Smart Manufacturing and YOUR Bottom Line

by Tim English - VP Superior Business Solutions on April 12, 2016

Smart Manufacturing and YOUR Bottom Line#2 In A Series: What YOU Need To Know About Smart Manufacturing

In my post introducing this series on Smart Manufacturing last week, I talked about the benefits of smart manufacturing. Machines equipped to “talk” with one another can make adjustments instantly, using real-time data to maximize production. Human interaction is minimized, which reduces the possibility of erroneous reading or slow response times.

I also mentioned that, for all its advantages, smart manufacturing isn’t embraced by everyone. In fact, in its 2014 Manufacturing Outlook Survey, the American Society for Quality (ASQ) found that 87 percent of U.S. companies are not yet using it at all. In fact, 37 percent of the businesses surveyed stated they had no interest in smart manufacturing.

Why So Slow to Get “Smart?”

For some companies, of course, it’s a cultural departure as the transition to a substantially different approach can be intimidating. For most, the issue is one of finance.

Smart manufacturing does, in many cases, require a substantial investment. New capital equipment may be required to accommodate sensors placed throughout for data collection, and advanced computer equipment to link machines to one another, and to integrated control systems for data analysis and corrective mechanisms.

But as in most situations, the perception is greater than the reality. Most manufacturing equipment can be retrofitted with the sensors and computer technology required. In addition, savings to be realized can help mitigate the initial equipment costs. Instead of expensive enterprise-wide software, smart manufacturing allows for less expensive modular software customized to individual machines and operations.

Saving Money – Now That’s Smart

The only real way to combat this perception about the “costly” aspects of smart manufacturing is to look at some real numbers that demonstrate the success experienced by companies that have implemented it.

The ASQ survey reported that, among the 13 percent of business implementing smart manufacturing:

  • 82 percent of them (a vast majority) reported increased efficiency
  • 49 percent reported a lower rate of product defects
  • 45 percent reported a gain in customer satisfaction

And it’s worth noting that these impressive gains were realized from only partial implementation; less than one third of the businesses employing smart manufacturing had deployed it throughout their entire operation. One can only imagine the levels of efficiency and other positive results if they had.

The numbers aren’t really surprising. The efficiency delivered through smart manufacturing means less waste of raw materials, better utilization of machines and manpower, better supply chain performance through real-time data, and fewer defective products that clog landfills. All of these will ultimately be felt on the bottom line.

The Bigger (and Smarter) Picture

The Smart Manufacturing Leadership Coalition (SMLC) estimates similar improvements attributable to the advanced manufacturing techniques involved, projecting a 25 percent increase in energy efficiency, a 25% decrease in safety incidents, and 40 percent reductions in cycle time and water usage.

SLMC also foresees potential benefits in larger arenas such as sustainability, enabling products to get to market ten times faster, and reducing consumer packaging by 25 percent. In addition, the implications for the U. S. industrial base are very significant, as the SMLC envisions an environment that promotes broader innovations, 25 percent growth of revenues in new products and services, and in industries adjacent to those involved in smart manufacturing.

Plus, an important factor when automation replaces human involvement to any extent is the creation of more highly skilled sustainable jobs.

What are Your Thoughts?

It’s easy to see that, in the short term, a move to smart manufacturing can come with some serious financial commitments. But it seems equally evident that when seen as an investment, the payoffs down the line (in many aspects) will be substantial.

What about you? Is smart manufacturing too far out of your comfort zone for you to climb aboard? Or is the promise of dramatically improved productivity strong enough to grab your attention. I’d like to hear your thoughts – just give me a call.  And check in Thursday, when I’ll be discussing the role the Internet of Things plays in all this.

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