Innovation and integration, 6 steps to reinvent your factory

Innovation and integration, 6 steps to reinvent your factory

Innovation and integration are important elements of sustainable manufacturing. Through six key steps, companies can reinvent their factories and make the transition to Industry 4.0.

To ensure a sustainable future, manufacturing companies need to focus on "innovation" and "integration," says John McGuire, chief innovation officer at AURECON, an international engineering design consultancy.

From a company's perspective, it's not financially viable to move production plants at a cost of millions of dollars per decade. Instead of looking for the next cheap manufacturing hub like "China" or "Vietnam," companies should be putting in the effort to innovate and find sustainable business models.

In recent years, the world has continued to warm up to the concept of German Industry 4.0, the fourth industrial revolution promoted by developed industrial countries. Similarly in the United States, the government's Smart Manufacturing Leadership Alliance is planning a national manufacturing future that will reinvigorate America's attractiveness to industrial manufacturing. In some other developed countries, manufacturing has also been revitalized to some degree as governments look at the economic growth, jobs and fiscal revenues that manufacturing brings.

Manufacturing innovation and integration Reinventing the factory follows six key steps

While the benefits of Industry 4.0 are clear, for integrated manufacturer and supplier offerings, I don't think enough focus has been placed on the most important factors affecting modern business tools - industry changes that have a significant impact on customer consumption trends.

The network revolution is breaking down barriers across industries, exposing once-protected traditional industries to the impact of the digital, information age. In the digital age, new suppliers must have the ability to cross all market segments. Those that enjoyed the comfort of isolation from competitors in previously protected markets, particularly in isolated geographies, will lose their edge with networked information technology.

In the past, those protected markets relied on productivity and cost reduction strategies to strengthen their position. But this business philosophy cannot succeed in today's digitally connected marketplace. Today's customers are somewhat digitally sensitive, and they not only like choice - they demand more of it. They know the marketplace offers a lot of choices, which allows them to access and evaluate different options to find the best fit for their products and services for their lifestyles.

So I believe that any manufacturer who wants to win must adapt to the changing needs of their customers. And manufacturers need to redesign their business around this and respond quickly in today's rapidly changing marketplace. Importantly, I think manufacturers need to incorporate more design-led innovation thinking into their business. This will allow manufacturers to access the heartfelt aspirations and needs of their customers. It allows companies to understand the emotional needs and pain points of their customers and subsequently develop products and services around those psychological needs.

Manufacturing innovation and integration Reinventing the factory follows six key steps

In my discussions with many global manufacturing executives I have found that there is no doubt that we are in a time of self-reflection. Companies need to understand not only what their customers want, but also where they are coming from and what influences them. With design-led innovation, the priority is to increasingly understand the "why" of customer thinking and to explore the emotional psychology of the underlying meaning and true purpose.

Knowing what drives your customers to buy is what develops successful products and services. This process is led by the designer and facilitates the use of a new way of thinking and a higher level of understanding. It also means that companies are able to address predictable problems early in the design process.

Transforming a manufacturing company can be a painful process, but in today's industry movement, there is no doubt that it is a necessity. 

I believe there are six key steps companies can take to reinvent their factories and transition to Industry 4.0

1. Adapt: Successful factory management generally focuses on one factor - keeping costs as low as possible. As Industry 4.0 evolves, the rules of the game will change. While cost remains an important issue, it is their management philosophy that will determine the success of the next generation of manufacturing companies. Rather than focusing on reducing labor costs and operating costs, manufacturers should look to technology, data and consumer behavior to guide their operations. With waning salary pressures in developed markets, such as the U.S. and the U.K., coupled with wage increases in other markets, factors that previously constituted a cost advantage will disappear potentially. With this in mind, it is time to retool facilities and operations to prepare for the new era of manufacturing.

2. Automation: The success of new-age companies will depend on a high level of automated operations. The field of robotics research and development has advanced significantly in recent years, and costs continue to fall. Intelligent robots can be programmed to recognize assembly parts and can perform many functions that are difficult to perform with the naked eye. Coupled with the increasing use of 3D printing, self-driving cars and energy storage, the original reliance on high productivity and common use of components will gradually shift to producing space according to customer-specific needs. In addition, this automation and embedded intelligence gives companies the opportunity to share more data and information with a large number of consumers. Giving customers access to internal company information creates a closer two-way connection and allows manufacturers to share information on factory management, safety standards, quality standards and environmental responsibility.

3. Connect: In the age of communication, it's no surprise that the most successful companies are those who are most able to connect with others. And it's not just closer connections with customers that companies need; the importance of better connections with suppliers is increasingly important, and is an essential part of coordinating manufacturing automation. The better the connectivity and communication, the smoother the workflow. We should also talk about connectivity in terms of the Internet. Modern factory designs use sensors and control systems working together to better manage supply chains, product production and operations. This takes machine-to-machine communication to a new level and is the key to a factory being able to successfully automate. Better management of supply chain, product yield and operations - this is taking machine-to-machine communication to the next level and is an important component for factory automation (see point 2).

4. Customization: Offering customers a choice is nothing new, but how manufacturing can do this has changed significantly. Modern factories are designed with modular processes that allow them to switch between products quickly and easily, changing and adapting in time to customer preferences or market conditions. As mentioned earlier, these smart factories also use robotics to assemble tools and components with more flexibility than traditional manufacturing processes. Consumers are looking for products that meet individual needs, and companies that can provide this need could see greater success.

5. Assessment: This is a time for all manufacturing to experience a series of intermittent changes. It has taken many even of the larger companies by surprise. Previous industry leaders like Kodak, Nokia and Saab are now beginning to reassess their businesses. What they lack most now is the ability to judge the situation - to see where the market is going and how to react. As the industry moves toward big data and analytics, companies should collect and process as much information as possible and structure their operations. With the prevalence of the Internet of Things, people rely on online reviews as much as they do on verbal presentations. Companies should use this information to re-evaluate a market that cannot be seen as a headline and react to it. With the move to big data and analytics, companies need to collect and process as much information as they can and use it to build their business. Companies need to use the information to reassess their position and as point 1 points out, they must adapt.

6. Innovation: Most companies understand that they need differentiated products and services in order to advance their industries, and innovation is an important way to achieve this goal. What the most successful companies also realize, is that they don't know all the answers. Bringing a rich base of expertise, different experiences and different perspectives is innovation itself. We live in an information age where knowledge is no longer the only source of generating advantage. Therefore, collaborating with strong internal and external people and innovating on top of that is the only shortcut that will help companies stay ahead of their competitors.

These changes are now expanding unstoppably across the globe. They are indisputable and unstoppable, and ignoring these trends will only hurt your business. Combining efforts to leverage them intelligently will allow manufacturers to gain a competitive advantage in this new era of industry.