Three Ways Industry 4.0 is Forcing Manufacturers to Rethink Lead Times

Manufacturing Engineering,
September 24, 2018

By Aaron Continelli

    Named the next phase in the digitization of the manufacturing sector by McKinsey & Company, Industry 4.0 is sweeping through manufacturing—combining connectivity with computational power and data for unparalleled capabilities. Here are three ways Industry 4.0 is forcing manufacturers to rethink one key metric: their lead times.

ERP Solutions

    An Enterprise Resource Planning (ERP) solution integrates processes and systems in one digital location. It streamlines production by providing instant visibility into inventory, materials, and supply chain. When areas for process improvements can be seen, changes can be made to fill orders, reduces costs, and cut lead times.
    Before implementing ERP, business leaders must assess potential pitfalls and get buy-in from all teams. A change management plan is essential for not only implementing ERP but also for ensuring company-wide adoption of the system. With comprehensive employee training, ERP can quickly become a powerful tool to help manufacturers reduce lead times.

Internet of Things (IoT)

    The IoT merges information technology (IT) and operational technology (OT) by allowing hardware to communicate with software and allowing different software systems to communicate with each other. For manufacturers, IoT usage has focused on improving operations. Having real-time information allows manufacturers to make decisions based on predictive analytics. With the IoT, manufacturers know ahead of time when machines may need maintenance or repair, or when there are supply chain delays. This helps manage inventory and adjust production to reduce lead times.
    Before investing in IoT technology, conduct proof-of-concept tests to see how specific technologies would work within specific processes. For broad IoT, choose one plant for testing. To improve a process through multiple technologies, choose one end-to-end process at a given plant.

Additive Manufacturing (AM)

    AM is already changing the way manufacturers design components and assemble parts—it’s commonly used to make spare parts or prototypes directly from scripts or pre-programmed files. Printing spare parts on demand saves time and reduces component inventory levels. The decentralization of 3-D printing facilities has further reduced inventory levels and transport distances to cut lead times even more significantly.
    GE announced the opening of its Customer Experience Center late last year, which aims to accelerate the adoption of AM.
    While 3-D printing is a potentially game-changing technology, today’s AM has its limits. Follow the example of current AM users and focus on specific aspects of production processes, namely prototyping and spare parts. With these in mind, a business can approach different 3-D printing manufacturers to understand initial costs as well as potential time and cost savings.
    Although these technologies can seem daunting, companies that don’t adapt will see their lead times hold steady while other companies become agile and adaptive through IoT, ERP systems, and AM. In short, Industry 4.0 isn’t a trend—it’s the new way of doing business.

Copyright 2018 ProQuest Information and Learning. All Rights Reserved. Copyright 2018 Society of Manufacturing Engineers Aug 2018.
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