Manufacturing’s New Golden Age: Are you Ready?

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By Russ Banham

Chief Executive 

Who says manufacturing in the United States is dead, shriveled up and blown away toward distant lands where manual labor is plentiful and cheap? Far from it. The country is at the threshold of a new golden age of manufacturing, one in which the physical and virtual words of production are integrated.

This connected ecosystem is called Industry 4.0, although other terms like SMART Manufacturing, Manufacturing 4.0 and The Fourth Industrial Revolution have been used to describe it. By embedding sensors and semiconductors in factory equipment and integrating this data with similar information coming from other activities and sub-systems across the value chain, manufacturers are making more functional products closer to customer demands, resulting in greater productivity, shorter times to market and higher profit margins.

“By capturing and analyzing the large data sets produced by intelligent machines across the supply chain, manufacturing capacity can be deployed more efficiently and cost effectively,” says Gaurav Dhillon, cofounder of data integration powerhouse Informatica, and currently the CEO of SnapLogic, a data integration platform-as-a-service provider. “Sophisticated algorithms can be applied to this wealth of data to glean insights into new production concepts and persistent problems like bottlenecks or product defects, pinpointing areas of improvement.”

Dhillon dubs this modern system of manufacturing “Turbo-Six Sigma,” borrowing the well-known set of management techniques intended to improve business processes. Now with
Internet-enabled sensors and algorithms, manufacturing processes can be improved at light speed, he says.

General Mills: An Early Mover
Large companies in the aerospace, automotive, chemicals, mining, consumer products, pharmaceutical and electronics industries, among others, imagined this future first, making the necessary investments in talent and research to bring it to fruition. A strong case in point is General Mills. “We’ve been on a journey for 25 years to achieve the goals of a connected enterprise,” says Jim Wetzel, director of global reliability at the $16.6 billion consumer foods manufacturer. “It’s not like we flipped a switch and here we are.”

It’s been an expensive trek, given the cost of technology a generation ago. “In 1993, the large TV you can buy today at Costco for $300 cost $4,000,” Wetzel says. “This order of magnitude exists across the spectrum of other technologies. Something that cost $100,000 now costs $10,000. And what used to take a year to develop now takes a month.”

Consequently, “midsize and smaller manufacturers can achieve much of the connectedness, visibility and optimization of the ‘big boys,’ but at less price and greater deployment speed,” he adds. By deploying and connecting smart technologies across its value chain, General Mills reaps value at different points along this spectrum.

As an example, Wetzel cites the impact on the company’s top consumer foods brand, Cheerios. Made from oats, the well-known cereal should have been naturally gluten-free—a plus for many consumers. However, at various points “from field to fork,” Wetzel says, the oats came in contact with grains like wheat and barley that contain gluten.

Where this contact occurred was difficult to pinpoint. Farm fields may have a rogue barley plant growing amid rows of oats because of strong winds blowing seeds from another
field. Farm equipment like trucks, grain siloes and railcars may have residue of non-gluten grains that adulterate shipments of oats. “Even though the oat crop started off pure and gluten-free, by the time the grain comes to the factory to turn into Cheerios, it may not meet the FDA gluten-free requirements,” Wetzel says.

The importance of the Cheerios brand to General Mills, insofar as its naturally gluten-free composition, elevated the need to solve the foreign grain problem. Filtering out the
non-gluten grains at the factory was too expensive, as barley looks a lot like oats. Much of the oat grains were lost through this procedure. The answer was to improve this process by combining today’s information technology and grain separation methodologies.

By connecting the grain supply chain to achieve visibility, every step of the grain conversion process can be controlled and optimized to ensure the integrity of gluten-free. “We’ve connected the farming co-ops and the grain elevators and all the other supply networks to track the genealogy of the oats as they traverse through the system,” says Wetzel.

Leveraging cloud-based information technology and a Smart Manufacturing platform, General Mills gained visibility from the field through the point of the product becoming Cheerios. “We have procedures in place to measure the amount of gluten and remove the source to ensure gluten-free perfection,” Wetzel says. Gluten-free Cheerios are now sold across the world.

Pfizer: Tackling Transparency
Like General Mills, Pfizer has long been engaged in increasing its productivity by enhancing visibility into its supply network. Five years ago the $48.9 billion pharma company
developed a master plan to shift from isolated operations and plants to an integrated, end-to-end, transparent value chain leveraging Smart Manufacturing processes across the product lifecycle.

This “audacious plan,” says Alton Johnson, vice president, global technology services, is reaping an increasing harvest of innovative and efficient production concepts at reduced cost.

Among these bold initiatives is a novel medicine factory Pfizer calls PCMM (Portable Continuous Modular Miniature). “While we have long pursued advanced manufacturing and
continuous processing capabilities, we had relied solely on fixed brick-and-mortar assets to make our products,” explains Johnson.

That was fine until the need arose to produce medicines for patients in a geographic region proximate to where they are located, such as gene-sequencing medicines derived from a patient’s cells. “To serve these patients, many with rare diseases and cancers, manufacturing facilities need to be closer to the point of use,” Johnson says.

That’s where the modular plants come in. Unlike a traditional brick-and-mortar factory, the small, portable, manufacturing units can be deployed anywhere in the world and quickly assembled to meet local patient or business needs. Encased within each mobile manufacturing unit is real-time process monitoring. Other advanced manufacturing innovations in the PCMMs include process analytical technology (PAT), a mechanism to design, analyze and control pharmaceutical manufacturing processes to ensure critical quality attributes, and predictive closed-loop controls integrated across the manufacturing process to decrease the time it takes to make a tablet from days or weeks to minutes.

At the same time, by developing both clinical and commercial processes in the same PCMM unit, Pfizer cut the time normally required to scale-up processes, while eliminating many process, quality and compliance risks.

Aside from the business benefits, the PCMMs present enormous societal value. “If we have an early signal that a new cancer medicine may be effective and can move the product through clinical trials quickly, we need the infrastructure and quality systems to manufacture the medicine just as fast,” Johnson says.

The first products developed using PCMM technologies are expected to be available commercially within the next year and one-half.

Arconic: Pinpointing Problems
Another company connecting machines and people across its manufacturing value chain is Arconic, a global manufacturing, technology and engineering business formed when Alcoa split into two publicly traded companies last year. Key customers include the aerospace industry, which has increased its use of aluminum in airplane construction. Boeing’s new 777x aircraft, for instance, has an aluminum fuselage and a ladder-like internal structure of aluminum ribs that connect the front and rear spars. Such advanced products require delivering on extraordinarily precise dimensions, tolerances, durability and other desired properties, while also meeting the industry’s exacting timetables.

Arconic is leveraging Big Data and advanced control and predictive modeling techniques to improve its processes. It achieves this by embedding Internet-enabled sensors in the production centers across its downstream operations, which then connect and communicate with each other. The effort is already paying off.

“We had a production center in one of our facilities that was the main bottleneck to meet increasing demands,” says Haresh Malkani, senior manager, manufacturing intelligence
and automation technologies at the company. “Thanks to our manufacturing intelligence system, we were able to access and visualize information from this production center in real time to discern the problem and fix it.”

A key contributor to the problem was an undesirable dimensional attribute that constrained manufacturing throughput. “We used a vision-based system to quantify the dimensional attributes, combined with a physics-based predictive model to develop optimized operating [instructions],” explains Malkani. “We then deploy the solution in an adaptive control loop to improve the dimensional performance and ultimate throughput.”

In the past, identifying the cause would have entailed manual investigations and experiments taking weeks to conclude. “Now this information is available to us live, in real time, to do the troubleshooting immediately,” says Malkani. “We’re getting the right data, at the right time, in the right form to the right people, resulting in enormous
productivity improvements.”

Broadening the 4.0 Boost
While these large manufacturers have become smart factories, many small and mid-size manufacturers (SMEs) are still in elementary school. “Midsize manufacturers tend to be laggards in terms of productivity and are struggling with where to make the right investments in Industry 4.0,” says Sree Ramaswamy, a partner at the McKinsey Global Institute, where he leads the manufacturing research practice.

However, SMEs can realize tremendous benefits from investing in Industry 4.0, says Peter Guarraia, a partner at Bain & Company and senior leader of the firm’s manufacturing and global supply chain practices. “What used to be solely the provenance of big industrial concerns is now at advantageous price points for much smaller manufacturers.”

With the costs of these different technologies rapidly falling, manufacturers of any size can optimize their production processes. By turning dumb factory equipment into smart
machines, midsize manufacturers can also access and analyze the flow of digital information coursing up and down the value chain. This is not an entirely new concept. Information has always driven the process of manufacturing—the physical object created from a design drawing. By digitizing the design, the drawing can be communicated to intelligent machines across the supply chain to execute it. Meanwhile, these sources of data are connected and integrated for analytical purposes, generating more insightful manufacturing decisions.

To smarten up, Craig Dissy, who leads the Manufacturing Competitive Initiative at Deloitte, says that midsize manufacturers must recruit and hire workers with the specialized
technology and engineering skill sets required to plan, build and manage these new systems. “Today’s golden age of manufacturing requires a different set of capabilities,” says Dissy. “Midsize companies must go head-to-head with much larger competitors to successfully recruit software engineers in Silicon Valley and elsewhere that have Smart Manufacturing knowledge and expertise. If they don’t do this, their competitors will, giving their customers new product capabilities at lower costs.”

Talent recruitment isn’t the only challenge. The proprietary nature of the standards supporting many Industry 4.0 applications presents data integration issues. Manufacturing consortiums like the Smart Manufacturing Leadership Coalition are working to even the playing field. The coalition has developed an open smart manufacturing platform enabling manufacturers of all sizes to easily and cost-effectively access open source Industry 4.0 technologies.

Fortunately, time is on the side of midsize manufacturers. “If Industry 4.0 is a nine inning game, we’re in the second inning,” Guarraia says. “Digitization is and should be an evolutionary process.” He advises CEOs of midsize manufacturers to steer their companies toward a point on the horizon three to five years away. “Expect to experience a non-linear journey with mistakes and slipups along the way,” says Dissy. “The goal is to hold tight to that vision of the horizon.”

The bottom line is that manufacturing is alive and well in the U.S. “Manufacturing used to be viewed as dirty, dumb, dangerous and disappearing,” says Deborah L. Wince-Smith,
CEO of U.S. Council on Competitiveness. “Now, it’s smart, safe, sustainable and surging.”

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