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Implementing the smart factory: New perspectives for driving value

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For manufacturers looking to implement a smart factory, considering lessons from those who have done it can provide direction forward and pave the way to greater value.

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Implementing the smart factory: New perspectives for driving value

  1. 1. Implementing the smart factory: New perspectives for driving value March 2020
  2. 2. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 2 Study by the numbers Research approach 40+ interviews with global array of individuals, leaders and executives with hands on experience deploying smart factory Coded interviews using multiple coders, to identify key ideas and themes Identified themes that were common across smart factory deployments and study participants Life Sciences Healthcare Chemicals AerospacePaper Consumer Products Plastics
  3. 3. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 3 Our 2020 Implementing the Smart Factory study offers insight into the findings of our ongoing research into smart factory transformations. To that end, we build on, and complement Deloitte’s in-depth, collaborative study with MAPI, which investigates the state of smart factory deployment across the US, as well as our initial 2017 Smart Factories study, which offered an initial exploration of the concept and its key considerations. “ “ 2019 Smart factories will be the game changer for the US manufacturing industry. Adopting smart factories will likely result in threefold productivity improvements over the next decade. 2020 For manufacturers looking to implement a smart factory, considering lessons from those who have done it can provide direction forward and pave the way to greater value. 2017 The smart factory represents a leap forward from more traditional automation to a fully connected and flexible system—one that can use a constant stream of data from connected operations and production systems to learn and adapt to new demands. 2020 data source: “Implementing the smart factory, Deloitte Insights, March 2020.
  4. 4. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 4 A smart factory is a flexible system which can self-optimize performance across a broader network, self-adapt to and learn from new conditions in real or near-real time, and autonomously run entire production processes. Defining the characteristics of a Smart Factory​ A S M A R T F A C T O R Y I S … Proactive Real-time equipment monitoring with predictive anomaly identification and resolution capabilities Agile Configurable factory layouts and equipment with flexible scheduling and changeovers Transparent Live metrics and tools to support quick and consistent decision making with real time linkages to customer demand forecasts, and transparent customer order tracking Connected Continuously pull traditional datasets and new sensor and location-based datasets enabling collaboration with suppliers and customers Optimized Reliable, predictable production capacity planning and enhanced asset uptime modelling Improved asset efficiency, OEE and reduced downtime via real time and predictive maintenance Cost efficient processes with improved quality compliance, throughput and productivity Accurate tracking of inventory from raw materials to customer delivery Historical and real time reporting of production status, and analytics to pin point root causes of failures Data source: The smart factory: Responsive, adaptive, connected manufacturing, Deloitte Insights, August 2017. … A N D E N A B L E S
  5. 5. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 5 Drawing from interviews conducted and building on Deloitte’s in-depth, collaborative study with Manufacturers Alliance for Productivity and Innovation (MAPI) Special considerations for the Smart Factory Key Themes Positioning smart factory initiatives for value: Lessons in smart factory transformations from those who have done it Turning lessons into outcomes: Realizing the value of smart factory transformations
  6. 6. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 6 Positioning smart factory for value
  7. 7. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 7 Discovering underlying change management themes The familiar Human-centered design based on real user needs Focusing on the needs of the end user and enabling them to harness the value of data. Top-down, bottom-up approach led by change champions Providing support at a leadership level, as well as on the ground, to gain organizational buy-in and ensure adoption among workforce. Diverse teams with a broad variety of skillsets Identifying and deploying the many unique skillsets required for smart factory success, breaking down silos across functions, and managing the impact that has on smart factory investment. Ongoing support and learning Developing and accessing skills required for the long-term in the resident population and positioning them on the front-lines of the deployment, even after the deployment has ended.
  8. 8. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 8 Successful teams generally focus on the user first, not the technology Human-centered design based on real user needs So, we need to apply human science and human-centered approach to understand what [the user’s] pain points are, making sure we understand how they need to use information, what they need to look for, why they need to investigate it, and how they need to act on it. “ “ Many successful smart factory transformation leaders point to the need to consider user-oriented perspectives to achieving business objectives.
  9. 9. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 9 These champions are the ones who typically both understand the overarching vision and have the knowledge and credibility on the front lines to knock down barriers and drive change where it needs to happen Top-down, bottom-up approach led by change champions If any factory wants to introduce [Industry] 4.0 or a smart factory… it has to be a top-down, bottom-up approach… It must be both sides. That would be the biggest key to success. “ “ Change champions inside the business can provide support at a leadership level as well as on the ground to remove road blocks, gain organizational buy-in, and outline the business case for smart factories.
  10. 10. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 10 While teams should be diverse, they need not be big to be effective. Diverse teams with a broad variety of skillsets Our findings reinforce that most successful transformations employ diverse teams representing key functions and cross-cutting capabilities. Cross-functional teams can reduce the probability that most important controls, processes, and cultural elements will be missed during the transformation effort. Cross-functional teaming has been shown to result in greater organizational innovation and growth. Cross-functional teams pay dividends in the long run as the smart factory transformation scales across DSNs and the broader network.
  11. 11. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 11 Upskilling, or perhaps, add-skilling is important in this regard Ongoing support and learning of C-level manufacturing leaders surveyed strongly agree that their organizations currently possess the skills they will need in the future The development of in-house capabilities can breed long-term success of smart factory efforts. Beyond developing in-house capabilities, other approaches can also help sustain smart factory systems and technologies. Implementing alternative talent models Collaborating with universities and other schools Leveraging the skills of ecosystem partners 14%
  12. 12. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 12 Integrating the Information Technology (IT) and the Operations Technology (OT) in the Smart Factory The smart factory specific Human-centered design based on real user needs Focusing on the needs of the end user and enabling them to harness the value of data. Top-down, bottom-up approach led by change champions Providing support at a leadership level, as well as on the ground, to gain organizational buy-in and ensure adoption among workforce. Diverse teams with a broad variety of skillsets Identifying and deploying the many unique skillsets required for smart factory success, breaking down silos across functions, and managing the impact that has on smart factory investment.
  13. 13. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 13 If an application or process can’t connect to the network to share and access information, it can fail no matter how good or well-thought-out it is Connectivity as critical …because the connectivity has been so awful, it’s been hard to maintain adoption of some digital tools. “ “• Connectivity issues arose in nearly every smart factory deployment that we studied – Wi-Fi and cellular connectivity is often irregular in the labyrinth of steel and concrete • The deployment of smart factory technologies across the network demands a carefully crafted strategy, using qualified advisors, for building a digital infrastructure that is scalable, while also accommodating the unique demands of each environment As soon as things start moving around it becomes very challenging. We have found that to be quite difficult. “ “
  14. 14. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 14 Even within the same plant network, each facility is likely unique in terms of layout, equipment, and product Managing the reality of multiple devices Diversity in purpose New real-world applications of devices provide teams with opportunities to innovate and discover new ways to capture data and find new opportunities for value. Diversity in access methods Adding sensors to all equipment is not always practical; issues with access, quality, security, or machine uptime may intervene. Teams can leverage technology to develop new means for measurement and data collection. Diversity in age Smart factory deployments span some of the most advanced manufacturing technologies as well as some of the oldest and integrating across these age groups can be a challenge. Diversity in data structure and format In a smart factory it is critical to ensure that data from one system or device can be combined and leveraged with data from another.
  15. 15. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 15 Recognizing that the people in operations roles are likely to have a different approach and mindset than those in the IT organization on the use of technology and the introduction of new changes is KEY! Bridging the IT/OT divide of respondents in the Deloitte-MAPI quantitative survey identified difficulty in developing a broader integration between IT and OT as a major challenge to smart factory initiatives. IT organizations have historically made large investments qualifying and securing technology assets. They have developed procedures to accomplish this goal. The OT organization may not be familiar with those demands, or of the rationale behind them. 27% The focus in the OT organization is typically on keeping production going and keeping people safe. IT may focus on maintaining system integrity, but that may be perceived as resistance to suggestions or lack of understanding of the reality on the shop floor. IT v OT
  16. 16. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 16 Turning lessons into outcomes
  17. 17. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 17 Smart factory transformations leverage always-on connectivity to shift the value curve I L L U M I N AT I N G T H E H I D D E N F A C T O R Y Connected smart factories provide data that leaders have often never had access to before, illuminating things that were perhaps always there but “dark” due to lack of digitization. A U G M E N T C U R R E N T S Y S T E M S F O R N E W V A L U E Companies can evolve and improve upon familiar methodologies and disciplines, such as lean manufacturing and talent management, to uncover new ways to create value, drive greater productivity, make faster decisions, respond more quickly, and more effectively leverage talent. H A R N E S S A I T O G E T T O T H E N E X T L E V E L Once everything is connected, data abounds. Companies need tools to make sense of all that information in a way that humans cannot—to drive value quickly, proactively, and flexibly. S C A L E T H E S M A R T F A C T O R Y T H R O U G H O U T T H E N E T W O R K A N D E C O S Y S T E M While significant value can be realized by transforming a single facility into a smart one, the value that can be realized by scaling across the facility network is exponentially greater.
  18. 18. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 18 Connecting assets and data across a broad range of systems, platforms and data structures is generally key to the smart factory transformation. Once a facility and its assets are connected, they can unleash a flood of information to be untangled, translated and acted upon. The infusion of new data enables organizations to see things that were always there, but previously impossible to observe or quantify. Illuminating the hidden factory
  19. 19. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 19 By integrating current systems digitally and leveraging the data, companies can evolve and improve upon areas such as lean manufacturing and workforce management. Empower Digital Lean: Digital lean represents the marriage of lean manufacturing with smart factory principles and extends existing lean capabilities through digital tools that provide more accurate, precise, and timely information about operations. The result can be a better ability to monitor production and report issues, among other capabilities. Enable smarter approaches to talent: Workers can team with digital and physical technologies to augment their capabilities, and the technology itself can create wholly new roles within the smart factory. Augment current systems for new value
  20. 20. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 20 AI can be deployed in a variety of ways throughout the facility: Robots capable of navigating and learning from the types of uneven or unpredictable configurations that can be found in industrial facilities. It can drive predictive maintenance. It can be used to monitor and optimize performance of products or processes through the deployment of digital twins and digital thread. Harness AI and other tools to get to the next level
  21. 21. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 21 Scaling smart factory capabilities and processes throughout the enterprise’s network allows the organization to recognize smart factory value on an even broader scale. The influx of data and information can derive improved operations not just in one facility, but throughout the network and even the broader ecosystem. Scale throughout networks, ecosystems, and DSNs
  22. 22. Implementing the smart factory New perspectives for driving value Copyright © 2020 Deloitte Development LLC. All rights reserved. 22 Summing it up Manage skill diversity Deal with the devicesIT vs. OT Put humans at the center Identify and develop resident skillsChange management sits at the core Address connectivity early Identify champions
  23. 23. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2020 Deloitte Development LLC. All rights reserved.

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