Member News: What does Digital Transformation (Industry 4.0) actually look like for a manufacturing SME? – Follow a live journey over the next 4 months
Much has been written about the benefits of digital transformation and Industry 4.0 for manufacturing SME’s but what does it mean in practice?
Four weeks ago, VisualPM began a digital transformation journey with one of Greater Manchester’s Top 100 manufacturing SMEs supported by part funding from the Made Smarter NW Pilot scheme. Over the next few issues we will chart month by month the progress, changes, benefits and bumps in the road of what digital transformation actually means for a traditional manufacturing SME.
All aspects of the business – from customers and sales through procurement, planning and production to delivery and logistics, form an integral part of the project. Along the way you will see in detail how upwards of 20% of additional production capacity is released without the need for capital expenditure. You will experience how week on week digital technology and real time data is used to drive measurable performance improvements previously unattainable across all areas of the business. There are sure to be hiccups as well as successes, providing a ‘warts and all’ review of digital transformation for a typical manufacturing SME.
Background: This is a mature manufacturing business operating as a private limited company for over 20 years with the same two partners and shareholders. Together they have successfully grown and managed their business in a tough and competitive market environment. They have invested frequently in new machines and equipment and have been operating with a bespoke ERP system for almost 10 years. This is already a successful and profitable business.
Made Smarter Initiative: Following initial discussions with Made Smarter, the company was introduced to VisualPM, an approved Made Smarter digital transformation specialist.
Step one was to conduct a Digital Business Review in order to assess the current use of data throughout the business and identify and quantify the potential opportunities available through the implementation of digital technologies. At this early stage the business was thinking of replacing an ageing bespoke ERP system which had become unreliable due to poor data and the lack of an accurate production planning and scheduling tool.
Week 1 – Digital Business Review
The one week review highlighted the need to produce real time data from production areas by connecting the machines with a manufacturing execution system, (MES). Whilst the existing bespoke ERP system had some serious data inefficiencies, errors and limitations it was evident that a new ERP system would not resolve these issues. Instead, an integrated Industry 4.0 software suite including the MES, an advanced production scheduler and stock control module integrated to a data cleansed existing ERP system would provide a fully digitalised solution connecting machines, systems, processes and people. The potential benefits of the integrated Industry 4.0 software suite would release over 25% of production capacity in the manufacturing facilities without any further capital investment. The project, including behavioural change aspects to upskill the traditional manufacturing workforce into a modern digital workforce, would take 24 weeks. The cost – benefits ratio would produce an ROI of 300% within one year of completion of the project and a break-even point within the project timetable. The proposal was submitted and approved by Made Smarter for funding. This whole process including approval by Made Smarter, took just over three weeks.
For further information on exploring what Industry 4.0 could mean for your organisation, drop Andy, the CEO of VisualPM an e-mail at I4SME@visualpm.co.uk
