One of the misconceptions about the manufacturing industry is that it is reticent to adopt new technologies. This can be true for some companies as they consider the costs of upgrading legacy hardware and software, including aging operational technology (OT). But forward-thinking manufacturers understand that the costs of falling behind the Fourth Industrial Revolution (Industry 4.0) and failing to execute digital transformation in today’s economic environment can have crippling, long-term impacts to a company’s future competitiveness and viability.
The effects of the global pandemic, labor shortages and uncertain political situations around the world in recent years have underscored the need for manufacturers to be agile, resilient and able to adjust to changing circumstances. Fortunately, the technologies and the means for making the transition are available.
With Industry 4.0, new technologies—ranging from artificial intelligence (AI) and virtual reality (VR) to advanced robotics and the Internet of Things (IoT)—can now integrate digital elements into manufacturing processes, increasing automation, communication and overall output.
Embarking on a digital transformation can be a daunting undertaking, but the benefits of a successful transition can significantly outweigh the costs involved and companies must act quickly.
When it comes to improving efficiencies, legacy factories have several built-in hurdles working against employees and organizations, including:
Lack of real-time visibility of production performance - Legacy systems can be siloed and disconnected, leading to manual processes for tracking production that are slow and inefficient. Ultimately, this results in inflated costs.
Inaccurate data - In addition to being anything but real time, manual tracking—which is often paper based—is prone to redundant data entry, human error and obsolescence by the time it reaches its destination, rendering the data unactionable.
High waste and inefficiency - The challenges created by manual systems will likely increase production costs. Out-of-date and inaccurate data can result in managers missing the cause of a problem until it’s too late to correct, leading to greater disruptions, downtime and other operational inefficiencies.
Manufacturers can solve these problems by making digital improvements that increase visibility and efficiency, shepherding factories into the next era of manufacturing. Key areas to address include:
Automation - More than simply handing over basic, repetitive processes to machines, advanced and collaborative robotics add flexibility while eliminating the need to invest significant capital or time in overhauling or redesigning processes. They allow manufacturers to adapt quickly to changing market needs while creating safer, more accessible workplaces for workers of different abilities.
Connectivity - Digitally connecting equipment, machines, and computer-based systems enable communication and data exchange across an organization’s assets. It adds real-time visibility while increasing the ability to collect and consolidate data from different sources, improving daily analytics and actionable insights that affect a company’s bottom line.
Intelligence - Processing and analyzing consolidated data leads to consistent reports and intelligent, predictive simulation scenarios that support better decision making and identifies areas for improvement.
Processes and teamwork - Along with digital transformation technology, it’s critical that organizations incorporate a cultural change in their thinking. An agile mindset (being willing to try, fail and try again), a Kaizen mindset (learning and adapting as part of a methodology of continuous improvement) and collaboration with suppliers and cross-functional teams are equally essential to a digital transformation.
An example of how a digital transformation is implemented, and the effect it can have, can be seen in what Flex did over several years at its plant at Sorocaba in the State of São Paulo, Brazil. The World Economic Forum (WEF) recently designated Flex Sorocaba a Sustainability Lighthouse in Brazil for their development of a holistic circular economy ecosystem that leverages Industry 4.0 technologies.
Ultimately, the Sorocaba transformation resulted in a $5 million reduction in material loss, a $1 million reduction in the need for spare parts and a 90% overall increase in operational efficiency. Certain stations within the plant even reaped a 36% increase in productivity. In addition, the improved transparency and increased quality resulted in close to a 20% increase in customer satisfaction.
Those improvements resulted from a rigorous process of deploying Industry 4.0 initiatives along the end-to-end value chain, focusing on both processes and people. The Sorocaba site transformation deeply embedded sustainability into its operations while implementing digital health and safety measures emphasizing worker engagement, upskilling and well-being.
Specific steps, and their results, include:
An Industrial Internet of Things (IIoT) performance management system connected 44 production lines, providing real-time data and transparency. The solution resulted in an 81% reduction in material loss and a 23% increase in overall equipment effectiveness.
A circular economy ecosystem, including reverse logistics of electronic waste that uses IoT and cloud for real-time tracking. The move resulted in a 94% reduction in material waste and a 38% reduction in plastic material costs. The reduction in resource usage at the plant is equivalent to 44,000 carbon credits, as accredited by the Canadian Standards Association.
An end-to-end ergonomics digital thread that included real-time monitoring of operators and alerted them when a job rotation or workstation ergonomics improvement needed to be made.
Low-code and no-code digital tools and robotic process automation (RPA) solutions that eliminated repetitive tasks for humans, reducing the non-value-added work they performed by 38%. The upskilling program for more than 200 employees also increased employee and customer satisfaction.
An advanced real-time supply chain solution that accelerated product flow, creating on-demand transparency and enabling supply chain resiliency.
The Flex Sorocaba site proves it’s possible to dispel the outdated perception that manufacturers are hesitant to digitally transform operations. It also spotlights that the process will not happen overnight. However, when manufacturing organizations take a thoughtful approach to solving challenges with advanced technology, the impact across its people, operations and workflows are significant.
As Francisco Betti, head of shaping the future of AM and value chains at the WEF, said, “the future belongs to those companies willing to embrace disruption and capture new opportunities. The lighthouses are illuminating the future of manufacturing and the future of the industry.”
While legacy systems may have worked well for decades, they now threaten to leave manufacturers in the dark ages. In today’s digital world, agility and resiliency are essential to an organization’s success. A digital transformation is the key to improving efficiency, enabling innovation and staying competitive. The time to transform is now.
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