During the financial crisis of 2009, the United States’ largest automobile manufacturer, General Motors, filed for bankruptcy. According to the Harvard Business Review, the reasons gives included making cars no one wanted, slowness to innovate, and the inability to adjust to changing markets. Today, a pandemic-inspired crisis led to and is still leading to bankruptcies as manufacturers struggle to deal with a changing market. The challenges include a changing global supply chain, government regulations, fluctuating demand, and the need for accountability. But unlike the heady days of the 2009 crisis, advanced digital transformation solutions exist with the capacity to assist manufacturers with future-proof manufacturing operations from disruptions.
What is Digital Transformation?
Digital transformation refers to the integration of digital technologies within manufacturing facilities to optimize how it operates and delivers value-added services to customers. The digital transformation of the factory floor also involves the application of technology solutions to capture data and aggregate data to support operational strategies.
For example, capturing machine utilization data and analyzing these data sets alongside maintenance records form the foundation for developing predictive maintenance strategies. The digital transformation of the factory floor is made possible by the implementation of hardware and software solutions to create an interconnected factory.
The interconnected factory where data transfer occurs seamlessly is a tenet of Industry 4.0. Interconnectivity powers the cyber-physical systems needed to automate industrial processes and gain data-driven insight. Digital transformation technologies also enable manufacturers to peer into the future with high levels of accuracy. In turn, the ability to predict future disruptions allow manufacturers to develop plans that take into consideration these disruptions.
Understanding today’s Disruptive Factors
The major factors disrupting manufacturing operations still revolve around the pandemic as second and third waves sweep through different countries. These disruptive factors and the traditional processes they disrupt include:
- The Safety of People and Products – The safety of the products coming out of shop floors, as well as, the safety of the operators producing these items are key considerations for every manufacturer. The pandemic has disrupted the jolly manufacturing floor where everyone was allowed to access most sections of the shop floor. Today, safety regulations limit contact and the number of people on the shop floor while facilities are still expected to meet increased demand and optimize throughput quality.
- Disrupted Supply Chains – According to the World Economic Forum, factors affecting traditional supply chain routes include political and Covid-19 inspired factors. The risk of relying solely on foreign raw materials was exposed during the pandemic as manufacturers struggle to purchase and bring much-needed materials into their countries. Politically, China accounts for a considerable amount of raw materials and 60% of the consumer goods exported across the globe. To reduce over-reliance on China, embargoes have been placed on exporting certain items. Thus, local manufacturers must source for these items elsewhere.
- Government Regulations – Regulatory policies targeting emission rate produced in industrial estates means manufacturers must track machine emissions to reduce them. Countries that are signatory to climate protection accords enforce the need to lower industrial emission rates and this task is passed on to individual manufacturers.
- Fluctuating Demand – Increased demand is the expectation of every manufacturer as it usually means increased revenue. To take advantage of increasing customer demand, manufacturers must increase manufacturing capacity and develop optimized schedules to deliver quality products within specified timelines.
- Product Accountability – Unlike the ‘good old days’ where customers accepted any product they could purchase and low service levels, increased competition and the e-commerce experience has led to customers demanding more. Today’s customer wants traceable products with great quality at their doorsteps preferably in 24 hours instead of tomorrow. Government agencies also request accountability from manufacturers to ease the process of tracing defective products.
Future-proofing Your Manufacturing Operations with Digital Transformation Technologies
Digital transformation provides manufacturers with diverse technology solutions to mitigate the challenges caused by the aforementioned disruptive forces. The pandemic accelerated the adoption of work from home initiatives which also apply in a hands-on industry like manufacturing.
For example, the implementation of industrial IoT devices makes it possible to remotely monitor manufacturing operations and reduce shop floor traffic. The digital twin, a virtual representation of physical operations, can be deployed to track manufacturing operations in real-time through data transfers to and from the factory floor. These digital transformation technologies are at the forefront of supporting the post-pandemic work-from-home culture in the manufacturing industry.
IIoT devices and edge devices are capable of acting as sensors that track machine emission to inform operators about emission rates. The captured emission data is then used to enforce emission regulations set by governmental departments within the factory floor. IIoT and edge devices can track and capture historical supply chain data which can be deployed to evaluate new supply chain routes.
To deal with supply chain challenges, simulation modeling software utilize the data IoT devices capture to evaluate the impact of new supply routes on delivery timelines and new supply chain routes. Simulation modeling applications help manufacturers answer complex ‘what-if’ questions regarding capacity planning, schedule optimization, and resource allocation.
Utilizing simulation modeling to develop flexible manufacturing strategies can assist manufacturers with dealing with market changes that can disrupt production. For example, risk-based scheduling ensures a manufacturer can develop optimized schedules to respond to disruptions in real-time. Thus, the effects of fluctuating demand or unplanned downtime can be mitigated.
Advancements in digital transformation technology provide manufacturers with the tools to develop sustainable strategies to deal with tomorrow’s challenges. These technologies enable manufacturers to anticipate future challenges and develop optimized plans to deal with them.