By Mattias Andersson, CEO & Tord Johnson, CTO of MTEK
Manufacturing has never been more competitive or more dynamic. The recent COVID-19 pandemic has shone a bright light on the industry and the need for digital transformation to drive greater adaptability and agility, and as a result resilience to disruption. But perhaps more importantly for the long term future of the industry, digital transformation is needed to make all manufacturing companies perform better on the factory floor, with their customers, and as a direct result, in the boardroom!
Smarter manufacturing is good for business. There is a clear need to accelerate and simplify the journey to smart manufacturing. By doing so, companies will be more competitive, more efficient and will improve both factory and financial performance. In a recent webinar, moderated by industry journalist Philip Stoten, NOTE CEO Johannes Lind-Widestam affirmed that his company’s impressive results through the crisis we’re very closely connected to their ability to systemize factory performance improvements thanks to unlocking the data available on the factory floor. In the first half of this year, a very difficult period for most, NOTE’s sales increased by 16%, operating profits grew by 31%, operating margin grew to 7.7%. And in the last two years, the stock price has increased from around SEK 23 to over SEK 60.
Meanwhile every OEM or brand on the planet is reviewing their supply chain and manufacturing strategies. If manufacturers want to stay competitive, they need to focus on operational efficiency and digitalization. Design for supply chain integration, along with real data analytics that uses AI to create intelligent manufacturing capabilities are both necessary investments for manufacturing companies to be competitive in the future.
The most competitive factories will have continuous improvement strategies that impact both performance and quality, extracting every last percentage point of efficiency and ensuring the optimum yield and product quality.
Factories, and companies, that can blend real-time visibility through tools like digital twins and artificial intelligence, with a properly deployed automation strategy will be able to succeed regardless of their geography and regardless of the cost of local labor.
Many believe that the pandemic will accelerate not just digital transformation, but also consolidation in the industry and those that are able to power through the disruption will become more successful and those that are perhaps less able to weather the storm fall by the wayside or are acquired. This phenomenon of the leaders getting further ahead and the laggers falling further behind is common to major industrial and economic disruptions.
Having established the need to transform the next question is how, and what are the right tools to digitalize manufacturing?
Our view is simple, we believe there is an abundance of data in the factory, often locked in silos, like disparate departments or software applications or even specific machines. By liberating the value of that data, using analytics tools to convert that data into intelligence to provide insights, better decisions can be made faster. Companies can take what they have and make it much more efficient, driving better results on the factory floor right through to better financial performance and greater customer satisfaction and retention. That liberated data can be connected and contextualized. It is contextualized data that drives value across the entire manufacturing ecosystem, the entire product life cycle and in fact the entire enterprise.
We also believe that to attain digital transformation it has to be simple to see the results on each investment be that financial or time. We’ve created several digital building blocks that improve efficiency and performance, while delivering measurable ROI. In May we released our MCell Insertion, an adaptable automation system that allows manufacturers to convert a very manual task to an automated task and deliver real cost savings, along with quality and speed improvements. This month we are releasing our Factory Intelligence System, MBrain, taking a systemized approach to extracting the value locked in data, driving real performance improvements. MBrain is the result of decades of working with manufacturers to improve quality, efficiency, and overall factory performance.
The system has been designed to be intuitive for the user and to complement the existing software landscape. It connects to production machines and processes, linking operations to performance through cross process analytics, scalable across the entire enterprise. MBrain also simplifies continuous improvement with a real-time quality toolbox as well as streamline manufacturing planning, control and traceability.
Up until now there has been no intuitive way to accurately correlate cause and effect, and hence provide the feedback necessary to improve performance. With tools like MBrain manufacturers will be able to connect to any machine in the factory, correlating machine data with production output. This will allow manufacturers to continuously improve the performance and quality in each and every factory.
Post-pandemic, brands and OEMs will need agility and resilience from their outsourced manufacturing partners as well as from their own factories. It is highly likely that the most efficient factories will attract the most business from those that value quality, efficiency and the ability to serve them in multiple geographies. A digital strategy that takes factory data, unleashes the value of the intelligence in that data and provides the insights to continuously improve will become table stakes. Companies that do not invest in transformation will become less competitive and less attractive and risk irrelevance or worse extinction. Those that embrace change and transformation will prosper and grow to be the industry leaders of the future, continuously improving to extract every percentage point of efficiency while ensuring the highest quality and delivery performance and hence financial and business success.