Local manufacturing firms continue to face blustering headwinds – from heightened global competition from the likes of China and India, to sluggish demand and macroeconomic conditions, to critical skills shortages and labour issues.
But technology can help to relieve one of the most common pain points that we’re seeing: the stubbornly high costs of production. By using the right digital tools, manufacturers can sustainably reduce their production costs, breathing new life into their margins and ensuring profitable operations.
Let’s look at three areas in which this can be achieved:
1. Raw material inventory and production planning
By using digital tags like RFID, plant operators can gain greater visibility into materials, equipment, parts and other assets. Combine this with other datasets to build up a very rich picture of materials as they flow through a factory to eventually become finished products.
By knowing exactly where everything is, it becomes easier to plan production, as data is automatically piped into one’s Manufacturing Execution System or Production Lifecycle Management System. This means faster logistics and greater throughput of products, as well as increased levels of uptime and productivity – ultimately driving down input costs.
Rapid advances around 3D printing means that certain parts and materials that are required urgently can be created on-site and at short notice, even further enhancing the management of materials.
One of the leaders in this space is, in fact, General Electric. The manufacturing behemoth is reinventing itself with a variety of strategically-connected technologies – including lean manufacturing, additive manufacturing (also known as 3D printing), and advanced software analytics to enhance productivity. At Grove City, GE has used these technologies to reduce unplanned downtime by 10 to 20%, improve cycle time and reduce costs*.
2. Predictive maintenance and predictive analytics
With sensors gathering key data on each machine – from humidity, heat, wear and tear, usage times, oil levels, and various other data points – we can start predicting when a machine is likely to fail, or require servicing.
This principle, known as predictive maintenance, helps to curtail the costs of managing industrial equipment, and reduces unexpected downtime (as services, repairs and refurbishments can all be scheduled to avoid interrupting production lines).
With some analysts’ findings suggesting that downtime costs the average factory between 5 and 20 percent of its productive capacity**, predictive maintenance can be one of the most crucial weapons in the fight against billowing production costs.
But we can extend the principle of predictive maintenance to encompass predictive analytics across the entire factory operations. With predictive alerts flying in from all corners of the factory, it becomes possible to orchestrate the operations more dynamically, changing the daily plan according to fresh data that comes in from along the production line.
3. Proof-of-concept prototypes
In traditional manufacturing, creating a new prototype (for a particular product) was a lengthy and extremely expensive endeavour – particularly when the concept turned out to be the wrong one and never progressed into full-scale production.
But with cutting-edge digital simulations, 3D representations, and holograms, it becomes possible to play around with various new prototype designs – testing them with users and getting a tangible feel.
By creating sophisticated prototypes in these new ways, the dramatic upfront costs of producing a single unit on the production line are greatly reduced. In this way, rapid prototyping and Proof of Concepts (PoCs) can cut out another layer of cost.
As traditional manufacturers evolve towards smarter and more digital production lines, it’s not always easy to know where to invest first, where one will get the loudest ‘bang for their buck’.
But by focusing on these three areas, and then building from these foundations and gradually connecting other technologies, manufacturers can address the most pressing pain point (input costs) and set themselves well on the way to reducing the costs of production.
By Dereshin (Dees) Pillay, Head of Manufacturing & Automotive at T-Systems South Africa