Apr 19 2017

MANUFACTURING’S NEW MATH: CEOs juggle complex factors in calculating where to locate tomorrow’s factories

CEOs are rethinking their global manufacturing footprints, locating plants and R&D facilities as close as possible to major customers and preparing for a new wave of technologies that could transform the shop floor. To seize the future, they must persuade their organizations to experiment at a time when risk control is paramount.

Manufacturing1Twenty years ago, about a dozen publicly traded industrial metal-cutting companies were headquartered in the United States. Today, Kennametal is the last survivor. While others failed, Kennametal transformed itself into the prototype of the modern global manufacturer, leveraging a world-spanning network of factories and research facilities.

Under the leadership of CEO Carlos Cardoso, the 75-year-old Pennsylvania-based company does business in 60 countries and achieves slightly more than half of its US$3 billion annual revenues outside the United States. “We’ve done that not by standing still in the United States, but by growing the rest of the world at a faster pace,” Cardoso said.

The key to Kennametal’s success has been to follow large customers such as General Motors as they move into new markets. By being available where its customers are doing business – North America, Europe, China and India – Kennametal avoids losing them to local suppliers who then might emerge as global competitors.

Kennametal offshored, but not for offshoring’s sake. It remains a net exporter of high-technology, high margin products.Skill Increasingly Trumps Wages

Skill increasingly trumps wages

Like other best-in-class global manufacturers, Kennametal is engaged in a relentless push toward the high end of the technology food chain. It makes drill bits that operate 30,000 feet beneath the ocean’s surface and tools to cut the complex carbon fiber panels in the Boeing 787 Dreamliner.

“There are two types of manufacturing,” Cardoso argues. “There is the low-labor-cost, high-volume, low- margin type of business that requires low skills. Those jobs are the jobs that have been mostly outsourced and offshored. Then there are high- technology, highly innovative, highly skilled, high-margin jobs. Those have tended to stay in developed economies.”

Leaders in China, a major beneficiary of offshoring, have noticed the same trend, especially as low-skill manufacturing has begun moving to countries with even cheaper labor. “We know we can’t keep relying on a low-cost competitive advantage,” Commerce Ministry spokesman Shen Danyang said in January. “We need to accelerate the value-added upgrading of our products” (see related article “China’s Challenge“).

For years, many CEOs thought China’s low wages were the answer to all their pricing challenges. Many, like Apple and Dell, outsourced the manufacturing of their most sophisticated products to third parties such as Singapore’s Flextronics and Taiwan’s Hon Hai.

Today, although factories in China remain crucial to satisfying exploding demand in the region, the value and utility of relying on factories 12 time zones away to make sophisticated products for North American and European customers is being questioned as never before.

“The equation for deciding where to locate manufacturing on either side of the Pacific Ocean is shifting,” said Willy Shih, a professor of management practice at Harvard Business School and co-author of the book Producing Prosperity: Why America Needs a Manufacturing Renaissance (see related article “Global Shift“).

The downside of offshoring

Deep structural forces help explain the shift. China’s currency has racked up double-digit gains, making it more expensive to export made-in-China goods. Labor costs are exploding by 25% to 30% a year. The Boston Consulting Group estimates that the costs of manufacturing in China will reach US levels by 2015.

In addition, long supply chains are slow to respond. Entrusted to the wrong people, important intellectual property can “leak” from companies that are not careful, and even from those that are.

Focusing exclusively on cheap labor also ignores the costs of coordinating far-flung operations and supply chains. CEOs are discovering that the feedback loops among customers, R&D and manufacturing are crucial for sustained innovation, so locating manufacturing close to R&D can be advantageous.

For example, 40% of what Kennametal sells is customized for specific end users. Six hundred Ph.D.s and engineers in nine research and development centers worldwide work to devise new materials, including tungsten carbide and industrial diamonds (see related article “Super Substances“). CEOs achieve the greatest profits and largest gains in shareholder value at this high end of the manufacturing ladder.

Continue reading the rest of this story here, on COMPASS, the 3DEXPERIENCE Magazine

Permanent link to this article: http://www.apriso.com/blog/2017/04/manufacturings-new-math-ceos-juggle-complex-factors-in-calculating-where-to-locate-tomorrows-factories/

Apr 12 2017

CENTER OF EXCELLENCE: Optimizing key step in realizing MES/MOM operational transformation

In a previous post, I wrote about the latest Gartner/MESA survey of manufacturers who have deployed MES across their enterprise. This survey is conducted annually by Gartner, a global technology firm, and the Manufacturing Enterprise Solutions Association, and it provides important insights into the experience of more than 100 MES-user companies.

What the survey revealed over the years is that manufacturers achieve rapid ROI from MES investments through basic improvements, but most miss out on the potential long-term benefits. Gartner writes, “Despite the strategic importance, organizations struggle to define suitable business cases and fail to recognize the full value that MES provides.”

The reason, as explained in my previous blog, is that manufacturers tend to treat MES as part of the ROI-funded IT portfolio, instead of as “a formal strategy based on business needs and future capabilities.”

This is a critical distinction, but what does it mean in practice?

The key step every manufacturer should take

Manufacturers have very diverse needs and goals. Is there is a common thread to be found among the companies that have reaped the greatest benefits from MES? The answer yes, and the common thread is the MES Center of Excellence (CoE).

In the MES world, the CoE is a means to universally deploy best practice processes, discover new ones, and continuously improve manufacturing operations everywhere. This is the very essence of Operational Transformation. A CoE is more than a centralized testing center. It is a means to manage the global manufacturing landscape from an enterprise point of view. Obviously, this requires a level of standardization and organizational structure across an organization.

As the Gartner analysis explains: “…integrating manufacturing activities with the supply chain requires some foundational work and best practices. To implement new technologies to bridge supply chain silos, there has to be common context and process. This may be a sobering truth, but the end results are worth the effort.”

The general approach to creating a CoE is to standardize on an enterprise MES that can be rolled out to all plants, monitored and updated remotely from a centralized system. The broader the activities covered by the MES, the greater will be the impact on the organization. For instance, integration with CAD modeling and the engineering bill of material (BOM) on the one hand, and Quality Control on the other multiplies the value well beyond a single plant. Thus, the MES solution should be able to see beyond the four walls of the plant to suppliers, customers, and upstream-downstream within the organization. It’s also important to have a system that allows for local variations such as language and regulations, and these local modifications must be easy to implement.

What the survey tells us

To return to the survey, we find that manufacturers that have implemented something like the above are reporting “significantly better results.” These companies enjoy the ROI of their more short-sighted competitors, and in addition, they set the stage for even greater organizational gains that are possible.

As Gartner states: “The sustainability of these quick wins is anchored by creating and maintaining an MES center of excellence (COE) and the expertise to govern activities across multiple plants. The more concerted the upfront effort in the creation of implementation templates, the better the end result.”

Specifically, organizations that achieved 75% or more of their MES objectives tended to focus on four business criteria, all of which are directly enabled by a Center of Excellence:
■ Enforcing standard processes/best practices across the manufacturing network
■ Increasing visibility across the manufacturing network
■ Improving quality
■ Improving employee decision making and competency

It would be difficult to predict the value of these criteria based on an ROI analysis, but they are clearly key competitive factors that are closely related to cost, performance, productivity, and brand—issues that should resonate with upper management.

The lesson of the survey seems clear: MES investments should be based on strategic and business improvement goals, not because they can be ROI-funded in an IT portfolio. And those goals are best achieved with “a highly empowered CoE.”

In my final blog in this series, I’ll discuss a few roadblocks to the CoE and preliminary steps of how manufacturers might structure their CoE. Hint there more than one way! In my final blog in this series, I will discuss how, using a formal process that focuses on business value and is proven to produce results, that both the short term and strategic benefits can be realized.

Related article:
The secret to MES success: Learn from experience

Permanent link to this article: http://www.apriso.com/blog/2017/04/center-of-excellence-optimizing-key-step-in-realizing-mesmom-operational-transformation/

Apr 05 2017

Educators focus on teaching skills to help students master both physical and virtual worlds

DRESDEN, GERMANY - MARCH 12: E3-research factory of the Fraunhofer Institute for Machine Tools and Forming Technology in Chemnitz working on a research project Smarpro (Smart Assistance for Humans in Production Systems) on March 12, 2015. An employee of the Institute operates a touch screen monitor. (Photo by Ute Grabowsky / photo library via Getty Images)

DRESDEN, GERMANY – MARCH 12: E3-research factory of the Fraunhofer Institute for Machine Tools and Forming Technology in Chemnitz working on a research project Smarpro (Smart Assistance for Humans in Production Systems) on March 12, 2015. An employee of the Institute operates a touch screen monitor. (Photo by Ute Grabowsky / photo library via Getty Images)

Manufacturers are increasingly using new technologies, including the Industrial Internet of Things, robotics and additive manufacturing, to eliminate waste and raise productivity. But educators are challenged to train the new workforce and retrain existing ones with the skills they need to work successfully in these factories of the future.

In the factory of the future – also known as the smart factory or Industry 4.0 – people and technology work together in an environment that seamlessly combines virtual and physical worlds, all aimed at improving efficiency and sustainability.

“The combination of ‘virtual’ and ‘real’ in order to get a full view of the complete value chain will allow factories to produce more rapidly, more efficiently and with greater output using fewer resources,” according to the International Electrotechnical Commission (IEC), a Switzerland-based international technology standards organization, in its “Factory of the Future” white paper.

While the vision may be futuristic, it’s already paying off for the world’s most advanced manufacturers. The American Society for Quality’s “2014 Manufacturing Outlook Survey” found that 82% of organizations that had implemented smart manufacturing reported increased efficiency, 49% said they experienced fewer product defects and 45% said they had increased customer satisfaction.

For all manufacturers to benefit from the factory of the future, however, requires “highly skilled technical talent,” the IEC advised – workers who can understand and manipulate virtual models of the physical environment. That represents a challenge for educators, and some of the world’s top technical training institutions are adopting new approaches to helping workers develop the skills demanded by futuristic factories.

Preparing for Industry 4.0

The concept of smart factories or Industry 4.0, conceived in Germany as “Industrie 4.0,” has demanded new ways of thinking about both manufacturing and education.

“We face the same challenge in our curricula as the industry does with its production processes,” said Vera Hummel, professor of Logistics and Industrial Engineering at ESB Business School at Reutlingen University in Germany. “Industry 4.0 is not simply about production efficiency. It is also about how you can build up new business models based on dedicated technologies. By understanding the potential of digital transformation and of the integration of the physical factory with the real-time digital image, which bi-directionally maps the virtual and the real world, students will be prepared to become the future experts of our economy.”

For students, this entails learning three nontraditional skills.

“The first challenge for students is learning to use the hybrid working system in combination with the technical assistance and cyberphysical systems,” Hummel said.

“The second is the seamless digital engineering environment. In the past, students only had to work with either CAD, process engineering or robot simulations, but now they have to work with all of these digital tools, which support advanced, world-class production technologies in a seamless development process. The third challenge is learning to manage intelligent products based on highly diverse customer requirements in self-steering production systems.”

Teaching those skills demands a move away from traditional classes, where subjects are separated by discipline, to give students a comprehensive understanding of the interrelationships and dependencies among mechanical, informatics and automation processes, Hummel said.

Master’s degree students, therefore, spend two days a week for 15 weeks working on projects in a specially constructed “ESB Learning Factory,” which combines the physical infrastructure for production with cloud- based tools for digital engineering. “They learn how to handle big data, digital processes, new business models and new cooperation models between departments,” Hummel said. “Our vision is to create a future-oriented ESB learning factory that will give the students hands-on experience with the world’s newest technologies in the context of Industry 4.0.”

Continue reading the rest of this story here, on COMPASS, the 3DEXPERIENCE Magazine

Permanent link to this article: http://www.apriso.com/blog/2017/04/educators-focus-on-teaching-skills-to-help-students-master-both-physical-and-virtual-worlds/

Jan 05 2017

Megan Nichols

What You Need To Know: A Manufacturing Safety Management Guide

work safety, manufacturing safety guideSafety management in manufacturing is essential. Without protocols in place to prevent and diagnose incidents regarding transit, radiation, chemicals, machinery, and explosives, there is a large risk for workplace injuries and fatalities. Concerning manufacturing safety management, here’s what you need to know.

The Role of OSHA and ISRI

Congress passed the Occupational Health and Safety Act in 1970 with the aim to “encourage employers and employees’ efforts to reduce the number of occupational safety and health hazards at their places of employment, and to stimulate employers and employees to institute new and to perfect existing programs for providing safe and healthful working conditions.”

Since then, OSHA has played a pivotal role in workplaces around the country. OSHA’s regulations comprise the framework of manufacturing safety within the US, with regulations including standards on permit use, accident prevention, electrical equipment and electrical hazards and machinery guarding.

ISRI, the Institute of Scrap Recycling Industries, formed an alliance with OSHA in October 2015, with the goal to “promote health and safety in workplaces throughout the recycling industry.” The agreement continues OSHA’s original goal of preventing workplace incidents and prevention of hazard exposure.

Safety in Transportation

Many businesses rely heavily on transportation to implement and deliver their services. Whether receiving or sending materials, it’s important to heed safety in transportation and avoid cutting costs associated with hiring drivers. In addition to the monetary loss, a transportation hazard can put lives at risk if a driver is inexperienced or inattentive.

Choose a fleet of drivers and transit directors with experience and attention to general safety practices. Also, be sure the driver is familiar with the type of vehicle and materials inside. A driver handling drum equipment, for instance, should be fully aware of proper methods for handling drums on ramps and in and out of trucks.

It’s also worth investing in tracking technology for transportation methods, to monitor overall driver efficiency and diagnose potential problems before they become a larger issue. RFID technology is already used in several airports to track baggage. The technology is worth considering for any business that wishes to monitor transportation activities to ensure both efficiency and safety.

Radiation Safety

Excessive exposure to radiation can cause tissue damage that can result in severe injury or death. Ionizing radiation has sufficient energy — enough to ionize atoms that could destabilize molecules within cells, leading to tissue damage. With this in mind, if there’s any possible risk of radiation exposure, it’s important to leave the proximity immediately. Reducing time of exposure can decrease the dose dramatically.

Any potential exposure to radiation of any kind should have appropriate warning signs to encourage employees to wear personal protection, such as UV-blocking eyewear with side-shields, long-sleeved and tightly woven clothing that covers the full body and sunscreen with SPF of 30 or higher. Ionizing radiation at workplaces is preventable with lead-based materials, like lead aprons and spectacles created with lead glass.

Attire and precautions can go a long way in preventing radiation exposure, but if it occurs it’s imperative to vacate the premises immediately and seek medical attention via 911.

Chemical Safety

Chemicals can be dangerous and exposure may cause injury or death. Regarding chemical safety management, it’s advised for workplaces to label any potentially hazardous chemicals. In the same vicinity, there should be instructions for use, as well as precautions to pay attention to, such as evacuation procedures and methods for treating exposure.

The signs and symptoms of chemical exposure should be common knowledge among any employees, as they could potentially save lives with this knowledge.

Explosive Safety

Machines, chemicals, and various transportation methods are abundant at many workplaces, prompting a concern regarding explosions due to misuse or electrical malfunctions. Routine electrical inspections should be made to prevent explosions. If there are any actual explosive or related materials on the premises, they legally must be stored in approved facilities, as required by the Bureau of Alcohol, Tobacco and Firearms regulations contained in 27 CFR part 55.

In addition, the explosive material can never be stored underground if there is only one mode of exit. Smoking and open flames are also prohibited within 50 feet of detonator store magazines and explosives.

Machining Safety

Machines play a large role in many workplace facilities, with forklifts, factory vehicles, and automation machines being a common sight. While it’s common sense that the machine’s operator should be fully educated on maneuvering the machine, it’s also important to notify surrounding workers of potential risks.

Additionally, employers shouldn’t provide access to machines for those without the clearance. Untrained workers should have no access. If in the vicinity, they should always pay attention to nearby machines and their operators.

Checklist for Training Aids and Inspections

OSHA provides a comprehensive checklist for inspections. Here’s an overview for training aids and inspections:

  • Implement a hazard communication standard for various types of accidents, so your employers and employees are aware of hazardous chemicals in the vicinity and how to protect themselves.
  • Have an emergency action plan, with certain scenarios in mind. Protocol for radiation exposure, fires, explosions, transit mishaps and injury should be universal and known. A fire prevention plan, in particular, with an outlining of a fire exit route and various exits is a must.
  • Ensure walking and working surfaces are in shape and abide by OSHA regulatory standards. Falls from heights are among the most common workplace injuries and often the most easily preventable.
  • Provide first aid and medical equipment commensurate with potential workplace hazards while informing employees of medical and first-aid locations and how to contact further help.
    Take a look at the most frequently cited OSHA standards to gauge potential areas you may have missed that are commonly cited among negligent businesses.

By being comprehensively aware of various hazards and how to prevent and react to them, workplaces can provide employees with a safe place to work, which will encourage productivity and prevent potentially catastrophic mishaps.

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Permanent link to this article: http://www.apriso.com/blog/2017/01/what-you-need-to-know-a-manufacturing-safety-management-guide/

Dec 15 2016

Philippe Virlouvet

Will MES/MOM survive the IIoT world? Looking at a future where everything is smart.

In my last blog, I explored the growth of smart devices, big data analytics, and the cloud, and what these technologies mean to operational systems such as MES/MOMs. Briefly, I suggested that MOMs will continue to drive operations for several years, but will have to evolve and adapt as edge technology and the IIoT continue to advance.

Now I want to look at the longer term. How will this interaction between operational systems (OT) and information systems (IT) play out in manufacturing enterprises over the next 10 or 15 years? Will MOMs, or any operational systems, even survive the IIoT?

In a world where every asset is smart and connected, there may be no operational “driver” as we think of it today.

How will Smart Connected Assets and Smart Connected Operations interact? Will they be independent or closely coupled?

We are only at the onset of smart connected devices, but already we can begin to see the impact and the coming convergence of the OT and IT spheres of influence.

For example, Supervisory Control and Data Acquisition (SCADA) and Data Historian vendors are trying to expand their footprint through mobility and intelligent devices, moving into operational realms normally controlled by MES or MOMs. And why not? If a SCADA vendor can interact with various devices and has smart analytical capabilities to answer questions about how a device is used, then it can control areas of operations related to it.

Smart connected assets will blur the lines between assets and operations in many ways, because this evolution will bring real benefits to manufacturers. Consider maintenance. Intelligent assets will reduce downtime by better detecting anomalies or impending failures by capturing and analyzing on-site data to make real-time recommendations, directing and scheduling maintenance teams, and perhaps even changing production flow to work around repairs.

This convergence of smart connected assets and operations will impact all areas within the factory. Raw materials, equipment, personnel, operations, suppliers—they will all be intelligent, connected, and capable of interacting in any way needed to improve efficiency and respond to shifting conditions and demands. These capabilities will involve new challenges, such as firewalls and security issues on the shop floor between manufacturers and products, but they will also enable increasing industrial partnerships and collaborations.

What new mutualized business services models will be possible between companies that use Smart Connected Assets to perform their Smart Connected Operations?

The factory floor isn’t the only thing that will change. Smart connected assets and operations will change how companies do business with each other. We can imagine all vendors making and monetizing their services to do what we now call MES.

I gave the example of SCADA above, but it could apply to any asset or operation. When devices are sharing information in a fully digitalized environment, every device and every vendor will have a holistic view of its use and the operations around it. This will create new opportunities for every vendor.

Take an aircraft engine turbine, for example. The engine manufacturer could remotely direct repairs by working through on-site operators (perhaps using wearables that display dashboard recommendations). This repair service could be offered for free in exchange for data about the engine’s usage.

This type of collaboration can easily be transferred to any factory or relationship. Manufacturers that use smart connected devices and operations will have important leverage with their vendors—the ability to share valuable usage and operational data to help improve and support their products. In turn, the vendors will have leverage by offering expanded services made possible by smart connected devices. The result should be a true win-win business model based on trading services for data.

Will MOM systems survive? Or is the future some cloud-based platform that consolidates interconnections between diverse smart systems?

It should be clear by now that once every device is smart, operationally aware, and connected, factory processes can be driven from anywhere. In this future world, will there be a place for MES/MOMs?

MOMs will surely be a key transitional technology at the very least. But over time, these systems may evolve into something else, such as a collection of applications in the cloud. Whether or not there is a MOM, information will have to be streamed to the cloud, in conjunction with an advanced analytic model that can cull unneeded historized information.

We might expect to have dedicated data lakes that will consolidate a holistic view of various data sources across the company. These data lakes could be instantiated or referenced in several situations according to programs/projects/product exchange and sharing. Conceivably, any asset could access and use this data at the edge to make decisions and direct operations.

All of this will no doubt disrupt the ISA pyramid a great deal and flatten the L3 application landscape to a more horizontal set of apps and services, possibly hosted by major IoT platform vendors.

Conclusion

We can look to a steady convergence of capabilities as everything becomes smart and connected. Vendors will realign to meet this new reality, with every product potentially becoming the “driver” of manufacturing operations. CAD/CAM, SCADA, PLM, ERP, Big Data, Edge Analytics, MOM—any or all of these categories could end up running a factory.

However, there’s another possibility—that there will be no driver at all in the conventional sense. Just as we see driverless cars merging onto our highways, we may someday see driverless manufacturing plants that act almost as living organisms, with each smart device or “cell” responding immediately to stimulus (demand or problems), communicating with other cells, coordinating responses, and directing activities on their own far more efficiently than is possible today.

This kind of future can seem daunting to a manufacturer. How will you get there? I think the answer is actually simple: the factory of the future won’t be built; it will evolve as manufacturers demand more integration and information sharing, and technology vendors respond by making their products smarter and more connected. (Here’s an interesting video on YouTube, with Rodney Brooks of Rethink Robotics explaining how the digitalized factory might evolve from the bottom up.)

But whatever the future of manufacturing turns out to be, one thing is certain: it won’t be like the present!

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Permanent link to this article: http://www.apriso.com/blog/2016/12/will-mesmom-survive-the-iiot-world-looking-at-a-future-where-everything-is-smart/

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