Danger, danger Will Robinson! That does not compute!

By Guest Blogger: Floyd Miller

Industry Trends

Are you experiencing a tsunami of data? Smart, connected devices are transforming virtually every function in manufacturing. And, while the change feels massive right now, we are only connecting a small percentage of what potentially can be connected, with expectations of billions of additional smart objects being included in the future.

There will be more changes on the factory floor in the next few years than in the last century. With every connection delivering data, the challenge is to turn that data into an asset versus a financial liability. Indeed, the value of data to a company can rival human and financial capital if it is deployed intelligently. It can transform the value chain, enabling the benefits of the Smart Factory to extend beyond the production of the physical object to the entire enterprise.

Every Smart Factory Begins with Dumb Data

What makes a Smart Factory smart are the enabling technologies that leverage data to improve processes through automation and self-optimization. In a period of rapid change, new business fundamentals are key to capitalizing on evolving challenges and opportunities.  

The focus of most Smart Factory initiatives is on understanding production; which machines and lines are running and what capacities they are delivering. The goal is to determine how to most efficiently utilize resources to their highest and best use driving higher utilization capacity. Plants can’t afford disruption – downtime can cost as much as $100,000 per minute and product recalls in the hundreds of millions. Smart Factory intelligence is being driven by Internet of Things (IoT) data utilizing techniques like Artificial Intelligence, Big Data Analytics, Machine Learning, and even old school methodologies like Data Mining and Predictive Modeling. With advanced technologies, it’s easy to slap a sensor on it and collect data from virtually any step in the production process – if you can name it you can record it.

Our ability to collect data through connected technologies like sensors and dump increasingly larger amounts of data into the cloud is useless unless it drives supply chain efficiencies and productivity. IoT must be an enabler of core process improvements versus a technology resource hog. Manufacturers are reporting investing tens of millions of dollars in Smart Factory initiatives - digitizing and interconnecting disparate sources of data to drive production processes. Those investments must deliver automation and efficiency that result in products being introduced more efficiently.

The Smart Factory Key

However, the key to a truly Smart Factory – one that captures the potential billions in value and exponential increases in productivity promised by Industry 4.0 - exists beyond the four walls of the factory. The question is how much attention and investment actually extends beyond those four walls?

Not much right now.

The new normal has become: The temperature sensor says a belt is at the end of its life cycle based on an algorithm that initiates a maintenance ticket that is processed because of an AI model that improves the mean time between failures and automatically adjusts the parts inventory that is held at the point of use in an inventory control system triggering a series of changes to the ERP system to improve supply chain efficiency and financial forecasting.

All fairly routine activities focused inside the four walls of the Smart Factory today. But the Smart Factory isn’t so smart if it doesn’t extend its visibility and integration beyond the factory sensor data to include relevant market data. The production line might begin in the factory, but it extends to the point of consumption. That same micro-sensor information about a belt getting “hot” and impacting production can be extrapolated to macro-sensor data such as a weather condition in a sales region impacting demand or a glut of white label product that’s unaccounted for in the supply chain.

The truly Smart Factory has an extended enterprise footprint beyond the efficiency of the production line that reaches all the way to external conditions of the market place. The mad rush to put a sensor on every micro-manufacturing process should be evaluated within the context of understanding macro-manufacturing requirements.

As new technologies emerge that allow us to collect more data, to make more products faster and more efficiently than ever before, we have to get smart ourselves. We have to look smartly at better data delivering accurate insights to determine what products we need to make in the first place. Smart Factories start with smart strategies developed by smart people looking outside their factory’s four walls.

About Your Guest Blogger:

Floyd Miller is the CEO of SupplyPro. An entrepreneur, technologist and marketing pioneer, Miller previously served as chairman and CEO of Lowe Live, founder of Miller/Huber Relationship Marketing and has held senior leadership positions at Ashton-Tate Software, Doyle Dane Bernbach and Chiat/Day Advertising. He has also worked in roles ranging from Computer Programmer to Distribution Center Manager. Miller received his B.S. in business from San Jose State University. Miller currently sits on the board of SupplyPro, Inc.

Engage with ARC Advisory Group