Digitalization enables higher efficiency at lower costs. Managers in the manufacturing industry have known this for a long time. Now, shutdowns and reduced factory production are making digitalization urgently relevant on the executive floors: managers need to reduce costs in the short term and at the same time initiate a new start for sustainable competitiveness. The silver bullet is data-driven manufacturing.
Parallel swing: reduce fixed costs in the short term, improve in the long term
The economic consequences of the global Corona situation are still unclear. But one thing is clear: managers must quickly stabilize their company’s financial condition and return to the growth path as soon as possible. Fixed costs must be reduced and a new start made possible for competitiveness through sustainable liquidity management.
Hans-Jürgen Zimprich, the association engineer at Südwestmetall, recently described the challenge this way in a webinar: A clear, correct, and up-to-date data situation in planning and production is the central prerequisite for adequate liquidity protection. For companies, it is about:
- Transparency about stocks in warehouses and production,
- clarity about the product portfolio and its contribution to the bottom line,
- fast communication and decision-making channels.
Transparency in production is the key
There is a silver bullet for this challenge in the age of the Industrial Internet of Things (IIoT): data-driven manufacturing. It provides the necessary transparency at all levels – from the shop floor to the pot floor.
Example inventory management
When companies improve their supply chain management, they reduce inventory, lower costs and achieve higher liquidity. Data-driven manufacturing ensures that companies know the shop floor’s special order status and processing times. In this way, they improve material demand management and reduce their WIP inventories.
Precise production data optimizes the entire corporate planning process. Tanja Knechtskern from Controlling at Grammer AG. “Above all, we wanted to make costs visible. To do this, we had to bring production and control together. These actual feedbacks to SAP are a real enrichment for us in Controlling.”
Example of idle times
Data-supported production helps optimize shift times and reduce fixed costs in this way. A plant utilization rate of 60 percent means a 40 percent optimization potential.
A new start for sustainability – through CIP and energy monitoring
The digital transformation also supports a new start for sustainable manufacturing to optimize their energy consumption in particular. Thus, according to Südwestmetall, the following applies to those who continuously work on better processes to improve their starting position significantly. Objectively recorded, precise vital figures are the prerequisite for everyone to take responsibility for the continuous improvement process (CIP) at their place.
Example of resource efficiency
The Swiss furniture specialist peka-metall continuously focuses on efficiency improvements and state-of-the-art technology. Production manager Denis Shoshi: “In some departments, we have achieved productivity increases of up to 20 percent, the average is about 12 percent and rising.” (peka-metal success story)
Example energy management
Data-supported manufacturing also enables companies to manage their energy more sustainably. Martin Strehl, responsible manager at the automotive group BorgWarner at the Markdorf site (Baden-Württemberg): “Every energy measure on production facilities or machines is permanently monitored and checked for cost savings. In this way, we have our energy costs under control in the long term and can call up this data in real-time in the system at any time.” (see video “FORCAM in three minutes”).
Data-driven manufacturing helps companies protect investments made and enable desired innovation. The intelligent factory – Smart Factory – offers the best opportunities to reduce costs in the short term, manufacture more productively in the medium term, and be competitive again in a long time. What’s more: with data-supported manufacturing, companies are taking the high road to a sustainable new start, including controlled use of resources for more climate protection.