Bringing the power of Industry 4.0 to SMEs

CNCs and other legacy equipment can be mated with Industry 4.0 technology to create custom dashboards.

Myths abound when it comes to Industry 4.0 and its benefits for manufacturers. However, if implemented correctly, Industry 4.0 can positively affect a business’s productivity and bottom line.

Some of these benefits are reducing material loss to zero and the elimination of defective parts. Also, paper-based data entry is reduced as are the related errors. Operators are empowered thanks to improved training, and productivity is increased with the use of tablet-based Industry 4.0 technology.

Integrated materials, production, and quality management teams simultaneously make informed, collaborative decisions to optimize manufacturing efficiency. Current problems in the plant are reported to key stakeholders in real time.

Production “starvation” caused by materials shortage is eliminated by remotely integrating material suppliers into the SME’s daily operations.

In a case study of a small manufacturer of steering and brake components (annual turnover of approximately $10 million), the company was encountering several detrimental effects to its bottom line.

1. Significant material loss of roughly 12 per cent of the profit annually.
2. A relatively high cost of quality at about 12.5 per cent of annual profit.
3. Part rejects amounting to 2 per cent of sales.
4. Substantial subjectivity in part quality measurements and manual recording of data in the ERP system, which contributed to an inaccurate estimate of quality.
5. Uncertainty in raw material availability from suppliers, leading to production “starving.”
6. Reactive maintenance resulting in high upkeep costs.

The manufacturer was familiar with the concept of smart manufacturing but was hesitant to adopt it unless key concerns could be addressed.

Here were the five concerns regarding this technology:

Concern 1: Industry 4.0 is too complex and impractical for a business of this size. Management did not see any short-term benefit in helping them being productive and competitive.

Resolution: It was explained to management that doing nothing would only increase the possibility of losing market share in the not-too-distant future. Convincing them that the proposed smart transformations could be designed to start delivering incremental benefits immediately, while creating opportunities for drastic benefits in the longer term, was instrumental. Management then sought employee buy-in by holding a workshop to introduce the project, present the big picture, and solicit the necessary co-operation at the shop floor level.

Lesson Learned: Adoption of Industry 4.0 technology requires buy-in across the organizational structure.

With Industry 4.0 technology, ERPs are transformed into smart enterprise systems that logs rejects with reason codes, reduces manual data entry, and tracks material use.

Concern 2: Adopting Industry 4.0 is expensive and impractical for small manufacturers because it costs a lot of time and resources that cannot be spared.

Resolution: Low-cost IoT devices and innovative processing techniques were proposed to minimize the investment required so that the benefits could far outweigh the risks. Providing a “bundle” of Industry 4.0 technology, at an affordable cost, helped tackle the problems faced in-house.

Lesson Learned: A low-cost offering, well-established outcomes, bundled industry 4.0 offerings, and quantified profit improvement processes result in an ROI of less than one year.

Concern 3: Industry 4.0 is not compatible with legacy infrastructure and needs significant capital expense to upgrade.

Resolution: By connecting directly to existing legacy equipment using non-invasive current sensors and existing network infrastructure, real-time dashboards of equipment performance were provided to key personnel meaning there was no need to completely revamp their existing shop floor setup. Downtime incidents were tracked in real time with the ability to enter root causes and send notifications to relevant personnel. Overall equipment effectiveness was tracked to enable short interval control.

Lesson Learned: Innovative and easy-to-use technology and processes with last-mile connectivity can convert legacy machines into self-diagnostic, “smart” production assets.

Concern 4: SMEs lack the skills and resources to implement, use, and support Industry 4.0 technology.

Resolution: The manufacturer’s employees were excited to acquire new skills in high technology and management, and the Industry 4.0 technologies introduced were based on smartphones and tablets, making them quite easy to use.

The only resource required from the manufacturer during implementation was the time of the maintenance personnel (for about two days), who had a good knowledge of the machines and the factory infrastructure/assets. Thorough training on the use of the dashboards was provided, and this was augmented by 24/7 remote support. There was no need to invest in an on-site IT specialist.

Lesson Learned: Industry 4.0 technology enables empowerment of factory workers and motivates them to become more productive.

Concern 5: Integrating automation islands with corporate systems is difficult given the lack of internal expertise and cost.

Resolution: An open standards-based Industry 4.0 technology provided a seamless, low-cost vertical integration to the SME’s relevant “home-grown” ERP modules. This converted the ERP into a smart enterprise system wherein material was accounted for in real time, rejects were logged with reason codes, manual data entry was eliminated, and optimal ordering cycles with suppliers was enabled based on actual production needs.

Lesson Learned: Vertical integration of Industry 4.0 with enterprise systems brings the much-needed visibility to executive management to make informed decisions.

Mrinal Chakravarty is business development officer for 5G Energy Ltd., 202-203 Colonnade Rd., Ottawa, Ont. K2E 7K3, mrinal@5genergy.ca, www.fifthgentech.com.