The Future of Smart Manufacturing

The only thing permanent in this world is change and change is happening everywhere. There are changes in society, the environment, governments, business and in different manufacturing sectors around the world. Some traditional methods are being replaced by modern and more efficient methods that are a product of years of innovative testing.

10 years from now, the global manufacturing world will surely look nothing like it does today. The reason for this is technology. Advanced manufacturing technology is fast changing the global competitive landscape. The nations and companies that act now to take advantage of the promises will surely thrive in the many years to come. Those who are slow to act and fail to engage in these technological changes will surely be left behind.

Smart Manufacturing: Game Changer

Manufacturing is becoming more automated and IT-driven. Manufacturing has become “smart”. Every day technological advances in manufacturing make many factories and assembly plants smarter, safer and more environmentally sustainable. Many progressive businesses will invest strategically to transform their operations from cost manufacturing centres to smart profit centres that will dramatically increase ROI and sales.

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Thanks to innovation, it’s a tight race towards this new age of smart manufacturing. As the next generations of 21st century smart manufacturing begin, some emerging and developed nations have already made many steps to implement strong industrial policies that help in aligning with government, businesses and educational institutions to take notice and advantage of it. For example, the European Commission is investing nearly $2 billion for “Factories of the Future”. It’s a public and private partnership to develop the foundations for a smarter manufacturing sector in the European Union.

In today’s world of information, fast internet access and the Internet of Things (IoT), the historical and real-time data is present on many things that people take for granted. Smart concepts are present in airports, banks, government offices and other applications. Many still think that these smart concepts are a technological luxury, but the future will show that it’s an essential improvement to manufacturing capabilities and process performance.

Smart Manufacturing Defined

Smart manufacturing is defined as the integration of data process expertise that will enable proactive and intelligent manufacturing decisions in many dynamic environments. Smart manufacturing combines information, human ingenuity and technology in bringing about the vast revolution in the development and the application of manufacturing intelligence to every aspect of business. It will greatly change how products are manufactured, packed, shipped and sold. It will also enhance worker safety and protect the environment by making zero-emissions and zero-incident manufacturing environments. It will also help jobs by keeping manufacturers competing in the world market despite the higher cost of doing business in many first world countries.

During the 1980s and the 1990s, many manufacturers made steps in addressing high production costs by reducing factory wastes and enhancing their operations through “lean and green manufacturing” practices. The ongoing efforts, although effective, are lowering the incremental returns. Because of this, many businesses cannot prosper. Businesses should understand that innovation is the path to growth. Investing in a smart manufacturing infrastructure is essential in securing a company’s or a nation’s industrial future and the future economic well-being of the citizens. Product innovations will arise as a result of the creative use of smart manufacturing. Intelligence gathered from many points of the supply chain, from the consumer choices through production and delivery of products, will offer more insights to improve processes. The knowledge businesses gain through process innovations will go beyond the walls of manufacturing and into the service sector at every level, which will deliver better pricing because of enhanced process efficiency and economies of scale.

Smart manufacturing extends from product requirements and process design to execution, delivery and life-cycle support. Smart manufacturing includes 10 attributes:

  1. Intelligent actions and responses
  2. The operating assets are self-aware and integrated
  3. Can adapt to abnormal process situations
  4. Access data when and where and in the form needed
  5. Proactive failure prevention
  6. Rapid response for proactive control
  7. Environmentally sustainable
  8. Trained, knowledgeable and empowered staff
  9. Recognises the automation limits
  10. Drive strategic enterprise performance

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Smart Manufacturing

The idea of smart manufacturing is not new because there have been pocket successes in many industries. One of the most notable examples is in the electrical power distribution where the SmartGrid concept is changing into one effective strategy for electricity supply and demand. The challenge lies is how to apply the same concept for optimised production and the management of the whole manufacturing supply chain.

For the adoption of smart manufacturing and for it to be successful, 3 critical components should be present – innovative, reliable technology, the right people and a well-defined operating system.

1. Technology

Almost every present-day manufacturing facility has some level of process control and floor functionality that is implemented within the premises. The gaps in the present capability are not the result of a lack of measurement or control, but it relates to a limited understanding of the process history, the common definition and its interdependence. If there’s no way of correlating data and modelling performance, efforts to improve the overall process will not reach full potential. The integration of the existing instrumentation, the shop floor systems and process control are the key technology enablers in successfully implementing smart manufacturing.

The integration goes beyond the simple communication between the different devices and instead goes on a comprehensive enterprise and facility model. Now, this data model can store historical data like performance, documents, workload relationships and data correlations. It can also facilitate common information and information aggregation. The technology model can also be adapted to accommodate the location and enterprise information requirements. Technology can also be used in improving information usage through the use of wireless networks, visualisation tools and other portable devices. These solutions will ensure that the correct information is provided to the correct personnel at the right time.

2. People

Technology by itself will not be able to solve all the challenges of the manufacturer and issues surrounding the manufacturing process. As in any business and other industry sector, the success of manufacturing relies heavily on the right people. Through the years, there will changes in human resource requirements, but it is still fundamental that people are the drivers of success. It is still the human innovation and control that makes innovation and helps in making the next process step change even though automation, information technology and process control have helped in modernising and enhancing the manufacturing process. Many people think that innovation is only a breakthrough in technology, but most innovation truly consists of small process improvements when implemented properly, will be locked in for improved efficiency and quality.

Smart manufacturing also provides the users with a common tool set for a collective innovation. The manufacturing environment is designed to be used by users by the different levels of the organisation. This includes the operators, supervisors, department managers, process engineers and even upper or executive leadership. If a strong employee engagement is encouraged, there will surely be an increase in process innovation. Secondary people advantages can also be realised if smart manufacturing is implemented. Because there is a common and well-defined information environment, the business organisation will be more equipped to handle employee training and attrition. The environment will also push for stronger collaboration among different sites, specifically the locations that utilise similar process technologies.

Adopting smart manufacturing will also eliminate some of the non-value added jobs that are very prevalent today on the manufacturing floor. Much of the manual data entry and paper routing will be significantly reduced with a strong solution design, good vision and continuous improvement. This will allow the employees to focus more on their specified work and dedicate more time for the operations to be more productive and produce more valuable activities.

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3. Operating System

For the organisation to complete embrace the concept, manufacturing companies should initiate a change in mindset and recognise its value as a key enabler in expanding the plant capabilities through an effective operating system. One of the most known advantages of smart manufacturing is its ability to enhance the measurement system of the company. By having the real-time trends acquired online, process control systems and operators will have enhanced capability to make real-time critical decisions to better manage the manufacturing process. This optimised process will reduce the excursion numbers, enhance the operational efficiency and provide higher quality products. In any plant operating system, measurements and KPIs are some of the key components to have a successful operation.

Another result of smart manufacturing is the automated KPI calculation, root cause analysis and process reporting. For decades, much of the data is collected, calculated and reported manually. Although people are very capable of doing such jobs, it’s still prone to errors and are plagued with many inconsistencies. Plus, there’s also little or no ability to drill down the factors as a means of root cause analysis, which, in turn, results in time-consuming and expensive speculations by a one or a group of experts.

Having an efficient operating system can also adapt and transfer “best practices” and innovations all over the enterprise. Yes, it is very critical for employees from all levels to innovate and participate, but the organisation should recognise and approve best practice standards. After the standards have been adopted, it should be propagated all over the entire enterprise to leverage the benefits to all operating locations.

Transformation and Integration of Smart Manufacturing

It is worth considering the role of the system integrator and how the relationship with manufacturers can be affected when smart manufacturing is implemented.

First, you need to consider is if there is a clear trend across different industries that involves unlearning the concept of value associated with the possession to the value of use. This is just like what’s happening in the software industry as it is moved to different “as-a-service” offerings. Moving to an industrial software-as-a-service will impact manufacturing software like manufacturing execution systems, quality applications and laboratory information as compared to traditional automation technologies like programmable logic controllers, data acquisition systems and supervisory controls.

Another essential aspect of smart manufacturing that impacts the system integrator/manufacturer relationship is how the manufacturers view these integration initiatives as being transformational to their business organisation. At present, professional systems integrators may no longer be needed as compared to previous years because the complex process is being made easier by subscribing to “as-a-service” technologies. There is truth in the complexity of adopting a single set of different technologies which is required in creating a complete solution, thus the role of the system integrator retains its importance. They can provide a broad set of skills including IT, hardware knowledge, industrial communication and expertise in network security. But to play an active role, a system integrator should still continue to develop the necessary skills needed in order to continue serving manufacturers who have integrated and will integrate smart manufacturing in their daily operations.

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As for the transformation in the market as a result of adopting smart manufacturing, three progressive phases should be expected:

Phase One

The overall integration of all manufacturing data throughout the individual manufacturing plants and across the organisation will facilitate significant and immediate enhancements in price, safety and environmental impacts. This phase will ensure that it will interconnect and harmonise individual stages of manufacturing production in advancing plant-wide effectiveness. A common manufacturing facility uses IT, intelligent machines, sensors, computerised controls and production management software in managing specific operations in manufacturing. Although each of them are efficient, they need to be integrated which will enable data sharing all throughout the manufacturing facility. The integration of human intelligence and machine-gathered data will push optimisation and enterprise-wide management targets. This can include an increase in economic performance, worker safety and a sustainable environment.

Phase Two

If this data is paired with advanced computer modelling and simulation, it will result in robust manufacturing intelligence that will enable the business with variable speed, optimal production rates, flexible manufacturing capabilities and quicker product customisation. If the in-plant modelling and the data technologies will be connected to the cloud, it will be possible to build higher levels of manufacturing intelligence and have it connected all throughout the manufacturing plant. The whole production line and the plant will run at variable speeds with real-time flexibility which will help in conserving energy and maximising output. And because of the added capabilities, the business will be able to create and simulate different manufacturing processes to enhance current and future operations.

This phase will connect factory-specific data to usable information throughout the supply chain. It can get information about the availability of raw materials and the customer demand through to the delivery of finished products. It will also facilitate and promote the use of smart grids in scheduling any energy-heavy activities during low-demand periods and slow production during peak energy times. It will provide support to the manufacturing of safer products, a defined and quicker product tracking.

Phase Three

The growth of manufacturing intelligence will inspire innovation in products and processes. The 3rd phase will change or transform the manufacturing industry just like how the effective and strategic use of IT changed traditional business models and the behaviour of the consumers. For example, Amazon started as an online book seller and after 15 years, the company has expanded their product offerings to cover many categories. And as anyone who have visited and used Amazon’s online store, it will suggest products that customers may like and inform a customer what another customer has purchased that is similar or connected to the product a person is viewing. Amazon has taken advantage of Big Data, predictive analytics and advanced analytics boost their sales and enhance their competitiveness.

Smart manufacturing will also deliver this big shift in the manufacturing landscape. It will reverse the flow of the old industrial supply chain model that forced buyers to accept whatever was mass-produced. Flexible manufacturing companies and IT-enhanced supply chains will change the manufacturing process to allow producers and manufacturer to customise products depending on the customer’s needs. Customers will be a big part of the manufacturing process because their feedback and requirements will be taken into account in making products. These changes will push down prices, offer more product choices for a wide range of people and open new markets.

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Smart Manufacturing and the Value Chain

People get confused with value chain and supply chain. A supply chain in manufacturing refers to the company-to-company chain of suppliers that are involved in creating and producing the final product. The interchanges tend to be more of a requirement and based on transactions and can also happen in between operations across multiple companies or within an individual organisation.

A value chain on the other hand is how each of the manufacturing process step adds value finished product and impacts the end-to-end manufacturing process. This also includes the materials used, and the environmental impact on energy. The goal of a value chain is to know the transaction points and focus on the enhancements across both sides of the value chain in achieving sustainability and increased productivity. Competitiveness and innovation at collective or individual stage.

1. Supplier Benefits

It’s difficult for a manufacturing plant and its suppliers to adjust to the needs of the customers or end-users in real-time if there’s limited communication with customer demand. In a value chain, the decisions and business exchanges are enabled between the OEM and the suppliers. This collectively addresses manufacturing and process performance impacts all over the network. This can be based on an integrated and agreed upon set of KPIs. If you take a look at a supplier’s point of view, if they have information on what the manufacturer’s requirements and needs, then they can work better at making their products. The suppliers commonly ship out to more than just one company, thus if they have the right information on what the manufacturer need and when, it will result in a more efficient exchange and they will be able to respond to all of their partners. It’s a win-win situation for everybody.

2. Manufacturer Benefits

For the manufacturer and the supplier, the result is more efficient and effective communications. There will more product transparency and product traceability. Models now can be used in predicting needs and mitigate product variations between the supplier and the manufacturer. Having a digital certificate of analysis that both parties can access through cloud technology is an essential step that can result in increased production, visibility, quality and optimisation across the value chain. Smart manufacturing can give access to affordable new technology and to the latest innovation. It can also launch new technologies for large manufacturers to adapt and implement. The idea of trying out a new product using a small manufacturing facility enables the essential data and model operates in a secure environment.

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3. Integrators and Software Vendor Benefits

Smart manufacturing will change the software and the systems overall business model. The goal is not just bringing prices down but to also increase access to new markets. There will be enhanced user application development and feedback. Having a wider user base means having the ability to do experiments with new applications in creating systems. Rather than putting money in one company, smart manufacturing platforms open opportunities in testing software among several manufacturing facilities at the same time while transitioning from development to deployment. Plus the managed data and communications structure of the smart manufacturing platform will also allow vendor to receive and get feedback faster and from a variety of industry users and perspectives.

4. Customer Benefits

Because there is more data collected and interpreted all through the value chain, customers will be able to take advantage of the information. Product manufacturers can provide customers enhanced tracking and traceability when issues happen within the supply chain. Customers have become a factor and a strong voice in establishing features and manufacturing processes and because of this, the value chain needs to respond to them as well. When a value chain is responsive to the needs of the customers, it will possess a competitive advantage for the manufacturer and all throughout the supply and value chain. And lastly, if the brand or business can display more accurate information to consumers, these consumers will be able to make better purchasing decisions and buy with more confidence. Furthermore, this can benefit the brand and the manufacturer because this type of customer satisfaction will help build better brand loyalty.

Adopting smart manufacturing is a key competitive edge in overcoming the challenges of today’s business. Leveraging technology and enabling people within the plant operating system will make manufacturers gain leverage innovation and best practices in lowering costs, enhance the process and improve the quality of the products.


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