A giant earth mover at a growing construction supply company in the Middle East rolled in on bald tires. The company replaced the tires for tens of thousands of dollars each. Two weeks later, that same earth mover returned, again with bald tires. How could this happen? Blame it on paper.
Paper? According to Rob Brice, founder and CTO of RFgen Software in El Dorado Hills, Calif., that construction company’s enterprise resource planning (ERP) system relied on paper records. Even though 14 employees spent all day, every day manually entering data, the system was two months behind. Because of the lag, company executives were making decisions on outdated data, leading to suboptimal decisions and opening the door for theft.
“They had to have massive amounts of inventory because they had so much shrinkage,” Brice said.
In some companies, even large, high-tech entities, paper is still king. Recently RFgen, a division of DataMax Software Group Inc., has worked with a global beverage company and a high-tech chip manufacturer, each with no barcoding.
RFgen’s 2022 Digital Inventory Report, which identifies trends on the use of digital tools in managing enterprise inventories, found that 22% of respondents had no automation at all. Of those surveyed, only 16% stated their company’s mobile automation systems are sufficient for their current needs.
“At the enterprise level, decision makers rarely receive real-time information, and siloed reporting leads to siloed decision making based on limited and old data,” said Lindsey Berckman, principal at Deloitte Consulting LLP and smart manufacturing leader in Deloitte’s industrial manufacturing sector. Meanwhile, the business units often rely on multiple manufacturing execution systems (MES) and ERP solutions, which leave business users to contend with a variety of localized reporting and dashboards.
“In that environment, data is often historically focused and segregated by department,” Berckman continued. “And at the factory floor level, the workforce struggles with an abundance of low-quality data generated across multiple systems, the outcome of which is that most workers rely on experience and historical reporting, rather than real-time insights grounded in high-quality data.”
To start well and succeed with digital transformation, look for a quick win, said Mike Lackey, global vice president for digital manufacturing at SAP Labs LLC.
“When I get asked, ‘How do I start this digital transformation?’ I tell people, ‘You have to start with a project that has high visibility and is easily quantifiable,” Lackey said. “Political collateral doesn’t last forever. Once you have buy-in from executives, you need to have your foot on the pedal with the next 20 projects in mind.”
According to John McEleney, a founder of Boston-based Onshape Inc., it’s important to start with naming systems and establishing processes so there is only one version of the truth. McEleney now serves as a corporate strategy advisor to PTC Inc., which acquired Onshape in 2019. As opposed to email notes, spreadsheets, and PDFs that have to be aggregated, in Onshape, there is only one version of the software and only one version of the data source, according to McEleney.
Another key early step is automating maintenance systems, said Rahul Garg, vice president of industrial machinery and small and mid-sized programs at Siemens Digital Industries Software. “Many companies are still trying to use Excel for that,” Garg said. “By taking advantage of proactive, AI-based systems, they can become more efficient in maintenance scheduling.”
Adding an MES allows companies to see the performance of their operations —including process lines, equipment, and operators—and eliminate bottlenecks to be more efficient and productive.
According to Berckman, key areas for manufacturing leaders to consider for automation include:
Drive connectivity. Perhaps the biggest challenge in a brownfield facility is connecting unconnected machines (some dating back several decades) with current technologies, which leads to data unavailability or incompatibility issues that hinder analysis. Even with newer equipment and technologies, the various connected devices and systems on the shop floor are difficult to network. It’s important to plan for seamless connectivity across systems, expect connection breaks, and deploy resolution to realize desired business outcomes.
Prioritize functionality and deployments. With so many technologies to choose from, such as the Industrial Internet of Things (IIoT), cloud and edge computing, AI, machine learning, and augmented and virtual reality (AR/VR), it’s important for leaders to understand what integrated solutions they deploy and where.
Deploy AI wherever possible across the value chain. Once data is at the appropriate level of maturity, develop a thorough assessment of how AI can drive value in brownfield scenarios—from fulfillment to planning, product design, production, and customer service.
Establish remote monitoring. The ability to remotely monitor the factory can play a key role in improving supply chain resilience in crisis situations by ensuring business continuity.
Ensure trust. Focus on data management issues and cyber risk management, whether retrofitting or building new systems, to ensure trust with customers, employees, suppliers, and other stakeholders.
Companies that provide software and other tools also must understand their customers’ pain points.
“Where is the facility underperforming and how can we immediately deliver new capability in the hands of the target end users? Do not implement smart factory technology for technology’s sake or make overly elegant solutions the workforce will have a hard time grasping,” Berckman cautioned. “Rather, create positive, value-adding impact with the implementation, building excitement and driving pull from the organization.”
One pain point is making brownfield equipment intelligent without replacing it.
Even if a company claims its equipment is updated, Lackey noted there could still be some outdated legacy systems. “I’ll walk through and the first piece of equipment I see is from 1972. All their equipment is not intelligent,” she added. “Their question: ‘Can we integrate to that equipment and get data that has the ability to affect quality, delivery, and efficiency?’ If their pain point is to go from an operational efficiency of 80% to 92%, I can come in with partners providing sensors and make that piece of equipment intelligent.”
Another common pain point is shrinking lead times. One customer described the requirements to deliver 50,000 stock items per month. Then, within eight weeks, the business evolved to delivering 40,000 custom items per month with a shorter lead time.
No matter the industry, a key goal is visibility, which leads to greater efficiency.
“If you go paperless, you have the analytics tools that give visibility and you’ll know how you’re doing in real time,” Lackey said. “If I can improve efficiency, I can take more orders. If I can produce 20,000 parts a month now, we can do 25,000, we can do 30,000. By having real-time process controls through these systems, we can drive down costs, drive out inefficiencies, and become more sustainable.”
For those manufacturers starting from scratch with automation, they’ll need to focus on a few core things, according to Brice. “If they really don’t have any automation, they’re going to need to look at the basics—labeling facilities and barcoding product so it can be tracked from the minute it comes in the door—creating a continuous inventory record,” Brice said. RFgen’s technology includes mobile barcoding. “Taking the paper out and getting full visibility into the system you’re using is going to give the biggest benefits in terms of inventory accuracy, pick efficiency, and labeling compliance.”
One fear preventing automation is that the process won’t go well, which, sadly, is often justified.
“You expect an automated system to be faster than doing it by hand on paper,” Brice noted. “We see a lot of failed systems.”
For example, one RFgen customer came to the company one year after buying another data collection system, which relied on webforms not designed for data collection, and the validation process took too long.
When an automated system takes too long, is too complicated, or otherwise challenging, users return to what they know best.
“Users put the RFID (radio-frequency identification) scanners down and went back to paper,” Brice said. The UI (user interface) looks nice but it takes six or more seconds per scan per prompt. If there are seven or eight sets of data you need to collect, you can have someone sitting there for 50 seconds to enter information they could have written down in six or seven seconds.”
But emerging technology is gradually dethroning paper in favor of digital transformation and more manufacturers are moving their ERP system out to devices and inventory. Key factors are business pressures and improving technology, such as automation that can work with and without an internet connection.
According to Brice, the best products employ an operating system similar to a cell phone. “More than two-thirds of people have a cell phone,” Brice said. “People expect to interact with that phone in certain ways. Antiquated systems that diverge from the ways people expect to interact with technology can lead to problems with user adoption and people end up circumventing the system.”
Oftentimes, companies invest in technology only when something happens to push them, according to Brice. He cites factors such as rising labor costs, margin pressure, a falloff in sales because of too many incorrect shipments, or that current processes aren’t scalable because of high growth.
When customers realize that return on investment for automation solutions can take a year or less, it makes the investment attractive. According to Brice, benefits include cutting shrinkage, reduction in inventory carrying costs, and reduction in storage costs. Automation can improve productivity by 30% or more, he said.
New tools also offer more flexibility, notably for companies that can’t rely on 24/7 Wi-Fi. Brice described three states of internet connectivity:
Online—Operators perform every task while online with a reliable internet connection. No problem.
Hybrid (or causally disconnected)—Tasks are usually performed online, but sometimes the internet connection is lost in the field, the yard, or in large operations. Operators need the ability to transfer data to their devices even when they’re offline.
Offline—Operators are typically working in an offline mode, perhaps in a medical setting. They want to be able to enter data while offline and then transmit data when they connect again.
“I had a customer that, because of the way their warehouse was designed and the types of products they carried, they had dead spots,” Brice said. “Operators would be scanning product and thinking they were connecting the data and they weren’t. (Disconnection time) was up to 30%.”
One data center customer in Indonesia remains offline 23 hours a day, then takes one hour to sync up with the parent company, according to Brice.
Another RFgen customer sells seasonal products and for half the year a Wi-Fi signal can easily reach the warehouse. But during the six months when the warehouse is packed to the rafters, a Wi-Fi signal can’t penetrate the density of the products. Brice said RFgen’s Mobile Utility Platform addresses these concerns.
“A well-designed solution can flip from local Wi-Fi to cellular,” he said. “You need to make sure that what you’re putting in place is going to provide that continuous digital record. You don’t want to implement a system where there are going to be gaps. A lot of times IT executives think they understand what the workload is in the warehouse: You receive inventory/a shipment, and put it away.
“But every single company does it a little different,” Brice added. “You want to make sure the solution you integrate has the ability to conform to your best practices. Otherwise, you’ll have to adjust your best practices to the solution and you’ll have implementation failure.”
Finally, late adopters can learn from the early adopters, Berckman said.
“Late adopters can take on tried-and-true approaches that capitalize on the lessons learned from the past few years, in both the robustness of platforms and the ability to augment with skilled talent,” Berckman continued. “Companies, including Deloitte, now offer things like select assets from an ecosystem of partners, and their own skilled workforce with global capacity.”
Deloitte starts with industry-leading manufacturing and supply chain experts to help manufacturers conduct in-depth diagnostic assessments that reveal challenge areas to inform the development of a high-ROI strategy and smart manufacturing roadmap, according to Berckman.
“With a clear plan and priorities, we turn to selecting the best tools to unify data across the plant network and then employ AI capabilities to make that data actionable,” Berckman said. “This provides a deeper understanding of a manufacturer’s machines, bottlenecks, constraints, and challenges—in real-time across the entire plant network, to become aware of hurdles to productivity as soon as, or even before, they emerge.”
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