Digital transformation technologies are giving manufacturers more transparency, agility and competitive advantage. But it’s not without its challenges.
Clients come to us recognizing that they have a skills and knowledge gap in this area as well as low visibility into their own systems. This makes it incredibly challenging to move toward any impacting digital solution. To help readers understand how best to approach the technology, this blog outlines how two manufacturers are successfully using digitization to enhance their operations. Spoiler alert: It doesn’t stop at technology.
Optimize supply chain for same-day deliveries
• Capability: Product forecasting, scheduling and tracking framework
• Technologies: ReadyPlanner, Innova MES, Finite Capacity Scheduling
Companies that supply fresh produce across broad distribution networks must have a reliable scheduling and supply-chain framework, or else face product wastage on a mass scale.
A major Australian supermarket chain realized it needed a smart, integrated system to address this challenge after opening a $150 million dollar facility to supply a national distribution network with a highly perishable product. The company implemented a “pull model” system, where raw materials were managed for maximum efficiency, driven by actual store order demand. Three core areas were addressed: forecasting, scheduling and traceability.
Using advanced planning and scheduling techniques, along with automated materials handling equipment, the retailer was able to achieve make-to-order production with same-day order delivery times, increasing the available shelf life of the product by an average of 1.5 days.
Orders are now received from retail stores early in the morning, and are automatically planned and scheduled prior to production starting for the day. Production at the factory is scheduled to align with store distribution runs and is produced in pallets specific to each store.
Shipping the product directly to stores eliminates storage requirements, saving $50 per pallet. This also achieved a “delivery in full, on time” goal of 98.5 percent.
How can I do it? Identify where data in your supply chain is and isn’t flowing. Map out what data exists in your business, where data is siloed in disparate systems, and what paper-based systems might be constraining data flow. Then prioritize where reductions in waste can be made.
Achieve operational excellence and competitiveness with needs assessment
• Capability: Digital transformation needs assessment
• Technologies: ERP, EAM, SCM, MES
In any business, there’s still a tendency to fix a problem that isn’t actually the problem at all. The iceberg principle—where only a small amount of information is visible, and the bulk of the data is unavailable or hidden—is highly relevant as manufactures start trying to solve long-held problems with digital technologies.
A canned meat manufacturer in the U.S. came to us wanting a manufacturing execution system (MES) after listening to a presentation at a vendor conference.
As with the iceberg principle, we found that the MES was only part of the challenge. With a thorough current-state assessment, we uncovered people and process areas for improvement that could yield much more if addressed during the technological change.
Other opportunities for improvement were available by harnessing process analytics, machine learning, predictive modeling, and automation of materials handling and warehousing. These are expected to reduce inventory by 45 percent, improve yield by more than 10 percent and reduce raw material costs by 2 percent. These efforts add up to tens of millions of dollars in annual savings.
The takeaway? These solutions are around people, process change and technology. All three of these components need to happen together—people need the technology to give them the data they need to make decisions so they can execute processes properly.
How can I do it? Truly effective digital operations are not about the technology. Recognize that it’s not just a digital problem—it’s a process, people and automation problem. The current-state assessment ranks manufacturing and supply chain processes on a 0-5 star rating on range of criteria, including maturity, level of digitization, and efficiency of the process. This benchmarks you against industry best practice and identifies areas of opportunity.
These cases show that companies should use the right technological solutions—while paying attention to people and processes—to address the right problems and respond to market demands. This is how I recommend you take advantage of digital disruptors going forward.
Geoff Nunan is principle consultant at Nukon, a Sage Automation brand. Sage is a certified member of the Control System Integrators Association (CSIA). For more information about Sage, visit its profile on the Industrial Automation Exchange.