Driving Operational Excellence in Manufacturing: Creating strategic advantage with advanced technologies
By Richard Seel, Managing Director, UK and US
As we enter a new decade, there is no doubt that the manufacturing industry continues to face uncertainty and disruption. Manufacturing leaders must look to create strategic advantage in order to become more resilient, and strive for operational excellence if they are to navigate the exponential pace of technology and change, and thrive in today’s competitive environment.
When we talk about operational excellence, we mean a set of principles which exalt continuous improvement and ways to find outstanding efficiency, greater agility and flexibility, enhanced visibility and intelligence with smarter collaboration. Shifting customer expectations, competitor activity and market volatility mean that it is difficult for manufacturers to achieve operational excellence and know where to invest to maximise the value of their operations. As a starting point, below are just a number of the key priorities for manufacturers looking to improve operational excellence:
- Increasing warehouse throughput with productivity and efficiency improvements
- Reducing costs without compromising quality
- Improving stock and picking accuracy
- Ensuring on-time, accurate delivery to customers
- Optimizing asset efficiency
There are a number of key driving forces behind the need for operational excellence. Customers increasingly expect high quality and accurate, faster delivery. Furthermore, there is a growing demand for highly individualized products, manufactured closer to the customer which requires efficient and agile operations.
Limited access to low cost skilled resources means that it is increasingly difficult to fill the growing skills gap. Attracting highly skilled talent is crucial for the longevity of manufacturing businesses. Today’s jobs and skills have been transformed by technology, and the industry continues to face the challenge of preparing its workforce to work with robots and advanced technologies.
Additionally, concerns surrounding climate change and waste reduction are challenging manufacturers to express a genuine commitment to sustainability by adapting their products and processes to ensure a more positive impact on the environment.
The age of digital transformation
The manufacturing industry is increasingly becoming innovative and empowered. Advanced technologies open up new possibilities for improvement and excellence, which if integrated and leveraged successfully, can present vast gains in competitiveness and operational efficiency.
Digital transformation in manufacturing processes continues to advance, and businesses are certainly tuned in to both the opportunities and threats that digitalization bring. As customers demand more of manufacturers, they must invest in technologies to gain the edge over competitors and win in their chosen markets. ERP systems along with, for example, improved autonomous decision making, can help businesses to streamline and optimize enterprise-wide processes such as production planning, stock management and finance and controlling. Slow adoption of such new technology can be a barrier however; effective change management is crucial in order to truly leverage the potential of new, disruptive technologies.We’ve identified three of the key trends that we think are transforming manufacturing processes and which can help manufacturers boost operational excellence.
1. Smart warehouses
The smart warehouse has evolved exponentially over the last few years by embracing innovative new technologies such as machine learning, intelligent human collaborative robot systems (COBOTS), autonomous robots, smart conveyers and sorting systems, wearables, RFID readers, devices and sensors.
Collaboration between humans and robots is not about replacing the human, but complementing and improving accuracy of both their operations, for example supplying from the warehouse to the production staging areas, or combining a repeatable manufacturing task requiring continuous intervention with a human, without a fixed separation between automated and manual activities.
Introducing smart warehouse initiatives will deliver quick, visible improvements to operations, where warehouse are struggling with availability of operational resources and stock accuracy, and where business are looking to expand quickly to meet new customer demand or create enhanced customer service offerings. Optimizing warehouse processes boosts productivity and reduces cost, and enables businesses to reassign personnel to value-added tasks.
2. Smart automation, machine learning and AI
Only a small number of manufacturers are realizing the competitive advantage of automation to enable agile and responsive manufacturing and supply chain processes.
Significant volumes of data are being generated within these manufacturing and warehouse operations sites, as well as the wider integrated supply chain with customers and suppliers. Using integrated connected data can enable both real time optimization and decision making, as well adaptable machine learning driving significant operational improvements in the warehouse and manufacturing processes.
AI is being used in warehouse management to tackle increasing demand by improving picking accuracy through the use of autonomous intelligent robots. Improved slotting and interleaving ensures optimized warehouse operations.
Why is smart automation key to operational excellence?
- Drives transformation in the business, improving productivity and driving up quality
- Achieves faster and more accurate decision-making during resource-intensive tasks
- Reduces health and safety risks, providing a better working environment for employees
- Allows better use of available resources in more productive activities
3. Digital Twin technology
The advent of digital twin technology has changed the face of manufacturing. The technology empowers manufacturers to model new, existing and alternative operational scenarios to quickly identify improvements and resource usage, as well as understand capacity constraints. Digital modelling allows the improvement process to become more predictable, reducing cost and optimising performance. Critically, the digital twin provides a risk free environment for training operational resources in execution and the subsequent maintenance activities.
Smart manufacturers should constantly be pursuing new ways to improve operational processes, improve decision making and transform the business to create strategic advantage, enabling cost optimisation while improving the quality of products, ensuring a safe working environment for the entire workforce, and providing a rapid, responsive and individualistic customer service.
Adapting the manufacturing or warehouse operations to include many of these new technologies and processes can help transform businesses to ensure growth and flexibility in an uncertain business environment.