The digital gap in manufacturing: Part 1, why production organizations lag behind

Guest post written by Dr. Werner Smekal, a technical consultant with many years of expertise in production, change management and supply chain management.

 

Is manufacturing truly going digital? While terms like Industry 4.0, IIoT and the smart factory get thrown around a lot, the reality is that many small to mid-sized production organizations are still drowning in paper. Even in companies that have embraced digitalization, there is often a huge digital gap between production and the rest of the organization. Why is that? Is digital transformation really all that important when it comes to manufacturing? What types of manufacturing are the most challenged? In the first of a two-part series we’ll take a look at these questions. In part two we’ll see what can be done about it and talk about several use cases for digitalization that address common low-hanging fruit in manufacturing organizations.

 

Production is behind the digital curve

There are many reasons why this digital gap exists. First of all, it’s relatively easy to make a business case for digitalizing data- and knowledge-based processes like finance, purchasing and sales. The use of technology is a logical step; the benefits are clear. So sales gets a CRM and finance gets accounting software.

Or the company takes the next big step and implements an ERP system. This is a great move since now everyone is on the same system; data is much more reliable and everyone is more productive. Well, except for production. In a typical ERP implementation all other departments are forced to fit themselves to the ERP system; but production can’t, since they are bound to physical processes.

What’s worse, the value of digitalizing production is less obvious. Manufacturing is a physical process dealing with physical things, and on the surface it seems to have very little to do with numbers and data. It generally works; product gets built, orders get filled. Why throw money at it? So even when production asks for IT resources, they may be denied or they get just a limited IT budget.

On top of that, consider the type of person who chooses to go into production. They tend to be technical experts, machine operators, handworkers. They care about things they can put their hands on; their skills are to do, make and fix. The last thing they want to do is to stare at a screen. Even production managers have often risen through the ranks and so often share this mindset. And the lack of experience with IT systems also makes it harder for them to imagine digital solutions to their problems in order to make a good case for digital transformation.

 

Even ERP can’t fix it

And assuming production is included in an ERP system implementation, ERPs were designed with the office in mind, and it shows. Most systems fall flat when it comes to meeting the needs of the shop floor. For instance screens are often too complicated; the operator who just wants to get stuff done will be frustrated sifting through 50 fields to get the one piece of data he needs. If it’s not easy, it won’t get used. This is all complicated by the perception that “production isn’t digital”; as a result, the shop floor often gets stuck with older, slower computers that might not even be networked.

So as a result, paper still rules. From booking the work completed each day to QA documentation to reporting problems, someone is writing it down. And not only that – someone else has to process the paper, resulting in wasted time and a high chance of human error. Even when the shop floor is given computers the software is typically frustrating at best; it doesn’t provide the simple user experience production workers need. Quite often such software goes mostly unused by employees who, after all, just want to get things done with no fuss, and so they find an analog workaround. Meanwhile, the time production workers spend filling out forms or at the computer can cut significantly into productivity.

 

Standard solutions solve part of the problem

Of course, a wide variety of standard software solutions are available to address common manufacturing problems, and some of them are well-designed and easy to use. Particularly in repetitive manufacturing, where production lines are optimized to churn out high volumes of the same product year after year, standard software may be adequate to meet their needs.

A manufacturing execution system (MES) in particular can fill many of the gaps, acting as a data hub between the shop floor and the ERP system. Standard production processes can be monitored, managed and optimized.

But especially for companies that make a wide variety of different or customized products, some customization is still unavoidable. In such organizations, production lines have to support a variety of setups and changeovers in order to make different products. Products may be frequently updated to keep up with new standards, new market conditions or new technologies. In many cases production also requires a variety of equipment operated by workers with different specialized skills, so that you can’t easily move people from one station to another.  And contract manufacturers who build products or assemblies for a wide variety of customers (like Foxconn, who builds iPhones for Apple) face the same problems, plus the additional burden of documenting their work to prove that customers’ detailed requirements are met.

 

Flexibility is king

As a result, manufacturing processes must be as flexible as possible, which makes everything from scheduling to quality control more challenging. This flexibility means that every shop runs differently, based on its own unique products, customers, processes and culture. The special processes a company develops to address flexibility and quick changeovers are often considered a key part of their competitive advantage. So when such a company goes digital, standard solutions don’t cover all of their needs.

In order to reap the rewards of digitalization, such organizations need to look to custom solutions. Unfortunately, ERP system customization or custom software development is an expensive proposition, especially when you consider the number of different manufacturing processes that could benefit, as we’ll discuss in detail in part two of this series. However, a new breed of tools known as low code platforms could fill the gaps between ERP, MES and other systems, enabling production organizations to affordably create the apps they need to manage their unique processes, to run more efficiently and to improve employee satisfaction.

 

Ready to take your manufacturing digital? Get a demo and find out how low code development can help you ease into the transformation. 

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Dr. Werner Smekal is an independent technical and management consultant with many years of experience in the semiconductor industry. He advises manufacturing companies, helping them to improve production, research & development, engineering and supply chain management.