INSIGHT
THREE KEY TECHNOLOGIES TO SLASH
MANUFACTURING INPUT COSTS
By Dereshin Pillay
The cost of production remains the biggest pressure point for local manufacturers, but there are
technology-driven solutions to assist.
L
ocal manufacturing firms continue to face blustering head-
winds — from heightened global competition from the likes of
China and India, sluggish demand and macroeconomic condi-
tions, to critical skills shortages and labour issues.
But technology can help to relieve one of the most common pain
points (input costs) that we are seeing: the stubbornly high costs
of production. By using the right digital tools, manufacturers can
sustainably reduce their production costs, breathing new life into
their margins and ensuring profitable operations.
Let’s look at three areas in which this can be achieved:
1. Raw material inventory and production planning
By using digital tags like RFID, plant operators can gain greater
visibility into materials, equipment, parts, and other assets.
Combine this with other datasets to build up a very rich picture
of materials as they flow through a factory to eventually become
finished products.
By knowing exactly where everything is, it becomes easier
to plan production, as data is automatically piped into one’s
Manufacturing Execution System or Production Lifecycle
Management System. This means faster logistics and greater
throughput of products, as well as increased levels of uptime and
productivity — ultimately driving down input costs.
Rapid advances around 3-D printing means that certain parts and
materials that are required urgently can be created on site and at
short notice, even further enhancing the management of materials.
One of the leaders in this space is, in fact, General Electric
(GE). This manufacturing behemoth is reinventing itself with a
variety of strategically connected technologies — including lean
manufacturing, additive manufacturing (also known as 3-D printing),
and advanced software analytics to enhance productivity. At
Grove City, GE has used these technologies to reduce unplanned
downtime by 10–20%, improve cycle time, and reduce costs.
2. Predictive maintenance and predictive analytics
With sensors gathering key data on each machine — from
humidity, heat, wear and tear, usage times, oil levels, and various
other data points — we can start predicting when a machine is
likely to fail, or require servicing.
This principle, known as predictive maintenance, helps to
curtail the costs of managing industrial equipment, and reduces
unexpected downtime (since services, repairs, and refurbishments
can all be scheduled to avoid interrupting production lines).
With some analysts’ findings suggesting that downtime costs
the average factory between five and 20% of its productive
capacity, predictive maintenance can be one of the most crucial
weapons in the fight against billowing production costs.
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But we can extend the principle of predictive maintenance to
encompass predictive analytics across the entire factory operations.
With predictive alerts flying in from all corners of the factory, it
becomes possible to orchestrate the operations more dynamically,
changing the daily plan according to fresh data that comes in from
along the production line.
3. Proof-of-concept prototypes
In traditional manufacturing, creating a new prototype (for a
particular product) was a lengthy and extremely expensive
endeavour — particularly when the concept turned out to be the
wrong one and never progressed into full-scale production.
But with cutting edge digital simulations, 3-D representations,
and holograms, it becomes possible to play around with various
new prototype designs, testing them with users and getting a
tangible feel.
By creating sophisticated prototypes in these new ways, the
dramatic upfront costs of producing a single unit on the production
line are greatly reduced. In this way, rapid prototyping and Proof of
Concepts (PoCs) can cut out another layer of cost.
As traditional manufacturers evolve towards smarter and more
digital production lines, it is not always easy to know where to
invest first — where one will get the loudest ‘bang for their buck’.
But by focusing on these three areas, and then building from
these foundations and gradually connecting other technologies,
manufacturers can address the most pressing pain point and set
themselves well on the way to reducing the costs of production. ■
ABOUT THE AUTHOR
Dereshin Pillay is head of manufacturing and automotive
at T-Systems South Africa.