In my keynote, I stressed that Smart Manufacturing initiative around the world, are all inspired by research that indicates that manufacturing growth, competitiveness and resilience are directly correlated with high technology intensity and manufacturing complexity as well as quality. These three key factors can be improved and maintained by investment in product, process and productivity innovation. The smart manufacturing initiatives around the world (for example Industrie 4.0 Smart Manufacturing Leadership Coalition (US), or Horizon 2020 (EU)) all aim to impact these factors and create growth from manufacturing innovation.
To create some clarity, we decompose smart manufacturing in advanced manufacturing (such as modular production technology, additive manufacturing, nano technology or biotechnology) and smart manufacturing technologies. Among the latter industrial IoT (Internet of Things) has obtained a lot of attention, and contributes to global awareness and determination to implement IT-related manufacturing solutions to create a multitude of benefits, new business models, additional productivity and more.
Looking closely at today’s developments in supply chain networks within these initiatives, we find an initiative piloted by General Mills as part of the Smart Manufacturing Leadership Coalition (SMLC) to reduce the implementation of supply chain applications dramatically. The company aims to reach implementations with durations of months rather than years. In Europe, ThyssenKrupp is one of the integrated companies that consistently implements Industrie 4.0 across domains and operations. The company was able to increase the throughput of a plant producing intermediate products (transforming steel slabs into rolled steel), by applying pull manufacturing and coordinating manufacturing and logistics with real-time information. While pull manufacturing is not new, it a great opportunity for many industry sectors to apply it. Fortunately Industrie 4.0 creates momentum to do this. In specialty and performance chemicals as well as life sciences, the NAMUR organisation is well known for their vision and standards, mostly in automation and IT for manufacturing. In supply chain coordination, the contribution by Dr. Poetter from Bayer Technology Services in 2013, anticipated the use of wireless and/or internet connectivity to faster order raw materials to variable production orders. A Supply Chain Operating Network such as Elemica could perfectly play its role in such a scenario to make the link between supplier and manufacturer to find the raw material that could arrive earliest at the production site, when the supplier has IoT connectivity with its logistics network. The latter could then directly coordinate via Industrial IoT connectivity with the manufacturer to reserve a docking station and creating an unloading appointment.
In the near future, modular production technology – miniature chemicals plants in a container – will make supply chains much more agile than today’s. But to plan and optimise them, they become also more complex. Manufacturing capacity can be very fast and flexibly scaled up and down, and production units can be shipped to sites close to raw material production or consumers. Early examples today are on-site production of liquified air and dangerous gases as feedstock for downstream production.
As a result of these developments, ARC expects that supply chains will become fare more agile, dynamic and complex over the coming years. Not only the number of permutations of possible routings will become orders of magnitude larger, also the tighter supply chain network integration will cause important supply and demand volatility that should be damped with high quality supply chain coordination and professional operation of Supply Chain Operation Networks (SCON). New developments in discovery, predictive and prescriptive analytics applied to supply chain network regulation and optimisation are very promising to assist the operators. As these can operate in-memory and in the cloud, they take out ‘latency’ of previous-generation applications and can compensate for supply chain volatility.
Industrial IoT, supply chain optimisation and analytics can help the operators best, when they allow them to focus on problem solving by providing easily interpretable analyses within context and unload the them from repetitive tasks. Then the operator can work at his best, and assess, delegate, interpret, judge and decide with consciousness and skill. As each decision involves emotional processing in the brain, for example when it concerns ethics, we will continue to need operators as part of our systems.
ARC recommends users to take time for planning the future and set radical improvement targets in product, process and supply chain performance, as Industrial IoT solutions have shown to be able to provide those. These goals should be aligned with the users’ strategies, and a roadmap should include quick wins – as incremental solutions are available today – as well as a long term plans. Since the smart manufacturing landscape changes quickly these roadmaps must be updated regularly.
There were many other excellente presentations at Ignite, both by Elemica, users, partners and consultants. Dr Stefan Artlich from Bayer Technology Services gave a very crisp presentation on the state of the art in serialisation for drug manufacturing, reporting about a pilot in Sweden, technology maturity, challenges and benefits. Dr. Olaf Stange from Bayer Health Care spoke about supply chain innovation, and both referred back to the modular production technology introduced by me. These were additional indications that industry transforms these concepts into momentum. Dr. Stange mentioned many challenges that the pharmaceutical industry needs to respond to, ranging from patient information, through societal cost, via complexity of invidualized therapy and short shelf lives as well as the complexity and variability of labelling and legal requirements. Supply chains need to be very accurate he said, and to increase the speed through the network the company studies ‘virtual factories’ with ‘late nationalisation’, referring to an as-late-as possible labelling of ‘white products’.
Another fascinating presentation was made by Mark Babbit from Switch and Shift who talked about the power of social networks, with recommendations of who to manage them professionally as a corporation.
Most presentations can be viewed as Video’s or PDF’s at the following link http://resources.elemica.com/h/c/212968-conferences-and-events. We encourage our readers to explore these further.
Valentijn de Leeuw is a Vice President of Consulting at ARC Advisory Group. Based in Europe, Valentijn’s responsibilities include research and consulting in process industries, with focus on clients in Europe, Middle East and Africa (EMEA). His technology focus is on manufacturing operations management, performance management, knowledge management and the role of the knowledge worker in manufacturing. Valentijn holds a PhD of technical sciences from Delft University of Technology (NL) in cooperation with Ecole Nationale Supérieure des Mines de Paris and IFP.