The factories also foster improvements in
safety, environmental sustainability, and rightsizing footprints.
Digitization
Meets Customization
Although it’s exceptional, the Fujitsu site just hints at the
possibilities for digital factories. Indeed, the overall slow adoption of
digital factory concepts can be seen in a recent PwC survey of 200 German
manufacturers (German companies were examined as a proxy for advanced
manufacturers globally because they have a well-earned reputation for production
innovation). Although more than 90 percent of survey respondents said they had
earmarked money for digital factories, these investments were overwhelmingly
for stand-alone or only partially integrated technologies. A mere 6 percent of
companies categorized their factories as being “fully digitized.”
However, perhaps the most intriguing takeaway from the PwC survey
was that despite their timidity about digitization, manufacturers are beginning
to recognize its strategic potential, which previously tended to be overlooked.
That’s not to say that bread-and-butter tactical considerations are ever far
from manufacturers’ minds; 98 percent of respondents still view digitization
somewhat blandly as a path for increasing production efficiency. But at the same
time, a whopping 74 percent of companies named regionalization (being able to
set up or expand factories in markets where their products are sold and where
opportunities exist to widen revenue streams through customized products and
improved service levels) as a primary reason for digital investments.
Moreover, in a sharp departure from the recent past, the
possibility of being able to immediately tailor products to match customer
preferences and to offer customers the option to “build” their own products appears
to be driving production decisions more strongly than slashing labor costs.
Indeed, only about 20 percent of respondents now plan to relocate manufacturing
facilities to low-wage countries in Asia, Eastern Europe, and South America;
nearly 80 percent are looking at Western Europe (where their largest customer
bases are) for new digital factory capacity. Evidence of this trend can be
found in Adidas’s new “speed factories” — one established last year in Ansbach,
Germany, and another this year in Atlanta. In these facilities, automated
production lines, managed by human programmers and fed by networks that oversee
the sportswear company’s supply chain, are able to make a pair of expensive,
customized cross-trainers from start to finish in about five hours. In Adidas’s
low-cost, less digital Asian factories, this process can take several weeks.
According to the company, the speed factories will more than pay for themselves
in the next few years when they are scaled up. In particular, the speed
factories are expected to slash the long lead time for debuting new shoe
designs and allow Adidas to react quickly to about-faces in customer
preferences.
Modernizing the Technology Spine
Some of the technology spine in digital factories involves
relatively old-fashioned software (primarily legacy ERP/MES systems or even MS
Excel) that was originally acquired to perform basic planning and address
operational inefficiencies. By joining these isolated data and analytical
networks, via sensors and the cloud, to a common infrastructure, it is possible
for components, machines, production managers, transportation vehicles, and
assembly-line workers to continually communicate with one another and the
extended ecosystem in real time — greatly shortening the distance and time from
raw material to finished product and facilitating proactive equipment
maintenance.
Much of the impact of digital manufacturing will come from
significant advances that are still evolving and that postdate the traditional
ERP era — for example, robots that can learn through repetition rather than
programming. This equipment can give workers the opportunity to train machines
quickly to tackle multiple tasks, flexibly shifting robots from job to job as
specific factory activities take precedence.
Another example is drones, which can be used for rapid transport
of a missing part to an assembly station and for visual surveillance of plant
and equipment performance. In a somewhat more open-ended application, Austrian
automotive supplier Magna Steyr employs drones in its plant in Graz, Germany,
to independently fly through the assembly line, scanning materials labels to
compare against available stock in the warehouse and provide information to the
network for managing factory inventory. Magna Steyr has also embraced an
intriguing component of the digital factory whose potential value is just
beginning to emerge: namely, the digital twin, or a virtual doppelganger of the
plant, including form, functions, and chemical and physical processes. With
this approach, new factories can be designed and engineered in three
dimensions, and potential glitches and inefficiencies may be remedied before
the plant is put into service. After the plant is on-line, real-world
performance and activity data is fed back into the digital twin, which can be
monitored and adjusted to continuously optimize processes and maintain
equipment at peak efficiency.
Understanding the Obstacles
One of the more intractable obstacles to a successful digital
factory is the makeup of the workforce itself. This type of advanced production
approach represents an entirely new model of human–machine interaction, one
that not many workers — or manufacturers — are prepared for. In our view,
understanding the impact on the people in the company is at least as important
as calculating the financial benefit of the digital factory, in part because
the former will ultimately impinge on the latter. Employees who feel
marginalized by the emphasis on new technologies or who are not equipped to
work in that environment will compromise the factory’s chances for success.
Purely from this perspective, companies are clearly aware that
they are not ready for digital factories. According to our survey, around half
of manufacturers believe that their employees are not open to digital change,
and an equal proportion feel that their company lacks a truly digital culture.
Part of the solution is to retrain the company’s ablest workers to be more data
oriented and conversant in programming factory automation equipment; another is
to support government-based apprenticeship programs and
recruit employees who better match the requirements of a digital factory.
In other words, manufacturers cannot afford to be passive but instead must lead
the charge toward reorienting the skill sets of their current and future
employees.
But that alone is not enough. Top management must actively support
the move toward digitization and, very publicly within the organization, build
trust and acceptance for the new strategy by offering employees a convincing
narrative of how they will benefit from the technologies.
Executives could stress that workers will be relieved of tasks
that are highly repetitive, physically difficult, and unsafe while improving
their accuracy and productivity. They may enjoy the benefits of a cleaner
environment inside and outside the more ecologically sound factory. And their
employment and salary prospects may actually improve. Approximately half of the
companies responding to the PwC survey expect wages in digital factories to
increase, and they believe that older employees will be able to stay at their
jobs longer; 86 percent expect that overall, the number of hours employees work
will stay the same. This suggests that companies will be sharing some of their
new gains in efficiency and revenue with their workforce.
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