Focus on integrated manufacturing to improve manufacturing operations

Around the globe, manufacturers are facing cost pressure due to competition and demand uncertainty. With the advent of Industry 4.0, manufacturers are focusing on low-volume manufacturing with more customized products and small-batch manufacturing to meet changing customer expectations toward more personalized products, forcing efficiency improvement for manufacturers.

To meet customer needs (resulting in more variants and shorter development cycle timelines, the responsiveness of the supply chain for fast go-to-market), improve the bottom-line (inventory optimization, better quality, less waste), and increase efficiency (more machine availability, the scope of customization), manufacturers need more control over value chain activities, fueling the need for integrated manufacturing. Integrated manufacturing requires integrating the value chain activities and more collaboration between business functions. In this PoV, we discuss how manufacturers can integrate their operations value chain activities and provide guidelines that manufacturers should follow to implement integrated manufacturing in their organizations.

The manufacturing value chain includes design and development, testing, shop-floor operations, supply chain, and support services. Integrated manufacturing combines all of these value chain activities, as Exhibit 1 describes.

Exhibit 1: Integrated manufacturing includes end-to-end value chain activities

Source: HFS Research, 2020

ISA -95 framework is the guiding principle in integrated manufacturing

ISA-95 is an international standard for enterprise and control systems integration for the manufacturing industry. It bridges business strategy and manufacturing operations across both discrete and process industries. It defines five levels (Level 1: Sensors; Level 2: PLC, DCS; Level 3: SCADA; Level 4: MES; Level 5: ERP) that connect technology and business processes.

Combining product development with the framework to integrate product lifecycle management and manufacturing automation and IT support systems (SCADA, PLC, MES HMI, ERP) can be truly beneficial for manufacturers, as the combination covers the entire spectrum of a manufacturing operation.

PLM-MES-ERP accelerates the integrated manufacturing journey

Typically, manufacturers leverage some form of PLM (product lifecycle management), MES (manufacturing execution system), and ERP (enterprise resource planning) software to manage their manufacturing operations. In some cases, they use the standard versions of the software available in the market, and in others, they use in-house-developed software or software such as PDM and scheduling applications, which have limited functionalities.

PLM is used for product design and development, MES for manufacturing operations in the shop floor, and ERP for support functions (finance, HR, etc.), supply chain, and overall operations management. Integrating these three entities facilitates data exchange, enabling more visibility and transparency, increased traceability, and improved decision making. The integration also creates a digital thread that connects the product lifecycle (design, testing, and services lifecycle), manufacturing lifecycle (production controls, scheduling, quality, continuous improvement initiatives), and broader operations lifecycle (supply chain, payments, plant management).

Four actions are imperative for building integrated manufacturing

Manufacturers can focus on these four guidelines, which address people, processes, and technology, to realize the integrated manufacturing goal.

• Break the silos: Most manufacturers still rely on the waterfall development model, so different manufacturing functions are responsible for different areas of development, with less interaction among them. Thus, manufacturers must encourage and promote an agile development model for more collaboration, enabling enhanced design and development, shortening the development time cycle, and improving the customer experience.
• Develop data management practice: Organizations from some of the highly regulated sectors, such as pharmaceuticals and life sciences, food and beverages, and chemicals, maintain the data log for quality and regulatory compliance purposes. Most of the discrete companies are yet to capture all the data points of their manufacturing operations. So, manufacturers should focus on creating a “data ingestion engine” to improve their organization’s data management practice. The next step should be deploying data analytics and AI models to derive actionable insights to improve different aspects of manufacturing operations, including design and development, testing, and supply chain.
• Build a strong IT system: Manufacturers should encourage both data capturing across manufacturing operations and data sharing among different business functions. They should also focus on modernizing their IT systems by introducing cloud computing and APIs (application program interfaces). Cloud computing is useful for data storage and computation, whereas API-based architecture increases modularity and decreases the application development cycle.
• Focus on talent management: The majority of the manufacturing professionals are well-versed with hardware technologies (mechanical, electrical, and other components). As digital technologies transform manufacturing operations, manufacturers will need to train their existing workforce in emerging technologies and recruit resources as needed. Manufacturers should focus on developing their workforce’s skills and their own organizational capability in the long term.

The Bottom Line: Organizational change management is the key for integrated manufacturing.

For a long time, different manufacturing functions worked in silos, which resulted in an internal and limited view of their scope of work. As the uncertainties (related to day-to-day business operations and disruptive events like COVID-19) in the business front are increasing, manufacturers must reimagine their operating model, including knowledge management, talent management, and IT systems to realize closed-loop of manufacturing.