Smart Manufacturing is a popular phrase, but understanding what “smart manufacturing” actually means—and more important, how to apply it to the design and operations—remains a challenge.
To address this, MESA International has published a new guidebook, A Low-Risk, Incremental Approach to Smart Manufacturing for Small & Medium Manufacturers. The guidebook takes a look at the issue of understanding and implementing Smart Manufacturing across several plant disciplines, including operations, engineering, IT, project managers and end-users. MESA defines small and medium manufacturers (SMMs) as those with fewer than 1,000 employees, which it notes makes up 90% of global manufacturing companies.
This excerpt from this guidebook provides an overview of its concepts and outlines the path toward effective implementation of Smart Manufacturing. The full guidebook, which covers the strategies and best practices from MESA’s authors and reviewers, is available at this link.
The general opinion of many SMMs is that Smart Manufacturing (SM) is not for smaller manufacturers. This document’s intent is to dispel this belief and provide five important reasons for SMMs to embrace SM:
- Achieving competitive advantage
- Informed decision-making
- Maintaining a single version of truth
- Mitigation of risks due to scarcity of skilled labor
- Improvement in profit margins
Each of these five reasons is critical for SMMs to consider, not just for revival, but also for achieving sustainable growth. This is especially true for the continually changing environment created by COVID-19. In general, the objective of Smart Manufacturing is to achieve a continuous and radical improvement in a traditional manufacturing process using technology to acquire critical information about the process during each stage. In other words, the goal is to become agile and adaptive throughout the entire value chain by creating intelligent processes by adopting new technologies.
To accomplish this, manufacturing processes need to be collecting real-time data and connected, so the physical process flow is aligned with a corresponding data flow throughout its entire lifecycle. Considering the limited resources at the disposal of SMMs, this document suggests creating this digital continuity or digital thread via incremental and modular transformations in SMMs’ traditional processes. Some examples of modular transformations provided in this guidebook include paper-based data collection, machine health monitoring, material tracking, quality inspection, supply chain and customer interactions.
SMMs can consider this modular transformation as a “low risk, incremental” step. Each step is designed to build on the other within a common interoperable platform, prioritized in sequence, such that implementing each step brings tangible benefits to SMMs, before moving on to the next. An iterative process for implementing SM principles is provided through 10 practical steps provided in this document based on three common themes - focus, agility and small wins. These 10 steps guide SMMs on how to think big but start small (developing a road map), properly scope and budget the initiative, identify success metrics, formulate a granular project plan, get buy-in from all stakeholders, execute the plan, verify the results and justify the investment.
Smart Manufacturing has been a topic of conversation within the global manufacturing industry for nearly a decade. Most of the messaging, benefits and even case studies have typically been geared toward large, multi-national corporations. However, given that more than 90% of manufacturers globally are small and medium manufacturers, there is a long way to go for transformative global adoption. So far, SMMs have been hesitant to embrace the principles of SM. Informal discussions and certain focused surveys have indicated the following misconceptions that could potentially impede the acceptance of this concept among SMMs:
- SM principles are not useful
- SM is costly and the ROI is uncertain
- SM cannot be implemented with minimal infrastructure and manpower resources
This guidebook is an attempt to dispel these misconceptions and to demonstrate the importance and applicability of SM for SMMs. It proposes a practical, minimalistic approach to SM that is incremental, evolutionary, measurable and affordable for SMMs.
The following are considered crucial drivers for applying SM to SMMs.
Achieving Competitive Advantage
Most manufacturers will agree that digital technology has rapidly changed consumer behavior in the last few years. For example, product co-creation allows for hyper-personalization down to a single, individual customer. In the considered opinion of the MESA Smart Manufacturing Working Group, two different but loosely coupled dynamics are emerging because of this:
- Shorter product lifecycles
- Mass customization (more variety in small production volumes)
Therefore, it is imperative that all manufacturers (especially SMMs) consider transforming to a more digital-centric, flexible factory to cope with these challenges.
To maintain growth under this scenario (short product lifecycles and/or more variety in small volumes), a SMM must have the capability to leverage the investment made across a family or entire portfolio of products. In other words, the SMM must amortize the investment across the entire business, as opposed to an individual product. Such amortization can easily be realized when the cost of change in the manufacturing process from one type of product to the next is extremely low or negligible.
Using SM techniques, such flexibility can be achieved via software re-configurations with minimal changes needed in the physical hardware and other fixed costs. When supporting processes such as supply chain, production scheduling, customer management, marketing, etc. are also embracing the changing plant dynamics in an integrated manner, the entire company can start to create a significant competitive advantage.
Quick adaptation to product changes provides a significant competitive advantage to SMMs by responding to customer needs more efficiently, effectively and with greater speed. Simply put, this enables a more agile and nimble approach to manufacturing.
The advantages of such flexibility have become evident as many manufacturers have responded to the Covid-19 challenge by producing new and entirely unplanned types of products the market needed within a short term (e.g., masks, ventilators, PPEs, etc.). Those who were most successful leveraged their existing manufacturing infrastructure for a different type of product.
Decisions Based on Information
Most people would agree that company success boils down to continually making a series of good decisions. The better the decisions made, the more successful the outcomes. Making good decisions is based on different factors, including knowledge, experience, wisdom, common sense and, most importantly, information. Information is the one attribute of good decision-making that is quantifiable, repeatable and measurable.
This is true for any size organization, but especially for SMMs. In most cases, the SMMs will have a Lean Management Structure where major decisions are made by only a handful of individuals. As operational and technological complexity increases, many SMMs strive for a more democratized decision-making process, wherein individuals with the appropriate domain expertise can make meaningful decisions more autonomously.
This information is where Smart Manufacturing comes into play. SM enables decision-makers to have the right information at their fingertips at the right time to help them make better decisions. And because this information is digital, all stakeholders throughout the entire value chain (both inside and outside the organization) have instant access.
SM makes this information available by collecting more data, aggregating and integrating disparate data sources, contextualizing the data and communicating it to the right people at the right time so it is easily digestible and actionable.
As was evident from the recent pandemic fall-out, SMMs have been significantly more vulnerable to sudden changes in the economy, market, customer volatility, supply chain disruptions, etc. and therefore need to become more resilient and proactive. The availability of up to the minute information on a tablet or smartphone can equip SMMs with valuable information to make the right decisions quickly. This way, they shape their own destiny instead of [being] dominated by outside influences.
MESA promotes the exchange of best practices, strategies and innovation in managing manufacturing operations and in achieving plant-floor execution excellence. MESA’s industry events, symposiums and publications help manufacturers, systems integrators and vendors achieve manufacturing leadership by deploying practical solutions that combine information, business, manufacturing, and supply chain processes and technologies.
Among those who contributed to the MESA guidebook are:
Authors and Editors
Ananth Seshan, 5G Technologies
Conrad Leiva, CESMII
Stefan Zippel, Litmus
Ryan Spurr, Connection
Michael Ford, Aegis Software
Julian Zhu, Litens
Jeff Winter, Microsoft
Eric Cosman, ISA
Gerhard Greeff, Iritron Ltd
Thomas Nall, Avanade