taking a smarter, more integrated approach to its factory operations, P&G has significantly improved supply chain performance, while also achieving higher levels of manufacturing reliability.
Yet despite these compelling financial and operational incentives, many companies still find themselves in what the WEF describes as “pilot purgatory”: a never-ending proof of concepting loop in which new solutions are tested in silos but never get deployed at scale.
Step change not incremental change
But why? What’s holding companies back from making their shop floor (and their business) more efficient, productive and resilient? Not just by creating smart factories in which certain processes and workflows are enhanced by technology, but by taking a more systemic approach and rolling out the fully digitized, automated, data-driven factories of the future.
In the majority of cases, the answer is cost. Or put another way: the belief it will require huge capital expenditure on new plant facilities and equipment. This is a misnomer. In fact, turning an existing plant into a factory of the future is not about overhauling its physical ecosystem. Rather, it’s about establishing the right digital infrastructure across the entire facility and increasing the capabilities of the onsite workforce.
The key word here though is “entire.” Yes, it’s possible for manufacturers to achieve the necessary transformation in a fixed environment, but not if they approach it piecemeal or with individual products and functions. For true change to happen, it must be integrated and pervasive. Manufacturers need step change, not incremental change.
This, though, is a reason for optimism not trepidation. Rather than invest in sweeping, resource-intensive alterations to their facilities and equipment, companies can focus on the true enablers of their factories of the future journey: digital transformation and worker augmentation.
Digitizing the future
In the case of the former, the place to start is with their IoT architecture. By establishing a cloud-based environment that captures and collates insights from across the whole plant, including product life cycle data and ERP information, companies can gain far greater factory visibility. This leads to a more accurate, up-to-date and holistic understanding of what’s happening on the shop floor, in turn allowing for smarter data analysis and more integrated decision-making. It can also form the basis of advanced scenario planning tools, such as digital twins.
Once this digital infrastructure is in place, it opens the door to various other ways to drive performance improvements at scale. For example, it allows manufacturers to optimize material flow throughout the facility, identifying areas in which technologies like automated guided vehicles and autonomous mobile robots can increase efficiency and boost through-put.
They can also take steps to integrate quality management into the manufacturing process rather than treat it as a silo function bolted on at the end. This more intelligent approach allows quality control measures to happen in real-time throughout a product’s life cycle and means any issues can be identified and corrected promptly and effectively.
Similarly, a more centralized, data-driven operating model makes it easier for manufacturers to proactively monitor the condition and performance of their equipment. This enables them to perform predictive maintenance and repair, cutting unplanned downtime, reducing costs and increasing productivity.
Rise of the humans
As for the more human element of this journey, the key is for manufacturers to think in terms of augmenting workers on the shop floor, not replacing them. That means using new digital solutions that empower employees to increase their own efficiency and productivity, ultimately delivering greater success for the plant as a whole.
Examples include handheld devices for greater process visualization, as well as augmented reality and machine learning tools. It’s also vital to communicate the benefits of the transformation to staff at all levels. That way, companies can ensure their people buy into the changes being made, viewing them as positive progress rather than a threat to their jobs.
Out of pilot mode
Over the last few months, the coronavirus crisis has viscerally exposed the fragility and rigidity of many companies’ current operating model. Yet, even so, less than 10% are taking steps to build a truly technology-enabled shop floor that will be more resilient and agile when other disruptions arrive in the future. It also means more than 90% risk missing out on the significant performance and productivity opportunities on offer.
As industry rebuilds from one of the most challenging periods in its history, now is the moment for the talking to stop. When it comes to creating the factories of the future, it’s time for manufacturers to get out of pilot mode and deliver real change at scale.
The views reflected in this article are those of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.