The drive towards sustainability is adding pressure to readjust the manufacturing footprint
Judging by the headlines, continuous global logistics issues, continued pandemic restrictions, and rising prices for raw materials mean that manufacturers have their work cut out for 2022. In addition, the drive towards sustainability is adding pressure to readjust the manufacturing footprint, writes Salem Machaka, Vice President, Global Professional Services, Infor, in this OpEd.
Most manufacturers are still stuck with a geographic footprint, which was driven by labor arbitrage around the globe, rather than by factors such as closeness to customers or ecological concerns.
To increase efficiency, many producers have started to implement Industry 4.0 technologies. Industry 4.0 came with the promise of a smart factory being profitable at the production lot size of one unit.
The concept was introduced at the brink of the millennium change with the introduction of cyber-physical systems to share, analyze and guide intelligent actions for various processes in the industry to make the machines smarter and to lower downtime.
Analytics can also be used for other aspects like logistics, demand forecasts, production scheduling and quality control, capacity utilization and efficiency boosting.
However, we still stand at the beginning for leveraging the true potential of Industry 4.0. Smart technologies offer no less than the possibility to redesign the global manufacturing footprint, to position factories closer to markets, reduce logistics nightmares and increase visibility of the ecosystem partners, including suppliers and customers.
So, what are the most important ingredients for a strategy to create the future-proof smart factory?
Customers increasingly demand highly personalized products as well as an enhanced customer experience. Manufacturing companies adopt highly agile cloud-based solutions to gain the ability to increase individualization, service additions, and serve higher flexibility requirements.
The need to reduce delays and transport costs, as well as the drive toward a more sustainable production and the imperative to reduce the distance to the physical end-consumer lead organizations to redesign the manufacturing footprint, with the support of leading-edge technologies, to build smaller, smart factories closer to the customer.
Smart decisions require end-to end-visibility. This requires a consolidated view across the manufacturing business, including the commercial, the procurement and the operational sides.
A tightly linked view and streamlined processes across the order system, shop floor operations, and the supply chain optimize capacity and requirement management and fail over alternatives across the entire system.
A global view and command structure to react quickly to supply chain challenges. A connected supply chain operating with a single view of orders, shipments and inventory, and shared digital processes provides the visibility needed to improve velocity and the agility to respond to disruptions in a timely and efficient manner.
More intelligent automation, using AI-driven insights, can lead to assembly lines that are adjusting automatically.
Smart technologies allow smaller manufacturing sites to be situated close to the customers. But how can producers reach fundamental business decisions as to how to relocate manufacturing sites? The most important ingredient needed is good intelligence. True, manufacturing organizations leverage plenty of data across the operation. But is the data linked up, consistent and treated to enable insightful business decisions?
A smart factory is a highly digitized, connected production facility that uses technologies such as artificial intelligence (AI), Internet of Things (IoT) and robotics to help companies manufacture products, create new business value, unlock data-driven insights, and automate or eliminate business processes.
These technologies enable people to do their jobs in a more productive and efficient manner while improving quality and overall safety. At the same time, the technologies enable smart factories to self-adapt and autonomously optimize manufacturing operations, helping organizations to compete better amid the many global challenges they face.