Market competition, ever-changing customer demand, and faster delivery expectations are placing more strain on manufacturing businesses.
Manufacturing leaders must improve their productivity, profit, and product quality, simultaneously ensuring a sustainable workplace that protects employee health and safety.
Proekspert’s specialists are well familiar with digital technologies, having years of experience in software development for industrial automatics. We help manufacturers implement digitalization to improve their plant operations and create a future-proof digital enterprise.
The transformation process is evolutionary, taking years, and requires adjustments across the entire organization. Proekspert sees digitalization as a four-phase process.
Assess the technological requirements needed to connect your multiple systems, laying the bedrock for a smart factory.
Create models for structured data gathering and sharing. At this level, a critical activity is the reduction of irrelevant information flow through increased accuracy in data collection.
Create data-gathering models to eradicate irrelevant information and ensure accuracy of information. Aggregate the impact of collected data through real-time process analytics and optimization.
Prioritize smart- and predictable production methods. Know the impact in advance and guarantee profits thanks to production reliability.
Underestimating the extent of the transformation required is the reason more companies fail than succeed when it comes to reaching their digitalization goals. Transformation concerns people, mindsets, processes. It is a change driven by purpose which, in turn, results in value and allows the business to evolve.
Factory digitalization is the combination of traditional manufacturing processes enhanced with advanced technologies. The end goal is to improve profitability through cost reductions without a loss of quality. Also improved are efficiency and competitiveness.
With the business environment becoming increasingly digital, the question is “when” a factory should digitize, not “if.”
Digitalization is not only about the use of technology and automation – it’s about how people and processes align with newer methods of achieving manufacturing productivity, safety, and reduced operating costs.
Factory digitalization is changing how products are designed, manufactured, used, and maintained. It is also transforming operations, processes, and the energy footprints of factories and supply chains.
Digitalization fosters closer cooperation between stakeholders. For example, between suppliers and customers and between employees themselves, providing new opportunities for all parties involved.
When discussing factory digitalization, the transformation process may be broken down into two areas: Smart manufacturing and Smart factories.
Smart manufacturing utilizes connected digital products to monitor manufacturing production processes. Its goal is to identify opportunities for automating operations and use data analytics to improve manufacturing performance.
By collecting and analyzing data, manufacturing companies can make better, more informed, and smarter decisions.
Physical production processes are combined with digital technology enablers and data analytics to create an optimized production system.
Smart manufacturing plus the smart factory means information access, all applied using the Internet of Things.
Next-generation manufacturing incorporates digital technology to maximize efficiency, increase manufacturing capacity, and build processes that create value.
As plants adopt technological concepts, customers have come to expect a higher level of service. Businesses remain competitive via digitizing manufacturing plants and reap the following benefits.
Operating a facility can be centralized, improving the ability to oversee all lines and take control where needed. When working more centrally, the human workforce can monitor the entire factory at once, without having to be present on the factory floor.
A PwC report notes that companies investing in factory digitalization to drive efficiency are expecting revenue increases of 12% over the next five years.
It is evident that digital manufacturing technologies accelerate innovation in both design development and processes.
With the colossal strides being made in CAD systems, the question is not whether a manufacturer should adopt them, but rather how quickly.
Modern technology enables automated traceability by recording data that is gathered from constantly monitored machine parts, product components, and production lines.
Information on each component and product, including inspection results, assembly details, and time spent at each station, is recorded from end to end.
Improved connectivity creates three opportunities for manufacturers:
The benefits of digitalization can fundamentally transform every aspect of the business.
With data from connected equipment, manufacturers stand to gain a new level of operational visibility across sites. This is the foundation for significant operational improvements, such as the implementation of predictive maintenance programs. Factory digitalization detects and prevents quality problems by finding and addressing equipment issues sooner.
Real-time business information enables quicker decision making, thrusting companies ahead of their competitors through faster reaction time to market volatility. When considering the dynamic nature of a shop floor, and the number of stakeholders who need to collaborate, the benefits of paperless manufacturing extend to multiple operational areas and hold potential to transform operations.
Paper and Excel sheets are costly, slow to file, and highly prone to human error. If data is not available in quickly-extractable digital form, decision making is slowed, costs increase, and the market advantage is lost. Real-time reporting and monitoring through data unification will enable data-driven decision making.
Keeping a manufacturing plant running for longer, without breakdowns, requires regular predictive maintenance. Connected devices send information from to workers that a machine requires repair. This reduces the need for constant on-call maintenance workers, since factory supervisors can plan machine maintenance. Reduced downtime inevitably leads to reduced costs and increased profits. Not only can you determine which equipment is using the most energy, enabling changes to reduce energy costs.
Factory digitalization doesn’t always require substantial investment in sophisticated machinery – it may be possible to digitally connect existing manufacturing equipment. Connection provides data that can be used to correctly estimate faults, avoiding human error when assessing factory hardware.
Safety is an integral part of lean production, and how manufacturing companies manage safety is changing.
Many are employing software to enhance their safety programs, which improves documentation, incident tracking, as well as the entire safety culture. Digitalizing the management of safety instructions enables quick uploading of existing instructions and the collection of digital signatures – no more paper-based processes.
According to the Annual Manufacturing Report by PwC, manufacturers who do not digitalize may see profits fall as much as 5.1% compared with similar organizations in their sector.
Legacy platforms, misaligned technology, departmental workarounds, and other siloed departments all contribute to this profit erosion. Factory digitalization overcomes these hurdles.
The key challenges include:
Technology complexity, its integration within legacy systems, and implementation costs are seen as obstacles when building a factory of the future.
Another challenge, especially for global manufacturers, is keeping sensitive data transparent, available in real-time, and secure.
Because of perceived implementation costs and effort, many manufacturers try to avoid a full digital transformation, only partially changing their factories.
These small-scale solutions will deploy faster and bring instant results. However, long term, they create even more complex legacy systems that impact a manufacturer’s future potential.
The human aspect of factory digitalization is often underestimated. A poor understanding of modern technology can significantly impact digital transformation and even the implementation of smaller digitization projects.
The eradication of multiple shop-floor roles due to an increase in automation means that future workers must be more digitally skilled in order to work in this new digitized business environment.
The real challenge is the lack of people able to handle digital technologies on the production-plan level. No one knows what future skills the manufacturing sector will require since it is changing so dynamically.
Employees and managers who embrace the digitized mindset will be critical for future performance.
Greater connectedness in the globalized world has led to increased attacks on IT systems. This threat is real due to the growing adoption of sensors and other devices connected via the Industrial Internet of Things (IoT).
Industry 4.0 has only increased the likelihood of attacks due to data gathering and transmission via IP (Internet Protocol). Data must be protected when transmitted, whether within factory walls, to third-party data processors, cloud analysts, or supply chain partners.
IT/OT system security in the integrated and online environment is often cited by manufacturers as one of the main challenges when adopting factory digitalization. An integrated and connected shop floor, as well as a connected supply chain, are seen as significant threats to a company’s security and safety.
Some manufacturers move their systems to the cloud to obtain a more flexible, yet competitive advantage. Others worry the cloud can be hacked and opt for on-premise platforms. Any manufacturer keen on embracing a digital future must understand that the threat from cybercriminals is an inevitable part of digital transformation. Recognizing the threat, though, is not the same as doing nothing about it. Modern cyber defenses are sophisticated and effective.
Transitioning from a traditional business model to a servitized one is hard for many to accept. A servitized business model requires a complete change in mindset, focusing on value instead of cost.
Even well-intentioned plans can go awry without knowledgeable execution or partners who understand your industry’s intricacies and best practices. To avoid these fears, manufacturing companies can best prepare themselves for digital transformation by ensuring they tackle the following critical issues.
Factory digitalization should be in line with business strategy. To ensure processes deliver business value, clearly define expectations for change. By defining needs, you will be able to earlier identify and prioritize potential barriers.
Ensure that all senior people at the company commit to factory digitalization. Having fully digital factories is a long-term strategy, with an ROI of two to five years. That requires top-level investment decisions and changes in the business ecosystem.
Technology is only a tool. Without the proper use and analysis, it will not be as effective. Ensure you map the exact order of actions, roles, and the technology needed in the digitalization process.
Quick decision making is a pre-condition for success. Digitalization enables faster decisions made in real time.
Digitalization gives maximum benefit when technology and processes are integrated into existing systems.
Reliance on IP connectivity makes adopting cyber protection technology a must. Today, nearly all digital manufacturing technologies contain such protections.
Factory digitalization is an opportunity to create new business models like servitization, meaning a shift from a product-centric business model to one that is service-centric.
Manufacturing-as-a-service offers benefits for manufacturers who compete with low labor-cost countries. Service-based products help maintain the customer base.
A manufacturer capable of scaling will need to reskill and upskill their staff by developing better quality training programs that teach real digital skills.
If in-house training capabilities to train aren’t present, collaborating with similar companies can help fill the skills gap required.
By digitally retrofitting a factory, manufacturers can get ample benefits:
When technology protects investment
The hardware investment, made more than 15 years ago, was protected by software re-engineering, and was then integrated with other production systems.
The Proekspert team protected the original investment by re-engineering the existing system so that it would run on new software.
As technology digitizes manufacturing, smart enterprises that embrace it and digitize all their operations see the most competitive advantages amongst the competition.
Here is a factory digitalization case study in manufacturing using technology to bring value to its company and customers.
Paljassaare Kalatööstus AS is part of the Vičiūnai Group, specialists in manufacturing surimi-, fish- and flour products. Vičiūnai’s portfolio comprises more than 3,000 products, under the brand names VIČI, Esva, Columbus, and other trademarks.
The company produces over 120,000 tonnes of food products annually, exporting over 85%.
However, a 15-year-old production-line weighing system stopped itself every week, resulting in inaccuracy in product unit weights and missing production line information.
Since data concerning weight was of poor quality, it provided limited insight for post-production analysis and more efficient planning.
The weighing system did not integrate with any other systems, and two to three hours of manual work was needed daily to reconcile data.
This delay caused delays in information availability, made data prone to errors, and was a waste of human resources.
You can read how Proekspert modernized their company through factory re-engineering here.
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