Why smart technology cannot help Australian manufacturing

If you belong to the one per cent of manufacturing sites in Australia that has mastered technology and is capable of running a “lights out” factory, then this article is not for you. This is for the rest of you.We are living at a time where a Boeing 787 Dreamliner can produce up to 40 terabytes of data in one hour of flying time. A small level sensor that is commonly used in most factories today can produce nearly 4 terabytes of data per year.  That’s one of those external hard drives commonly used to store data, for every sensor in your factory, each year! How many of those sensors do you have in your factory? The question is, how prepared and capable are you and your team to deal with such volumes of data coming at you, to make the right decision at the right time?Over the decades, operational excellence has been providing frameworks and methodologies to help manufacturing companies in:setting direction and developing strategies to implement periodically reviewing performance and making the right decisions by the right teams at the right timecontinually reducing the cost of manufacturing through prioritised initiatives, identified through analysis of factory performance. These are necessary fundamentals for any business to remain profitable.  So, if we are to help Australian manufacturing survive in the future, technology (such as Internet-of-Things (IoT) and Industry 4.0) must assist the three points mentioned above – at least the second and third points.  And even if the technology is ready and available to do so, the other question is, is your team capable of harnessing its full potential?What is Industry 4.0?Well, apparently we are going through the fourth industrial revolution right now. The first one occurred when steam power was discovered in late 1700s and early 1800s.  This led to mechanisation of plants, massively increasing productivity. The second revolution occurred in the early 1900s when Henry Ford came up with the assembly-line concept to mass produce the Model T, again increasing productivity and reducing the cost of manufacturing. The third revolution occurred in the 1970s and 1980s with the availability of computers and advancements in automation, again increasing productivity and reducing cost of manufacturing. This fourth revolution, termed Industry 4.0, is fuelled by advancements in networks and connectivity  – IoT etc. The premise is to connect the entire supply chain, not just manufacturing, from paddock to plate.So are we ready to harness the potential of Industry 4.0?I believe there are five main issues preventing us from fully realising the benefits from technology advancements.Connectivity: Connecting the entire supply chain from paddock to plate is a pie-in-the-sky concept when many haven’t even connected within the four walls of the manufacturing plant. Why? Most equipment is old and not capable of connecting to a supervisory control and data acquisition (SCADA) system or an ethernet.Accessibility: Even if they were connected, the original equipment manufacturers (OEM) have got the controlling logic locked down in a black box that can only be accessed by them.  So any of your own industrial engineers would not be able to do any work on them.Cybersecurity: Even if they were accessible, IT departments have firewalls that prevent anyone from connecting from the outside and accessing the machine. Why would we relax those, when we see examples such as the cyber hacking that crippled the Cadbury plant in 2017 for a number of days?  Collaboration: Even if we sorted all of the above issues, there’s one more issue from a technology point of view that stops us from reaping the full potential of Industry 4.0  – collaboration. Various components, machines all need to communicate with each other if we are to connect from paddock to plate. For this to occur, equipment manufacturers need to ensure that machines can function on a common platform such as open source coding. When it comes to common programmable platforms and open source coding with various machines interacting with each other, it is unchartered territory. Many equipment manufacturers are erring on the side of caution to see if different machines could collaborate.Maturity of operational excellence: Even if we sorted all of the above technological issues, there are a few issues from an operational excellence point of view that need addressing. Firstly, many struggle to prioritise data and issues. If we don’t have the right processes and structures in place to prioritise issues and make decision swiftly in the manufacturing plant today, how could we deal with terabytes of data per sensor from the entire supply chain, in the future? Secondly, the problem-solving capability, be it frontline leaders working on situational problems or middle management working on systemic issues, is far less than what is expected from them. Consequently, everyone is solving a problem at a level below their role. Again, how will you be able to solve more complex issues in the future?A McKinsey study interviewed 300-odd companies in Germany and found that only 48 per cent thought they were ready to embrace Industry 4.0.  They also found that between the second and third industrial revolutions, most companies replaced up to 80–90 per cent of their industrial equipment. They claim it is unlikely that we will see major investments again during this era, particularly at present when the global economy is slowing down. These issues really make it difficult to get the most from the technological advancements promised through Industry 4.0How do we move forward?There are four activities that we can do today using the available resources, to prepare to get the most out of Industry 4.0 tomorrow.  These are:Master problem-solving techniques to be able to deal with more advanced scenarios in the future.Update procurement policies when purchasing new equipment. Request from suppliers (OEM) for machines not to have “black box” control systems that your engineers cannot access.Systemise loss analysis and prioritising so that you do this on a regular cadence and continually improve your business. If you can do this successfully within the four walls of manufacturing, then you are ready to deal with the entire supply chain.Take control of critical equipment at least within the four walls of your manufacturing plant. Connect these to a network and monitor its performance.  I started off with a keen interest in automation technology as one of the first graduates of mechatronics engineering at UNSW, but my subsequent industry experience identified the greater importance in optimising the people factor and the existing manufacturing systems without complex and expensive tech transformations. Yes, technological solutions are able to help manufacturing companies today to put out spot fires. However, we are far away from making the technological hype that is out there a reality.Ishan Galapathy, operational excellence expert in manufacturing, speaker and author.