The ABC of Manufacturing Digitalization


I have been asked many times what exactly Manufacturing Digitalization is throughout my time as the Chair of Smart Automation Industry Group of Singapore Manufacturing Federation. There have been too many jargons invented or re-invented to the extent that people are generally confused about the things that they should do. In this article, I will offer my understanding through the concept of ABC of digitalization defined as:

Digitalization Value = a + bC

Where a = Availability of Resources, b = Business Value, C = Changes

Availability of Resources is the first digitalization objective of almost all types of manufacturing. When we decide that we would like to start our manufacturing, we will plan the resources required to achieve the types of products mix and expected output we want. However along the way we lose track on the actual effective availability of the resources due to inefficiency and mismanagement.

Using digitalization, we can realign all resources and gain control on how they can be used correctly, and the related activities are what we call benchmarking, monitoring and standardizing, where people will develop dashboard application to start managing resource under different scenarios. When these activities are done, we can then talk about creating options on the resources which are reflected in the pre-process setup and post-process handling; and to make this efficient, we build business logic flow and use system to assist users instead of relying on the individual experience. This kind of activities are generally referred to as Digital Twin building projects.

Let’s talk about Changes first before we move to the Business Value. Changes are defined as the intended and unintended changes that we encountered in manufacturing. Intended changes are those that provide positive values to our business, things like modifying spec to support different processes, dynamic scheduling to improve asset utilization, Just-In-Time inventory control to improve inventory turn etc. The more such activities are done correctly, the more benefits we can realize.

Therefore, one of the objective of digitalization is to expose these opportunities in runtime so that actions can be taken quickly to realize the maximum benefits. Unintended changes are those that negatively impact our business if happened, for example unscheduled breakdown of equipment, reworks and defect, excessive waiting time for resources etc. Detections of such events would not be sufficient so a key digitalization objective is to identify and control the factors that lead to these events so that interventions can be executed to prevent the incidents.

Collecting KPIs (Key Performance Indexes) and KPVs (Key Process Variables) against event context for generating alerts with first-line reporting will allow these events to be integrated to manufacturing activities for achieving better efficiency. This is the primary aim of “Connectedness” with IIoT and Edge Solution.

The last part of the puzzle is on the business values that can be generated from managing the Changes. There are many levels of using the data to create business value, starting from providing visibility to understand the problem, connecting and coordinating the actions, predicting the issues and prescribing the solution, and finally adapting to the changes automatically with potential self-adjustment and self-learning via AI. Each level of digitalization maturity can trigger a round of business process re-engineering that could potentially offer a major upgrade to the manufacturing capabilities. The net result of many rounds of these activities would be the strengthening of the manufacturing DNA that eventually enables the manufacturers to bring unparalleled service to the market, something we often call disruption.

I can’t stress enough of the importance of this because the whole idea of Industry 4.0 is to create new experience with better options, starting from the end user perspectives and propagate throughout the whole supply chain. The “new” way of using data to manage the manufacturing activities can create the multiplier effect if coupled with the right use of advanced automation technology like robotics, AGV, ASRS, Drones etc. The opposite of this is also true in a sense that if we limit the growth of our digitalization maturity, the use of the corresponding advanced technology will also be limited or in some case, produce negative impact to the business if it fails to handle the changes.

As a concluding note, many people look at manufacturing digitalization as a technological upgrade exercise by replacing/upgrading resources used in manufacturing activities. I strongly encourage them to relook again on their strategy, focus instead on the value of digitalization in creating better experience for their customers and their eco-system. It feels great to talk about creating factory of the future but it is even greater to harvest the value of digitalization and orchestrate awesome experience of the future.