MANUFACTURING BLOG

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meditations on manufacturing written by our team of industry insiders
By David Oeters • January 4, 2017

2016 Year in Review for Manufacturing Technology

Future and Past WEB 010214.jpgAt first glance, 2016 was a year of promise linking production priorities with emergent technologies.  Speculation was rampant with industry buzzwords flying fast and furious – Smart Manufacturing, Industrial Internet of Things (IIoT), the Digital Thread, Data Mining, Cloud technology.

What is lost in the speculation of 2016 is the technical and industry hurdles we need to overcome before the speculation becomes a practical reality for our industry. Consider this:

  • The Industrial Internet of Things (IIoT) will use machine sensors and automation to better manage production processes, identifying and eliminating problems before they happen…once we determine the format and infrastructure of the IIoT, significantly lower the cost of integration, and agree on how security will be managed.

  • Cloud-based apps offer companies the chance to reduce capital and infrastructure expenses and manage software remotely...as long as they relinquish control of their data and apps to the service providers and accept increased costs and potential downtime.

  • Smart Manufacturing heralds the convergence of Information Technology (IT) and Operations Technology (OT)…so Production Managers with enough time, resources, and a willing and able IT resource to implement and support smart, connected devices can improve production outcomes.

  • Manufacturing customers see the promise of collaborative manufacturing and customization, and are expecting more from manufacturers, and manufacturers are using 3D printing and digital PLM tools to provide flexibility not found in traditional manufacturing processes…hoping they can maintain margins while frantically searching for new value streams to improve profits.

A Dose of Manufacturing Truth

As exciting as it was to speculate on the future in 2016, we’ve ignored the current manufacturing truth faced by many companies. Businesses don’t need speculation, they need practical solutions.  According to a study by Adobe, 82% of the companies still rely heavily on paper.  Four out of five businesses say they are trying to use less paper, but a third of the companies actually used MORE paper.  These companies aren’t thinking about the Digital Thread, they wonder how they can continue supporting their business.

An operations team struggling to manage massive paper build books and unsure how to access the latest revision of production plans isn’t considering smart-connected machines.  A company with a single, overworked IT resource isn’t ready for a Smart Manufacturing strategy.  A shop floor supervisor struggling to identify shipping dates and manage production schedules isn’t thinking about IIoT.

 The solutions our industry is focused on and the suppliers offering them are still years, perhaps even decades, from providing a viable application for most manufacturers.  For example, an IIoT solution will require new machines, sensors to integrate with a shared database, a common machine language for all those sensors, a tool for mining the information for actionable data, and a method of automating the process. Currently, it’s expensive, with only limited applications.

The largest companies, with the money, resources and time to devote to speculation, are exploring the options and opportunities. Often, the goal is to monetize the technology and offer it on the market as a product or module for an existing application. The company hasn’t even worked out how to use it in their own processes.

Where We Were in 2016

Rather than speculate, I’d like to take an honest look at 2016.  Let’s see where our industry is now, rather than 10+ years from now.

MES_Success_WEB_082813.jpgWe’ve come across companies that have implemented an MES, or have stitched together different applications to remove paper from their processes and better manage and record manufacturing digitally.  Today, these companies are working to improve their processes, optimize production, and further support the manufacturing value chain.

The push to further optimize can lead to additional risks.  Companies are working toward integrating their software systems, such as ERP, PLM and ERP, through a single system.  Most of these projects have run into trouble, as the complexity of the integrated software slows, rather than supports, enterprise processes.  Brian Carpizo, a Team Lead with Uptake, an IIoT company in Chicago, described the problem in an article in Forbes as “… the converged IT/OT world does not lend itself to one-vendor systems of record or some kind of mega-ERP. The problem is just too complex.”

CIMx regularly works with companies struggling with inefficient, legacy software systems that should have been retired years ago.  These companies purchased manufacturing software during the advent of MES in the early 1990s; some built their own systems using Microsoft Access or other computer software. These early systems used custom code, making it expensive and difficult to upgrade. 

Today, companies still using that old software pour more money and resources into maintaining the inefficient status quo, a logic fallacy known as a “sunk cost” that blinds businesses to the opportunity for improvement. Continuing to wait leads the company further into Technology Debt.  These companies are looking for a smooth transition to a new system.

Finally, there are a significant number of manufacturers still clinging to traditional, error-prone paper-based manufacturing. From our experience, whatever the reason for waiting each year to implement even a simple software system to better manage production operations, the company falls further and further behind their competition. Often, management doesn’t realize how easy and inexpensive a possible software solution is to implement.

A Bridge Forward in 2017

I’m not arguing against Smart Connected devices and technology. Technology will have a positive impact on manufacturing, now and in the future.  Automation and the IIoT are promising, and there are companies leveraging the Cloud to improve current business outcomes.

But to focus on technology still years away from practical application while ignoring the struggles of the majority of the industry in 2016 isn’t really putting your audience’s interests first.  We’re excited by the opportunity new technology offers, and we’re looking at ways to best utilize it in our product offerings, but in no way was this reflective of the work done in 2016, or the status of manufacturing last year.  

A review of the year should focus on the business, and not the future.  There are tools out there now to help businesses still relying on paper and inefficient technology.

Next week, we’ll take a close look at what you can do in 2017 to deliver a positive impact on your business.