Digital Transformation in Manufacturing - 7 Ways to Create Smart Factories
What is driving digital transformation in the manufacturing sector?
Manufacturing as we once knew it is over. Legacy processes have been unceremoniously dumped. Digital laggards have become dinosaurs and a new way of conducting business has been ushered in.
The 2021 State of Manufacturing Report reads much like an admission that Covid-19 turned the industry on its head in a matter of months. Supply chain resiliency has rocketed to importance for 68% of businesses. Operating costs competition has become a problem for 36% of heavy manufacturing CIOs. 84% are switching to on-demand manufacturing tech. Change is everywhere.
Smart manufacturing and the fourth industrial revolution
Microsoft describes the fourth industrial revolution as industry 4.0
“The fourth industrial revolution, aka industry 4.0 puts connectivity and communication at the centre of processes. It paints a picture of a future where smart decisions are made faster, by devices.”
For manufacturers, this will involve combining traditional manufacturing processes with new integrated technology that aims to mitigate inefficiencies. This fourth industrial revolution will transform how businesses operate and benefit the customer.
The digital transformation urgency has been noted by all industry players with 91% of manufacturers increasing their net technology spend. But, where is it coming and how can you get ahead?
How is digitization impacting the manufacturing industry?
The reality is that the fourth industrial revolution was always coming, pandemic or not. The need for more efficient connections and communications was obvious. We were all just happy for it to be a slow burner and to invest in our own time before Covid-19. We don’t have that luxury anymore.
The implications of the ‘smart’ craze seemed a distant, futuristic possibility. However, all of a sudden, the enforcement of remoteness, social distancing, and hands-off operations accelerated everything.
Traditional processes are rapidly being paired with advanced technologies to eliminate industry inefficiency. Concerns over supply chain vulnerability in covid times implored stakeholders to automate many of the conversations. Smart manufacturing is here and resistance seems economically futile.
The Smart Factory - What successful digital transformation looks like for manufacturing
Smart factories were largely conceptual and realized most commonly in sci-fi movies. But they are the future.
Digitally connected factories with centralized networks, 3D printing, big data analytics, and automation. Independent machine learning. Heavy manufacturing machines autonomously checking for quality and assigning tasks to other machines. Devices self-optimizing using integrated circuits. It’s all taking place in modernized factories.
Industry 4.0 is about connecting the shop floor to the top floor using a selection of advanced tools. The two main pillars of such Smart factories are Sensor Technologies and its able accomplice, the Internet of Things.
Advanced Sensor Technologies
Smart factories don’t happen without the ability to collect and collate large amounts of data at a reasonable cost. The critical cog in the whole system is smart sensors installed in machines, motors, and robotics. They are the eyes and ears of your operations.
It is unrealistic and a waste of resources to expect the shop floor to detect minor errors in bulk orders or to expect senior leaders to watch over every individual machine maintenance charter. In fact, the gap between critical knowledge and what can be humanly generated is enormous. Sensors fill that gap.
From reducing the power supply in latent times to highlighting when a machine needs servicing, advanced sensors save time and money. Sensors collect all the monitored data and automatically presents it in usable reports and metrics. They allow senior leaders to make smart decisions fast.
Internet of Things
The Internet of Things is where we see the machines actually come alive.
In simple terms, the IoT is where your printer runs low on ink and autonomously generates an order with your supplier before you ever run out. It removes the need for hand holding in your machine operations from the staff teams.
While that example is overly simplistic, it paints a picture of automating the chain. Taking it one step further, smart factories and machinery allow you to introduce innovative updates to your equipment and connect them to overall processes. Your factory floor can become a circuit of machines producing products, checking for quality, ordering new parts, booking maintenance services, and scheduling shipping.
The end result is fully automated operations and homogenous quality with a drastically reduced cost of sales.
7 Ways to Create Smart Factories
It starts and ends, with finding a suite of integrated technology that drives digital transformation.
A clear digital transformation strategy is clearly the way forward, however getting there can be nightmarish. While it is tedious and can take excessive time, the process of finding the right technologies for smart manufacturing is absolutely crucial. A symbiotic collection of solutions that work together is the answer, but how do you begin? We’ve broken down the process into key steps to make things easier.
1. Understand the business needs and goals
It’s virtually impossible to make software buying decisions without first setting some objectives. Where does your factory need to make improvements? What are the current pain points for the staff and what does the future look like?
Consider this the setting of the stage. This will be your foundation for the entire process and guide all stakeholder contributions.
2. Stakeholder and Needs Discovery
Your business and individuals departments have unique needs and senior management won’t always be privy to them. They won’t always know what causes the most headaches or where things become resource-heavy. But your boots on the ground will.
Speak to as many of the relevant stakeholders as possible. Every machine operator, team leader, supplier, and even customer should be heard. Survey, job shadow, host meetings, call your customers. Hear from everyone who could quietly hold vital information.
Build a list of requirements from all the stakeholders involved. When it comes to implementing any software and hardware further down the line, the voices that were heard will ensure a smooth transition.
Survey key stakeholders:
- Where could we improve our operations?
- What processes take longer than they should?
- What do customers complain about?
- What do suppliers complain about?
- What would the best machines be able to do?
- What do you need the newest machine or software to be able to do?
- What is your budget and is there flexibility?
3. Gather and Rank your requirements
Hearing all voices allows every stakeholder to influence buying decisions but some voices will be more important than others. This is where ranking the priority requirements comes in.
What are your non-negotiables? What absent feature would block a purchase? These are the must-haves. They need to feature high up the list as per the most relevant stakeholders. Where could the biggest efficiency wins be made? Google individual requirements. If you are using Olive, you can browse through our requirement libraries. All of this information will help you write clear requirements.
Don’t forget the nice-to-haves. Although it may not be a deal-breaker without these requirements, they should feature. When your dealing with vendors, having a clear set of priorities is essential. Once you have gathered all the requirements it's wise to let your stakeholders rank them collaboratively to determine the priority features the solution must have.
4. Gather the Vendor Options
By now you will have gathered a strong list of prioritized and articulate requirements. The next step is to take these to the market and find a match.
Remember, this is still the discovery phase. Cast the net far and wide. You might find a perfect match just beyond your budget but it’s worth it.
Study competitors. Read reviews. Go to webinars. Search high and low to drum up a long list of potential providers. Expect to land on a market comparison site quickly but be wary. Sites like G2, Capterra, and even Gartner can be a fantastic resource but are selective in the vendors they show. All vendors displayed in your search pay to be there. The problem here is that the perfect solution might not be shown simply because they don’t pay a subscription fee. Often the results can be tainted with bias.
If you end up on the phone to some of the vendor options, be wary of your cognitive biases. You are talking to skilled salespeople who are used to trumpeting out the most eye-catching features. The best rule of thumb is to always ask “how does this matter to my specific needs?”. Be ruthless because your team and operations are the important and sometimes forgotten detail.
5. Evaluate and Shortlist Vendors
Step 5 requires you to trim your list down to the best of the best. Who serves your priority requirements in the most efficient and cost-effective manner? The aim is to shorten the list to 5 at most. Any more than that and it will be a complete headache.
If a solution is slightly over the budget, does the ROI make it worth it? Do you hit all the requirements? Where does the vendor stand with your nice-to-haves? No matter what fancy features a vendor can provide, it is not a solution if it doesn’t satisfy your requirements.
6. Request a Demo
A demo is the litmus test for the shortlisted solutions. Rule number 1 for requesting a demo is “don’t go alone”. Bring relevant stakeholders to all demos. The people who will be using the machines and software should be represented in the discussions. Ensure that they get an opportunity to ask questions.
When it comes to dealing with the vendor, be prepared for the sales pitch. Take note of whether it is tailored to your ranked priorities or an overly-rehearsed, sparkly-object-filled presentation.
The number 1 thing to always do with new options is to get a demo. In sales terms, “features tell, benefits sell”. If it doesn’t benefit your business, the features are irrelevant.
Ask lots of probing questions:
- How does the solution meet your needs?
- In what ways does it help your company?
- Are there add ons or upgrades coming down the line?
- How has it served your industry in the past?
- What is the after-sales service like?
- Who else have they worked with?
- How does it integrate with other hardware and software?
- Does it provide and leverage data analytics?
- Is it easy to use?
- Will it make your company better?
7. Choosing Digital Transformation Tools Wisely
We understand that the process is arduous and can be exceptionally frustrating but it is crucial.
Your choice of system or solution must be directly in line with the requirements set out by your stakeholders. Poor adoption and implementation rates are heavily linked to stakeholder engagement throughout the process. Discuss your preferences with the wider team and get additional demos if needed.
95% of manufacturers believe that digital transformation is crucial to the survival of their business. Far less can devote the amount of time this process requires. The solution is Olive.
Olive facilitates your stakeholder engagement and collates all the necessary information and opinions in an easy-to-use format. Our app guides you through establishing and ranking your requirements, helping you compare vendors on the market. Our software is not influenced by any vendor bias because we don’t take any fees for presenting them to our clients. We operate solely on your behalf!
Whittling down your options is easy with our percentage fit scores. When it comes to demos, the vendor is shown exactly where they underperformed against your priority requirements so they know the importance of demonstrating fit when the time comes.
Olive is an end-to-end technology evaluation platform that drastically reduces the time it takes to digitally transform. Smart manufacturing is about to accelerate the entire industry and those who hesitate will be swallowed by their innovative peers. Allow us to help you lead the charge!