CI DILEMMA APRIL 2020
CI Dilemma
Smart spending
A new managing director wants to bring their factory into the 21st century, but is unsure
where to start with the investment
I ’ve recently taken up the role
of managing director at a
pharmaceutical manufacturing
company. After spending a bit of
time learning how the shopfloor
operates, I’ve decided that the
manufacturing process is very
outdated – something that has
become even clearer with the
emergence of Industry 4.0 and
so-called ‘smart’ manufacturing.
The basic concept of Industry 4.0
is something that I understand, having
implemented an automation project in
my previous role; however, I do not know
Sponsored by:
how I can go about utilising this in
my current company. I have money
to spend so I can bring my factory
into the 21st century.
First off, there is no question that
a new ERP system is required, to
allow me keep check on all aspects of
the business and help me analyse data
for a better business performance.
Over and above this, though, I’m
currently unsure where to invest my
money next. Obviously I – and the
board – want to see a positive return
on any investment that we make.
Where should I start?
CI Solution Andy Watt, MD & Theory of Constraints expert, Goldratt UK
It seems to me that you have a great
opportunity to develop your company and
really utilise the benefi ts of Industry 4.0.
You’re already a step ahead by identifying
that a new ERP system is required, and
you are right in suggesting it will give you
a great overview of potential issues that
could occur. However, to maximise plant
effi ciencies and reduce downtime and
waste, it’s likely that some form of
Artifi cial Intelligence (AI) will need to
be deployed. Industry 4.0 can bring about
several benefi ts, such as freeing up senior
staff who may currently be fi re-fi ghting
and improving overall plant effi ciency.
However, in order to really optimise any
investment, the location of production
assets and the overall plant layout is key.
As a result, we can follow the Theory
of Constraints’ fi ve ‘focusing steps’ to
maximise the impact of your investment.
Step 1: Identify your system bottleneck
(or Constraint): a resource that is holding
up your production line’s fl ow and starving
machines down the line. It can also create
a signifi cant level of Work In Progress
(WIP) as it cannot process all of the upstream
work quick enough. Whilst this
might sound simple enough, it should
be noted that there is a high level of
importance at this stage due to the impact
it will have on the implementation of any
Industry 4.0 initiative. This is because
the holistic view of Industry 4.0 is able
to consider not just data collection and
management but also the physical layout
of production lines which will give
maximum effi ciency and reduce the
impact of your systems bottleneck.
Step 2: Exploit what you have.
Having identifi ed your
bottleneck, give it some
attention! Don’t be tempted to
go straight out and buy a new
machine. You could save on such
a big outlay by spending money on
automation accessories such as sensors
and automation controls. Plant-level
information is key to implementing AI
and creating a smart operation. This
allows you to gain full transparency and
predictability of both the bottleneck and
overall plant effi ciency. Another key
benefi t is the ability to introduce predictive
maintenance models, this will both
minimise downtime and boost capacity.
Step 3: Subordinate to the above. Give
your investment the best chance to
succeed and increase your output by
subordinating what you do to this
bottlenecked resource. Utilise your AI
system to identify and predict maintenance
activities and allow it to schedule work
released into the system at the pace of
the constraint, this will reduce the amount
of WIP up stream and increase output.
Step 4: Elevate the bottleneck. Having
followed steps two and three, you might
have found that your bottleneck has
moved; if not, you might have to
consider upgrading the machine
or asset – but don’t fret, the road
to smart manufacturing can be
long and often begins with
small steps. By identifying quick
wins along the way that provide
a return on investment, the process
becomes visible and believable and
stimulates further investment to continue
on the journey.
Step 5: Repeat. Don’t let inertia become
your bottleneck. If you have completed
these steps you may fi nd your bottleneck
has moved, due to the high effi ciency at
this resource. As a result, it is important
to go back and fi nd out where your new
bottleneck is and return to step one.
This is so new smart components and
machines can be installed in your next
constraint/bottleneck. As you develop
your plant, your new ERP will all gradually
link up for a fl uid and organised smart
manufacturing process.
HAVE YOUR SAY: Do you agree with our expert? How would you prepare the factory for the rise of Industry 4.0?
Send us your views and you could appear here next month. Email: chris.beck@markallengroup.com
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