Blog posts tagged with MPI

Time for New Technology?

October 31, 2016 by Liz Fox

Information technology (IT) spending will grow from $2.46 trillion in 2015 to more than $2.8 trillion in 2019, with the United States and Canada comprising the largest share of global IT spending. Discrete manufacturing and process manufacturing will be among the top industry spenders. Looking at the state of technology within U.S. manufacturers, it’s no wonder. For many functions — asset management, human resources, supply-chain management, customer service/support — a majority of manufacturers have ineffective IT applications and systems (see infographic). Sadly, smaller manufacturers are in even worse shape. For example, only 25% of SMEs have effective IT applications and systems for logistics/distribution; 23% for supply-chain management; and 18% for asset management. This is a looming crisis among SMEs. Hobbled by antiquated IT systems, they’ll be challenged to retain market share or growth because: Poor-quality operations information leads to production errors, delays, and environmental, health, and safety (EHS) issues. Enterprise functions fail to act in a synchronized, collaborative manner, leading to delays and waste. Customer and supplier businesses are bottlenecked, unable to share critical data and information (demand forecasts, production schedules, product specifications, design drawings, etc.). Legacy IT often makes a digitized supply chain difficult or impossible. It also hurts

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Supply-Chain Traceability is Vital

October 24, 2016 by Liz Fox

Manufacturers have always been only as good (or bad) as their suppliers. Some vendor errors and delays could be overcome, but problems in the supply chain usually rippled downstream, damaging quality or delivery. Manufacturers soothed irritated customers, and that was the end of it. And then the world changed. Today manufacturers are held responsible for the practices of suppliers, by both customers and governments. Supply-chain traceability rules, such as those affecting food and beverage markets (e.g., FDA Food Safety Modernization Act) and the high-tech industry (e.g., Conflict Minerals) are increasingly common — and will soon encompass EHS and corporate governance issues. With so much regulatory enforcement and scrutiny, you might think that manufacturers are taking aggressive steps to manage their vendors. Not so much. A full 60% of manufacturers have limited or no real-time tracking of supplies and products at their immediate suppliers. And 15% of manufacturers have no real-time tracking even in their own plants. Looking for a customer order? Forget it. But looking for trouble? You’ve found it. As government, customer, and public pressures mount for manufacturers, supply-chain traceability will become an immense competitive differentiator. Some executives recognize this, and are already developing supply-chain processes that improve performance,

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Get Smart and Make Smart Products with IoT

October 17, 2016 by Liz Fox

Companies and consumers want smart products — and they’re getting them. Embedded intelligence is showing up in everything from watches to shoes to refrigerators to tires. The smart-home market alone will grow from nearly $47 billion in 2015 to more than $121 billion by 2022. In industrial environments, too, embedded intelligence is rapidly becoming the norm. Manufacturing executives get it: 63% say the application of smart devices/embedded intelligence to their products will increase profitability over the next five years. They know that when wearable devices, stamping presses, or household appliances can communicate and act on their own, the value of these products — and their profit margins — increase dramatically. That’s why 40% of manufacturers plan to embed smart devices/intelligence within their products. Yet 30% of manufacturers still have no IoT product plans. Why? Many executives mistakenly believe that their products have no need for embedded intelligence. In fact, the biggest challenge for manufacturers developing IoT-enabled products is simply identifying the opportunities/benefits of such products (44% of manufacturers). Yet even a landscape rock, equipped with sensors, could become a communications center for lighting systems, sprinklers, or weather-monitoring stations. Which rock are your IoT innovations hiding under? Manufacturers identify excellent or

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Manufacturers to Hackers: "Come on in!"

September 22, 2016 by Liz Fox

Here’s some bad news: millions of sensors and controls on U.S. plant floors are more than a decade old. These outdated devices can’t support digitization and the industrial application of Internet of Things (IoT) technologies. Here’s some even worse news: These antique devices are open doors for unauthorized access to manufacturing systems and data — which could lead to stolen corporate and customer information, crippled factories, or industrial disasters. BI Intelligence estimates that there will be 34 billion devices connected to the Internet by 2020 (24 billion embedded devices and 10 billion smartphones, tablets, etc.), up from 10 billion in 2015; businesses will be the top adopters of IoT. If manufacturers rely on old plant-floor devices to make these connections, opportunities for hackers increase proportionally. A majority of manufacturing executives are concerned about the security of IoT devices in general (although all of them should be). And a third say that the security of their corporate devices, network, and data is a challenge (although, again, they all face challenges). Yet many companies overlook far more obvious concerns. For example, 47 percent of manufacturers have no plans to adopt a policy for bring-your–own-devices (BYOD), which provide easy access to hackers. No

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How to Leverage the Internet of Things to Impact Plant Profits

September 06, 2016 by Liz Fox

A strong majority of manufacturing executives say the application of Internet of Things (IoT) technologies to plants and production will increase profitability in the next five years. Some 26% expect profit boosts of more than 5%. Unfortunately, many of these imagined profits will never materialize. Why? Because nearly a quarter of manufacturers have no companywide understanding of the IoT and how to apply it to their businesses. Another 43% have only limited understanding. Even worse, only 11% of manufacturers have implemented a strategy to apply IoT technologies to their processes. Small and midsized enterprises (SMEs) are even less likely to have companywide understanding or IoT strategies. Yet gloomy as these numbers might seem, they offer insights into improving your IoT prospects: Develop IoT knowledge: Spur awareness and understanding of the IoT throughout your company by focusing on how embedded intelligence and smart devices can drive improvement — on the plant floor and in the office. For example, real-time data on production can allow for delivery updates to customers. Or maintenance staff can monitor key equipment to predict failures, and prevent line stoppages. Communicate an IoT vision: Establish a collaborative, integrated plan for your company to help managers and employees understand

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Tap into the Power of Real-Time Production Information

August 29, 2016 by Liz Fox

Manufacturing executives are keenly aware of the power of the Internet of Things (IoT) — and its potential to improve plant performances. Most manufacturers (85%) plan to deploy IoT technologies and increase their company’s application of smart devices in production equipment and processes over the next two years. Moving forward with IoT-enabled processes can improve plant quality, speed, and costs — more than half of manufacturers cite those as IoT objectives — and generate competitive advantage. But not all IoT opportunities yield the same returns. The applicability of the IoT to various production processes varies widely, with shipping, warehousing, and document management topping the list of excellent or good opportunities (Figure 1). But every plant is unique. A labor-intensive plant will surely apply the IoT differently than an asset-intensive facility.     Excellent opportunity Good opportunity Fair opportunity No opportunity Shipping/logistics/transportation 27% 36% 22% 15% Warehousing 22% 36% 21% 20% Document management 22% 41% 22% 15% Assembly 18% 28% 27% 26% Packaging 18% 29% 27% 27% Additive manufacturing 9% 21% 23% 48% Fabrication/stamping 7% 24% 20% 49% Welding 6% 14% 24% 56% Heat-treating 6% 13% 20% 62% Plating or painting 4% 16% 19% 61%   To identify the best IoT

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It's a Small World - Even for Small Manufacturers

August 22, 2016 by Liz Fox

The United States is a huge market — and offers domestic SMEs a familiar and comfortable sales destination. But big as it is, it only represents a third of manufactured goods consumption on the planet. That’s a problem for SMEs, especially since only 46 percent have a global strategy. SMEs can successfully go global, by focusing on three key opportunities: Sales: There are markets for your products outside the United States, and you don’t need to move there to tap them. Find a trusted distributor or partner with local experience, and craft a deal that gets your goods into foreign markets while protecting your intellectual property and brand. Production: It may seem overwhelming, but the best global option for your company may be an operation abroad. Where are your biggest customers located around the world — or planning to expand? Would they like to see your facility next door? Can they help you set up shop? Procurement: Most SMEs buy goods and services in the United States that could be sourced abroad. You won’t want to procure everything (especially critical components) overseas, but you should understand your options. Which non-core components, materials, or services could be sourced more cost-effectively abroad? The

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Real-Time Information and Insight for Manufacturers

August 08, 2016 by Liz Fox

Information powers improvement — yet many manufacturers are powerless. Most manufacturing leaders don’t know what’s happening in their plants right now. The information vacuum is even worse at SMEs: executives at these companies can rarely get their hands on real-time information regarding critical metrics. For example, less than a third of SMEs have a real-time capability to monitor and measure process-specific safety within their plants. Worst of all, a staggering percentage of SMEs have no information about key performances (Figure 1). A full 11 percent have no capability to track safety. Capability to monitor and measure    No capability Real-time capability Process-specific quality 8% 36% Process-specific safety 11% 29% Location-specific inventory levels 12% 26% Process-specific pace or speed 12% 22% Process-specific productivity 12% 21% Individual equipment or machine performance 11% 20% In-plant material handling performance 19% 18% Process-specific sustainability performance 21% 14% Supplier performance 12% 10% External logistics/distribution performance 16% 8%   Respondents rated capability on a scale of 1-5, where 1=No capability and 5=Real-time capability. Imagine working at one of the SMEs that don’t know if equipment is operating (11 percent), or how much inventory is lying around (12 percent), or internal cycle times (12 percent). Leaders at SMEs often

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Partnering for Growth: Tap into the Power of Your Supply Chain

July 18, 2016 by Liz Fox

Small and mid-sized manufacturers (SMEs) face tremendous disadvantages vs. larger competitors — from financing to production efficiencies to distribution channels. But SMEs also have a secret weapon: their supply chains. Suppliers and customers offer a vast array of capabilities (intellectual property, talent, strategies, ideas) that can be leveraged into profits for your company — and theirs. For example, a customer in need of new material will often finance a small manufacturer’s R&D, especially if they can share the rewards with limited risk. If you’re a small customer in need of new components or materials, it can work the other way; a larger supplier might finance the required R&D and tooling, in exchange for a long-term contract. These partners — or others — might also offer as-needed production capacity, for seasonal demand spikes or unexpected orders. Unfortunately, for most manufacturers, “partnership” is an unfamiliar term. Only 25% of manufacturers report that their relationships with suppliers are “partnerships” in which they share resources, intellectual property, etc. Among smaller manufacturers — less than $25 million in revenues — more than half have a “buy and sell” relationship with suppliers. Relationships with customers are just as bad (or worse) (see Infographic). These low-value relationships

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Back to Basics: How to Make More Money Now

July 05, 2016 by Liz Fox

There’s lots to talk about in manufacturing these days — the Internet of Things, cloud computing, additive manufacturing, robotics, etc. And there’s no question these new technologies could transform your company — but only if you’re ready for them. Alas, there’s the rub: Many manufacturers — especially smaller firms — ignore the improvement strategies that could put more money in their pockets now, while positioning themselves for an more lucrative tomorrow. In fact, 17% of manufacturing companies have no improvement methodology in place at their plants. Sadly, two-thirds of those facilities belong to small manufacturers (revenues of less than $25 million). Make no mistake: These “No methodology” facilities woefully underperform vs. their improvement-minded peers: They lag in sales per employee by $105,315 per year — $168,844 (average) vs. $274,159 at plants with an improvement methodology in place - and they’re much less likely to lower production costs: 22% reduced manufacturing costs (excluding purchased materials) over the past three years vs. 37% of plants with an improvement methodology. It doesn’t have to be this way. Small manufacturers have major advantages and opportunities in adopting improvement principles. First, the scopes of their efforts are smaller — which means fewer people to train and

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