Learn how you can increase revenue, decrease costs and improve profitability all while improving your overall equipment effectiveness, quality, on-time delivery and much more!

1. Smart Manufacturing Workshop:
An Interactive Improv Session
Jonathan Shoop, CPA, Partner, Skoda Minotti
David Moon, Solutions Consultant, Hitachi Vantara
October 21, 2019

2. A Riddle…
• You have lots of me and probably don’t even know it...
• I never deplete, never wear out, don’t require repair but must
be protected…
• My potential is limitless - I am a vast untapped resource...
• You created me at little or no cost…
• Studies show you only utilize about 3% to 5% of my
potential…
• I am the most valuable resource you own yet I am often
ignored…
• I am the driver of this 4th Industrial Revolution...
• What am I?

5. About the 4th…
“You cannot wait until a house burns down to buy fire
insurance on it. We cannot wait until there are massive
dislocations in our society to prepare for the Fourth
Industrial Revolution.”
Robert J. Shiller, 2013 Nobel Laureate in economics
Professor of Economics, Yale University
“The changes are so profound that, from the perspective
of human history, there has never been a time of greater
promise or potential peril.”
Klaus Schwab, Founder and Executive Chairman
World Economic Forum

6. Impact of Data on Manufacturing
• Your ability to securely collect, visualize,
analyze and monetize data derived from
your shop floor and business systems will
determine your ability to survive & thrive
in this 4th Industrial Revolution…
• While the 4th Industrial Revolution started in Transportation,
Entertainment & Retail, it is spreading…

7. The Time is NOW
• And the clock is ticking….
– Your competitors across the globe are already
spending on this technology and private/public
funds are helping them with the investment…

8. 2019 IoT Projected Spending:
Top Use Cases
100
44.2
44.1
41.7
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120
Manufacturing Operations
Production Asset Management
Smart Home
Freight Monitoring
2019 Top Use Cases: Annual IoT Spending
Spending in Billions of Dollars
Source: IDC 2019 Worldwide Semiannual Internet of Things Spending Guide
Overall
Smart Mfg
Spending:
$197B

9. Real Return on Investment
• Many of your competitors are seeing
significant returns….
Average ROI:
Hitachi Proof of
Value (PoV)
Projects:
3 to 6 Months

10. Digital Transformation: What is It?
• Think about how we use data to drive decisions in
our daily life…..

11. Our Factories Behind the Times?…
• Now, think about our factories…
• How is data being gathered/used on our factory floor?…..

12. • Let’s see what a transformation to Smart
Manufacturing looks like….
The Transformation…

13. Successful Smart Manufacturing
Journey…
Step 1:
Connect
Step 2:
Visualize
Step 3:
Analyze
Step 4:
Predict
Step 5:
Prescribe
Step 6:
Transform
Quality
Monitoring
Asset Monitoring
Root-Cause
Predictive
Maintenance
Predictive Quality
Transformational
Manufacturing
Digital Maturity Journey
IIoT Journey
Store
Early Mature
Enrich
Early Mature
Activate
Monetize (Digital Transformation)
Free
Workshops
Available

14. 14
Workshop

15. Our Company ($200M Annual Rev)1
2
Top Business Challenges:
KPIs Driving Your Success
1. Machine Availability -$2M /y
2. Quality – High Scrap -$500K /y
3. Safety - $30K/y claims
4. Throughput - $150K Lost Rev3 No Plant Network Connectivity
ORDER ENTRY
ERP
(2XPenCiv)
Stamping
Nothing
Paper WO
Milling
PLC
Paper WO
Coating
Nothing
Paper WO
Assembly
Nothing
Paper WO
Finishing
Nothing
Paper WO
Pack & Ship
KPI Roll-Up to Spreadsheets
Manual update to ERP System
4 Adding Sensors, Edge & Aanlytics…. Edge Device
OPC-UA
Node Red
Secure Industrial Network (Bandwidth TBD)
Inisghts (Extract, Transform & Load)
Insights
Data Lake / Data Mart
On-Premise or Cloud
Persona-based
Dashboards
Manufacturing
Process Data
Day-by-Hour
Process View
Operational
Reports
5
6 Consumption (How?):
1. Build your own
2. CapEx Purchase
3. Subscriptions
4. Consulting – Teach to Fish
5. On-Prem vs. Cloud
The Challenge:

16. Intelligent Manufacturing Journey
LOW
HIGH
IMPLEMENTATION
FEASIBILITY
BUSINESSVALUE
TARGETED
BUSINESS INITIATIVE
Sweet
Spot!
HIGH

17. 17
The Results

18. Use Case: Metal Forming
Foreseeable Benefits
70% reduction in unplanned
downtime
Improved die change
process from 4 hours to 1
hour
40% quality improvement
Overall improvement in
safety index (less incidents
per month)
ROI achieved in one (1)
month
 Client lacked real-time visualization
across machines. KPIs were tracked
manually on whiteboards and rolled up
to spreadsheets
 Long downtimes during die changes
 Safety concerns/challenges
 Quality issues with high scrap rate (up
to 3K bad parts in a single run)
 Scheduling was largely a manual
process that was constantly adjusted to
meet production goals
 Inventory tracking issues caused
issues with raw material availability
 Hitachi worked with the client team to
develop a factory visualization solution
using:
‒ Data collection & visualization
‒ Big data analytics including
machine-learning algorithms to
provide predictive maintenance
‒ Predictive quality solution using
LiDAR sensors and video
‒ Manufacturing process best
practices consulting around
processes & die changes
‒ Inventory tracking system using
RFID and barcode scanning
Context/Challenge Solution
The client is a Tier 2 automotive parts supplier with approximately $10M in revenue.

19. Use Case: Heavy Electrical
Achieving operations excellence through digital platform at a leading heavy electrical
components manufacturer – part of a USD $3 billion industrial conglomerate.
Foreseeable Benefits
Reduction in cost of quality by
~30%
Reduction in planned downtime
hours by ~50%
Power consumption reduced by
~10%
Reduction in aging inventory
value by ~20%
Increase in availability of key
assets in the line by ~50%
 The client wanted to implement
digital interventions to aid
operations excellence in their
manufacturing unit. This was driven
by the following:
 High cost of poor quality
 High aging inventory due to lack of
FIFO compliance and visibility
 High energy consumption
 High management loss times
 High unplanned downtimes
 Hitachi conducted a thorough assessment
of the manufacturing unit across
production, quality, SCM and maintenance.
Multiple themes of improvement emerged
and prioritized based on impact, cost &
effort
 Cost of quality optimization using Advanced
process control
 End-to-end traceability from incoming RM
to FG
 Optimization of energy consumed through
Energy management solution
 Optimization of downtimes – through end-
to-end connected factory solution
Context/Challenge Solution
Heavy Electrical Components Manufacturer

20. Use Case: Steel Industry
Steel coil processing company
Foreseeable Benefits
Reduced scrap by ~15%
Improved labor productivity
by ~10%
Improved safety
Reduced product return due
to increased labeling
accuracy
Increased OEE by ~15%
Increased asset availability
by ~35%
 Lost production time due to
misalignment of knives – manual knife
setup is a complex & time-consuming
process
 Lost production time due to manual in-
line width measurements – inefficient
process to measure dimensions using
micrometers
 Lost production due to poor production
scheduling & equipment failures
 Lost quality and customer satisfaction –
high % of mislabeled products causing
customer frustration
 Poor safety due to inability of seeing
internal crane cable fractures leading to
cable failure
 Hitachi worked with the client team to
develop a factory visualization solution
using:
‒ In-line dimension check – through
slitting cameras
‒ Label application quality check –
through label check cameras
‒ Production scheduling
‒ Predictive maintenance solution
for the crane cables using sensors
– string potentiometer and DVRT
‒ Predictive maintenance solution
for the slitting machine using
sensors – temperature & vibration
Context/Challenge Solution
The client manufactures and sells steel products for large and small OEMs and custom fabricators.
It engages in the processing, slitting, blanking and sheeting of flat rolled steel. ~$30M revenue

21. 21
Q&A
Any Questions?

22. 22
Contact
Jon Shoop, CPA
Partner
(440) 605-7107
jshoop@skodaminotti.com
David Moon
Solutions Consultant
Hitachi Vantara
(440) 853-0050
david.moon@hitachivantara.com