At the end of August 2017, Deloitte published an article in which analysts define “the smart factory.” In the article, analysts explore the components that make a factory smart. One of those components is that the factory is optimized.
What Does It Mean for a Factory to Be Optimized?
Deloitte defines optimization as:
· A factory that has reliable, predictable production capacity.
· Equipment that has increased uptime and production efficiency.
· Manufacturing processes that are highly automated.
· Materials are handled with minimal (if any) human intervention.
· The cost of production and ensuring quality is low.
Optimization is powered by connectivity. Connected factories are those in which equipment transmits data without the aid of human intervention. Information doesn’t just go into a database to sit there so people can’t do anything with it; the people and systems that need the information most get it in real-time.
What Do Optimized Factories Look Like?
It’s one thing to define an optimized factory. However, to truly understand how an optimized factory functions, you need real-life examples.
Whirlpool has optimized its manufacturing processes to reduce the amount of waste it sends to landfills. The linchpin of this strategy is an analytics platform that tells users how much waste is being generated. Users can also see water and electricity usage. The analytics platform isn’t limited to one facility – it shows users information from Whirlpool’s factories across the globe.
In 2017, First Solar, a solar panel manufacturer based in Ohio, automated its factory. The move was to stave off overseas competition, and it paid off. First Solar’s automated processes cut down the traditional three-day long solar panel manufacturing process to a fraction of the time. Moreover, the panels produced are larger, produce 244% more power than traditional solar panels, and their manufacturing cost is as low as 20₵ per watt, which is 30% less than the cheapest overseas-made equivalent.
Samsung has also automated large chunks of its air conditioning manufacturing process, resulting in optimization. In the early production stage, the entire process is automated. Because of that automation, the rate of defects has been slashed; a single worker’s misplaced bolt could cost thousands of dollars in lost productivity because the whole production line could be compromised. Now, there are few workers making air conditioners at Samsung, but the ones that are there do less manual, repetitive labor and more value-added tasks.
Optimization isn’t a one-step process – it’s not about implementing a number of new technologies and calling it a day. It’s about coming up with a goal and crafting a strategy to meet that goal. The strategy will inform technology choices so that you can build a factory with efficient operations.
Additionally, optimization doesn’t happen overnight. It takes fine-tuning. Once you achieve optimization, though, it creates a significant competitive advantage to help you navigate an unpredictable market.