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How Big Data Is Changing The World Of Manufacturing

How Big Data Is Changing The World Of Manufacturing

The manufacturing sector has played a very important role as an economic engine of countries across the world.  Global competition in this sector is fueling a race to convert factories into digital hubs.  By Dr. Darshan Desai and Om Desai, Experfy

Despite the differences in the role of the manufacturing sector in advanced nations compared to that of emerging economies, disruptive technologies, big data, and digital transformations have made their mark on companies in this sector around the world, and have opened up tremendous opportunities for these companies. This is especially relevant for the Asia-Pacific region. According to new figures released by Microsoft, if the region’s manufacturing sector embraces these opportunities and unlocks the potential of digital transformation, the GDP of the whole region can increase by US$387 billion by 2021. According to this study, companies in this sector are likely to invest more in big data analytics, cloud, and Internet of Things solutions this year. While these companies are exploring ways to leverage big data and analytics to gain a competitive advantage, it’s a good time to take a closer look at how big data and the Industrial Internet of Things (IIoTs) can have a transformative impact on the manufacturing sector.

Big Data And IIoTs

Image Source: Experfy

For centuries, we have used data to inform our decisions. This has been increasingly significant, as today, explosive amounts of data are being created every minute. Every action we take leaves digital footprints. On top of that, the amount of data created by consumer and industrial machines is also growing. Smart home devices can generate data and communicate with each other, while industrial machinery is increasingly able to use sensors to gather and transmit data.  The term “Big Data” refers to the collection of all this data, structured or unstructured, human or machine generated, and our ability to use it. This concept is still evolving, and is considered the driving force between many revolutionary waves of digital transformation, like artificial intelligence and the Internet of Things.

The Internet of Things generally refers to a giant network of connected things that includes interactions and interconnections between people and things, people and people, and things and things. The IIoT or Industrial Internet of Things is a subset of the Internet of Things (IoT). Accenture estimates that the Industrial Internet of Things (IIoT) could potentially add an additional US $14.2 trillion to the global economy by 2030.

Potential Impacts And Advantages

Big data analytics and the IIoT can help manufacturers in multiple ways in many different applications. Generally speaking, these disruptive tech innovations are helping manufacturers enhance their security and automation, reduce their financial risk, eliminate production downtime, and increase the quality of processes and products. These benefits of big data are far-reaching and used in all areas of operations, from product quality and stock control, to supply chain optimisation and improved health and safety. The potential impacts and advantages of big data analytics and IIoT in the manufacturing sector can be categorised into four broad categories: predictive maintenance and automation, productivity and efficiency gains, supply chain management, and quality management.

Predictive Maintenance And Automation

With increasing IT investment in the manufacturing sector, a range of off-the shelf software for tapping and integrating data sources, analysing big data, and for closing the loop in optimising processes including manufacturing is now becoming available in the market. The driving force for automation and IT integration is companies’ overall goal to gain actionable data-driven insights to improve products and processes, which can be enabled by IIoT and big data analytics.  For example, manufacturers use inexpensive sensors to reduce condition-based monitoring and maintenance in machines. Wireless devices, along with big data processing tools, make it affordable and easier to mine actual performance data and gain actionable insights to maintain equipment health. A recent article published in The Stack magazine provides an excellent example of the tech giant Intel using big data analytics for predictive maintenance, more specifically, for predicting equipment failure in one of their microchips. They were able to gain a 50% reduction in maintenance time, 25% higher yields, and a 20% reduction in the cost of spare parts, which all added up to $3 million saved. Big data is an opportunity for manufacturers to improve process performance, reduce waste, focus on better products, and produce products more efficiently.

Productivity And Efficiency Gains

Image Source: Experfy

Data-driven manufacturing is driving efficient and responsive production systems. Manufacturers have been able to boost their productivity by understanding plant performance and measuring the operating data of individual machines, which was made possible by analyzing large data sets. Effective and efficient sales and operations planning processes are very crucial to the productivity of any manufacturing company. These processes can create a factory’s load forecast over a period of time, which can help a company decide which products it needs to manufacture at which plant.  These types of plant loading decisions can affect the operational and financial performance of a company. Big data analytics and data points like historical load, industrial record, completed projects, and customer patterns can help optimise plant loading.

Supply Chain Management

Big data analytics and IIoT can provide manufacturers with increased access to real-time supply chain information. When plants are connected to suppliers, all parties in the supply chain can access information and monitor material flow, interdependencies, and product manufacturing cycle times. This type of real- time monitoring of supply chain information can help quickly discover issues, reduce inventory, and as a result minimise capital requirements.

Quality Management

A significant amount of a manufacturer’s annual revenues can be lost through defects in the production process. Many quality issues can be spotted and rectified as soon as they arise by analyzing real-time data from sensors on the production line. Big data use in manufacturing and quality management can reduce product, assembly, and quality management costs for manufacturers. With such large success in cutting cost, many companies are interested in leveraging big data and predictive analytics to increase return on investment.

Concerns And Challenges

A Harvard Business Review article points out a few concerns and potential challenges the companies in the manufacturing sector may face in reaping the fruits of big data analytics IIoTs. According to the article, in addition to the culture and paradigm shift from time-triggered control systems to event triggered control systems, significant challenges can be related to the integration of legacy systems, and creation of unified data. A significant problem is legacy manufacturing equipment that consists of systems that haven’t been upgraded in parallel with the technological innovations.  For many organisations, total replacement of expensive legacy systems isn’t always an option. The challenge, then, is to think of innovative ways to integrate existing systems with tools that allow them to communicate with the newer, more streamlined systems that make up the IIoT. The good news in this situation is that it’s possible to leverage the benefits of big data and IIoT without ripping and replacing existing systems.

Despite the benefits and significant potential impact of big data and IIoT, to get beyond the hype, managers need to understand the underlying challenges. In these types of situations, taking an incremental approach can help companies unlock the transformative value of big data and IIoT.

China Manufacturing Activity Eases In June

China Manufacturing Activity Eases In June

China: Chinese manufacturing activity slowed from an eight-month high in June, official data showed—falling below expectations for the world’s second largest economy in face of a trade war with the US.

According to the National Bureau of Statistics (NBS), the Purchasing Managers’ Index—key gauge of manufacturing conditions—was at 51.5 in June, a dip from 51.9 in May.  The figure was lower than the 51.6 expected in a Bloomberg News survey of economists.

While numbers indicate a slowdown, they maintain a comfortable over-50-point mark that distinguishes expansion from contraction and were higher than NBS’s average reading of 51.3 for first half of 2018.

“The manufacturing industry’s fundamentals are on the whole trending positive. Manufacturing and demand are expanding at an overall steady pace,” said Zhao Qinghe, NBS analyst, in a statement.

Amidst expansion of large-scale businesses in June, small- and medium-sized enterprises experienced contraction in the same period, Zhao noted—both falling below the 50-point mark. Activity has fallen 0.2 to 49.8 and 1.1 to 49.9 points for small- and medium-sized enterprises respectively.

On 24 June, China’s central bank announced that it would decrease reserve requirement ratio for most banks in a bid to grant funding for small firms. The effort, however, might not reap results.

A research note by Capital Economics cited: “Looking ahead, we see increasing headwinds to the economy in the second half of the year from slowing credit growth.” It added that the risk of a China-US trade war is “adding to the uncertainty”.

China’s Manufacturing Vision: Globalisation, Automation, And Robotics?

China’s Manufacturing Vision: Globalisation, Automation, And Robotics?

Low-cost manufacturing played a huge role in making China the second largest economy, and the modern Chinese economy was built based on this competitive advantage in manufacturing. By Farah Nazurah

China has shifted from a centrally-planned to a market-based economy and has experienced rapid economic and social development over the past few decades. Its gross domestic product growth (GDP) has averaged nearly 10 percent a year—the fastest sustained expansion by a major economy in history—according to financial institution The World Bank.

The country’s manufacturing sector is expected to continue expanding in 2018 despite the slight decline of its purchasing managers’ index in December 2017, with a reading of 51.6, dipping from 51.8 the prior month, according to the National Bureau of Statistics in China.

Ambitious Belt And Road Initiative

Chinese President Xi Jinping’s Belt and Road Initiative (BRI) is an immensely ambitious development campaign through which the country aims to boost trade and stimulate economic growth across Asia and beyond.

The initiative will connect Asia, Europe, the Middle East and Africa with a vast logistics and transport network, using roads, ports, railway tracks, pipelines, airports, transnational electric grids and even fibre optic lines. There are plans for pipelines and a port in Pakistan, bridges in Bangladesh and railways to Russia—all with the aim of creating what China calls a “modern Silk Road” trading route.

The plan at one point included 65 countries, which together accounted for one-third of global GDP and 60 percent of the world’s population, according to market intelligence company Oxford Economics. China plans to invest US$150 billion into the projects each year. In a report by financial services provider Fitch Ratings, it was highlighted that an extraordinary US$900 billion in projects were planned or are currently underway.

Impact Of The BRI On The Steel Industry

With BRI proposals including investments for power plants, new and improved ports, airports, and thousands of kilometres of new road and rail links, the initiative will have a major impact on regional and global manufacturers.

It is anticipated that the building of the route alone will result in an increase in demand for steel produced in China annually. The Chinese government is urging its steelmakers to invest in plants located along the routes in Southeast Asia, West Asia, and Africa, for the ease of transportation in bringing in raw materials and maintaining costs. Investors in the project are seeking out iron-ore mines and planning to build integrated steel mills on these routes. Steelmakers in China are expecting a move of almost 20 million tons of low-cost steel capacity to be transported to Southeast Asia, West Asia, and Africa by 2023.

For steelmakers, there is a stream of opportunities that arise due to the migration of steel production throughout the region. There have already been a number of new mills and upgrades within China’s largest steelmaking groups over the past several years; and more are expected over the coming years. As existing equipment is moved from coastal China along the route, there will be a need for new castings, forgings, and hydraulics to keep production running efficiently.

Moving Into Higher Value Manufacturing

Manufacturing goods in China is now only four percent cheaper than in the United States, according to market intelligence company Oxford Economics. This is due to increases in the average manufacturing wages by 80 percent annually since 2010. As a result of this, manufacturing in China has to move into higher value manufacturing, backed by investments worth billions by the Chinese government.

Manufacturers in China are aiming to capture the opportunity presented by the expanding affluence in the country. And more businesses in the country are moving up into segments where profits flow from high-value product features that command higher selling prices, with the industry rapidly moving into high technology manufacturing.

As an example, Chinese automotive manufacturer Great Wall Motors Company has increased research and development spending to develop premium sport-utility vehicle models that compete with international brands in the Chinese high-end market. Additionally, the automaker is sourcing more components from domestic suppliers, thus decreasing its reliance on imported parts.

China’s Future Manufacturing: Robotics And Automation

According to the International Federation of Robots, China is expected to contribute to 40 percent of total worldwide robotic sales by 2019, an increase from 27 percent in 2015. The country currently holds the largest market share of the robotic global market, at a net worth of US$30 billion, and is currently ranked the first in sales for industrial robots. This is followed by South Korea, Japan and the US.

China is turning to robotics and smart factory technologies to boost competitiveness as it aims to close the gap in manufacturing capabilities with Japan and German. And industrial robot sales in China in 2017 are estimated to reach US$4.2 billion, according to the Chinese Institute of Electronics.

“In the future, new business models will emerge,” said Hongtao Guo, director, industrial application research, Huawei Wireless X Labs, China. “Manufacturers will use automation robots to replace workers.”

New generations of industrial robots are more intelligent, agile and can collaborate with other robots and humans, thanks to advancing artificial intelligence and machine learning technologies. And equipment costs have been decreasing after hitting a peak in 2013, thus lowering the entry barrier for factories seeking to automate or update existing robot operations.

Automated Workforce

Robots are not China’s only target. The country is also investing heavily into accompanying technology like machine learning and artificial intelligence. All of this is to construct a highly developed automated workforce. More companies are looking towards automation to move up the manufacturing chain and maintain their production rates in the face of the country’s declining labour force.

In the automotive industry, the reliance on robots is driven partly by cost and automation is a competitive necessity. Robots perform tasks like welding in exactly the same way every time, improving quality control. As automakers compete for customers’ attention, they have to utilise the latest technologies, especially in research and development.

The challenge now is for businesses to keep a competitive edge in the changing manufacturing landscape.

 

Eleven Insights Into The Future Of Manufacturing

Eleven Insights Into The Future Of Manufacturing

From the onset of the industrial revolution to today’s technology driven economy, manufacturing has provided jobs, spurred growth, and enabled consumers to enjoy a higher quality of life. Contributed by Parsec

While many factors affect the strength of manufacturing, it is often these same factors that are a key driving force behind global commerce. While some may think of manufacturing as strictly related to machinery and assembly lines, it is interesting to note that driving productivity and innovation are two of its main contributions.

Increases in productivity without associated increases in costs lead to improved quality of living for many more people around the globe. One could argue that modern day manufacturing is responsible for a significant portion of the innovation in the world—with many of the products and goods the consuming public enjoys being the result of advanced techniques applied to manufacturing.

On The Horizon

Like most businesses, manufacturing is subject to cycles of stagnation and acceleration. Historically, improved manufacturing has led to the growth of the service sector, which in turn has led to a diminished manufacturing base. Regardless, given the important role that manufacturing plays, it would be interesting to look at what we can expect in the next few years.

  • Improved Visibility
    We will have systems and diagnostic tools available to dramatically increase visibility and communications among various components of the manufacturing value stream. Think, Industrial Internet of Things (IIoT).
  • Increased Flexibility
    Market intelligence agency Euromonitor International outlines ten global consumer trends, but chief among them is a demand for more choice and variety. Manufacturers will no longer be able to produce a “one size fits all” product and hope that the buying public will respond. Consumer input will be required, and processes will have to be adaptable in order to quickly respond to changes in demand.
  • Environmental Sensitivities
    Pressures related to climate issues, pollution, and finite natural resources will force manufacturers to increase their environmental mindfulness. More green processes will be developed to operate with less waste and pollution.
  • Higher Quality
    Manufacturers will be pushed to produce higher quality products at lower cost. As the global markets expand, consumers will have more choices and the ability to buy goods that were previously out of their reach. Producers with better products will thrive.
  • Local Sourcing
    As demand for goods proliferates around the world, local sourcing will move into the spotlight. It will matter even more to have local production—especially for products with short shelf lives. Local manufacturing will eliminate many logistics challenges and greatly lower transportation costs.
  • Shift in Labour Resources
    As technology advances, the demand for low-skill production workers will decrease. There will be less need for hands-on labour, but an increase in demand for knowledge workers. Manufacturers will need to plan for a skills transition in their workforce.
  • Smart Manufacturing
    Using better visibility, connected systems, predictive analytics, and more efficient operations will lead to the emergence of smart manufacturing: sensitive to consumer demand, environmentally aware, innovative, adaptable, less susceptible to wild swings, and ultimately more profitable.
  • Streamlined Processes
    The time to research and develop products and bring them to market will decrease even more. Better processes and lowered cost of manufacturing will lead to the availability of higher quality products in the global market—in larger quantities—in ways that were not previously economically viable.
  • Repurposing and Reinventing
    Advanced technology, better insights, and smarter manufacturing processes will lead to rethinking, reinventing, and repurposing existing products for new applications. For example, consider the mobile phone and how its evolution into a smart device has completely altered the computing landscape.
  • More Transparency
    Regulatory requirements will continue to become more stringent while the impact of violation and noncompliance will become prohibitively expensive. However, improved visibility together with enhanced process capability and maturity will make the needed transparency possible—both for internal purposes and regulatory agencies to ensure good manufacturing practices.
  • Increased Competitiveness
    Technology will act as a catalyst to level the playing field. More manufacturers will be able to compete for market share in progressively more sophisticated goods that may currently be out of their reach. This will fuel competitiveness that will drive both innovation and productivity.

Role Of Software In The Future Of Manufacturing

Taking into consideration the expected trends just reviewed, software will play an even more critical role in the future of manufacturing.

To remain relevant manufacturers must be able to get more out of their capital assets. A very effective approach to getting this done is to leverage purpose-designed operations management software. This is already happening at a rapid pace and will only accelerate. Software will be a main component of manufacturing moving forward.

Advances in software will allow manufacturers to be more agile, more flexible, and more competitive. Because information is inherent in this process, manufacturers will rely more on intelligence-based decision making throughout the supply chain—and will be ready to deliver new products more quickly with significantly better life cycle management.

Challenges Ahead

Many of the trends discussed will present challenges to those manufacturers who cannot adapt quickly and maintain the necessary pace to remain relevant. More ubiquitous technologies, larger global markets, and the ever-present appetite for newer and better products will drive manufacturing competitiveness to new heights.

Growth will affect the availability of expert labour pools. Geopolitical events will impact trade balances. Availability of resources will influence regional industrial hubs. Manufacturing activities will inextricably be tied to the necessary services to provide better experiences for the consumers. Environmental and safety regulations will impact the cost of manufactured goods.

A proper mix of human resources, know-how, and technology will be needed to meet the challenges that lie ahead. It is a complex journey where manufacturers need to commit to purposeful innovation and agility to regularly adjust, repurpose, and invent.

Tapping The Potential Of Automation In Sheet Metal Processing

Tapping The Potential Of Automation In Sheet Metal Processing

For Dolanit in China, automating its production chain helped it gain new major customers and projects. Contributed by Trumpf

Qi Wang from Dolanit not only recognised the trend toward automation, but is already reaping the benefits from it. The company is located in Shijiazhuang, in China’s Hebei Province, about 300 km from Beijing. Here, Mr Wang is carrying on his father’s legacy: his father Jianyun Wang founded the company in 1986.

At that time, the company had approximately 30 employees and they used simple tools such as guillotine shears and hand welders to manufacture primarily sheet metal cladding for switch cabinets. Mr Wang now has a staff of 150. The company was the first in the entire province to introduce a linked automation solution with a large-scale storage system and three connected machines. That the company would grow, however, had already become apparent long before this.

Realising The Potential Of Automation

In 2004, the young businessman joined the company his father had spent several years building and expanding. A new business area emerged just a short time later, in 2005, when the Chinese government began subsidising railway development in order to speed up technological advancement and modernisation. Mr Wang recognised the potential of this market early on and was open to it.

“Our focus was on the stainless steel covers for the air conditioning in the trains,” said Mr Wang. To manufacture these components, Dolanit’s machinery would have to be modified—not only did it take too long to transport material between the punching and laser machines, but the quality could not always be guaranteed.

After conducting in-depth research, he found the solution: a punch laser machine from German machine tool manufacturer Trumpf. Even in Shijiazhuang, an 18 hour flight Ditzingen, Germany, Mr Wang had heard about the machine tool manufacturer.

As a result of rising payroll costs, Mr Wang was also looking for ways to continue running and expanding his company profitably. In the course of a business trip in 2013, he was able to take a closer look at automation, which was prevalent in Germany, and the resulting advantages: companies that had fewer employees than his, but that achieved higher productivity. That was the solution to his problems.

In 2014, he took a great leap. He fitted not only his TruMatic 7000, but also a 2D laser machine, the TruLaser 5030 fibre, with loading and unloading units. He connected both of these machines and the next link in his sheet metal process chain, the TruBend Cell 5000 automated bending cell, to a Stopa compact store.

Automation In Sheet Metal Processing

With this significant transformation, Mr Wang boosted his company’s productivity by 30 percent while halving his payroll costs. “At that time, automation was considered a luxury in sheet metal processing, so this quickly and significantly boosted our reputation,” explained Mr Wang.

To ensure not only that his machinery was up-to-date, but also that those who operate it, as well as the rest of the staff, were regularly updated on the latest technology, Mr Wang introduced special internal training courses for all employees. He modeled this change on the experts at Trumpf, who had offered similar courses right after the machines and storage were installed, making it possible to bring the automated factory unit online much more quickly.

Competitive pressure is intense, which is why the consistent and high quality of his products is decisive for Mr Wang. Since automating his company’s production, he was able to acquire many follow-up orders and also gain new customers. Mr Wang hopes to tap new markets—like he first did with the trains. Openness by tradition, you might say.

 

 

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