Collaborative Manufacturing: A Keiretsu of IT and OT in the Manufacturing World

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By Vinay Nathan, Co-founder & CEO, Altizon Systems
Today’s manufacturing world is going through a great revolution both in terms of customer expectations like personalization and the technology to fulfill those expectations. The product complexity due to the combination of mechanical, electrical, and electronic/digital components and variations of the product itself are posing great challenges overall. Adding to this, the Manufacturing world has turned upside down with the introduction of digitization and Industry 4.0. Technologies like Internet of Things, Horizontal & Vertical value chain integrations, Cloud, and Data Analytics are making big waves. The boundaries, both inside the enterprise (between shop floor & boardroom ) and between enterprises are fast fading away. With Customer centricity as the goal, the extended digital enterprise is a reality; organizations are joining hands both internally between departments and with other organizations to provide value to the end customer. The result is Collaborative Manufacturing- a new age paradigm involving streamlining of end-to-end business and supply chain processes to create a comprehensive real-time information base for the decision makers to help innovate. A new Keiretsu is born.

As we take deep dive into collaborative manufacturing, a few trends are emerging that enterprise CxOs need to be aware of and make their contributions towards.

  1. Digital Benchmarking: So far, the vast majority of industry plants were running in silos in that there was the lack of real-time information and aggregated analytics across machinery and plants. There is hardly any data available on how each machine is working as compared to other same/similar machines within a plant and across the plants. As most of the plants expand over a period, they have set of heterogeneous machines from legacy to modern and from different OEMs. Moreover, component outsourcing is a critical aspect of manufacturing; often the product is an assembly of diverse types of components, outsourced from disparate vendors. In such situations, the quality, and effectiveness of all components plays an important part in the performance of the final product. However, most decisions are based on siloed derived data captured manually through limited automation. Hence there is a lack of benchmarking. Often, it’s not a product vs. product race but a stiff competition between one supply chain against another. To stay ahead of the curve, top level executives of enterprises need a technology that brings these factors on to a single platform by virtue of real time, error free data and enables benchmarking to avail deeper insights for proactive, dynamic decisions. There is a burning need to create and use such technologies that enable benchmarking, to invest in innovation, that will take industries to the next level of performance. With benchmarking at the machine level, plant level, and across multiple plants, enterprises will be able to calibrate their systems and predict throughput.
  2. Uber for Manufacturing Assets: Manufacturing is an asset-heavy industry, needing expensive/capital intensive assets and skilled workforce to operate them. A lot of times, significant assets remain under-utilized, resulting loss of opportunity costs. IIoT unleashes that opportunity, enabling the decision makers to take a holistic view on all the resources/systems and potentially freeing up these locked up resources for use by supply chain partners.
    A marketplace like a mode for costly manufacturing resources such as press machine, CNC machines, laser cutting m/c, milling/grinding, turning machines can be created to ensure that the assets are utilized to their full capacity. Various enterprises can come together to make available their costly resources to be shared with small/medium companies to bring down their overall cost and create an interesting business model of synergy. E.g.: In process industries like cement etc. where the return on assets is a critical part of financial performance, most prevalent capital intensive assets are manufacturing assets which are underutilized. In such situations, a Uber-like marketplace model can serve as a boon to the manufacturers. The sharing of costly resources not only will help gain higher capacity utilization but also enable small/mid players innovate rapidly with access to such costly resources at the affordable rate on a pay as you go model. There is a huge opportunity to build innovative business models and drive innovation through marketplace approach. Things that are not possible today just because you don’t have certain costly resources or the skills can with a marketplace approach, be made possible to fulfill customer needs using collaborative manufacturing.
  3. Mass Personalization for a Lot Size of 1: A few decades ago, the manufacturer dictated consumer options. As aptly said by Henry Ford “Customer can have a car painted any color so long as it is black.” Those were the days when the customer was expected to choose from the design & features given to them. Today, the customer is the king & the buying process is customer centric. Hence, to appeal to the end user, the output of the manufacturing process needs to be customized & personalized. This is the world where manufacturing needs to adapt to a Lot Size of 1. The need of the hour is to make manufacturing more agile & personalized while maintaining their cost advantage. Here is where software, with its dynamic nature, comes to the rescue. The software is now enabling all sectors to use a power of algorithms, digitization, realtime processing to create new products and be more proactive. A new kind of symphony that reacts to dynamic needs of its audience is now in play. A parallel can be drawn to the difference between Western classical music and Indian classical music. Western symphonies are lot more structured and repeatable than an Indian classical music performance. An Indian classical musician takes basic ragas and notes, and experiments as she performs. She senses audience feedback and dynamically responds to their receptiveness of her experimentation. No two performances are identical. Replicating this in the manufacturing world requires digitization of processes and assets for rapid prototyping of products and processes that respond faster, better and cheaper to these customer expectations of mass personalized products.

Benchmarking, Marketplace, and Mass personalization are just a few broad themes we can see, and there is a lot more to explore. Gone are the times of siloed manufacturing. Collaborative manufacturing is here to stay and is expected to usher in an era of agility, flexibility, cost effectiveness, supporting customer centricity & financial success essential for the enterprise of today. A new Keiretsu is being formed where the Information technology world is in symphony with the Operations Technology world.