Business Practices Drive the Smart Factory, Not the Other Way Around (Pt. 2)

Estimated reading time: 2 minutes

In Part 2 of this conversation, Sagi Reuven— business development manager at Mentor, a Siemens Business—continues his discussion on how smart factory implementations must start with traditional process analysis and improvement before the data capture process is useful. Read Part 1 of this interview in the March 2020 issue of SMT007 Magazine here.

Johnson: Sagi, we started out this conversation with the proposition, “How do you transform your brownfield site—your existing facility— into a smart factory?” So far, we’ve learned that converting to a smart factory is not necessarily about the equipment; it’s centered around business practices, and manufacturers don’t necessarily need to go build a brand-new greenfield facility to implement a smart factory. What you need to do is be “greenfield” about how you think about the operation of your business. We left off with materials as the first place your customers usually start their smart factory transition. If the compelling event to get them off the dime and moving is material handling, where do they tend to go next?

Reuven: Usually, they start with the basics of data acquisition, including IIoT. This will be the first step if they don’t want to do it all at once. They will do basic data acquisition and look into some dashboards and analytics; one example could be around optimizing the changeover. Then, the second step would be advanced material management like ERP visibility, such as just-in-time delivery, including AGVs and material towers. If the material is about to be fully consumed on the machine, it will send a notification to the storage tower or the operator in the storage that you need to put a new reel in the machine so that it will keep on working. Again, when you look at the numbers, it saves 3–4 minutes, but I want to go back to the numbers.

The margins in electronics are very small. You have a 7–8% margin because the material is super expensive. If you save three minutes on one machine, there are three machines per line, and the line is working 20 hours for six days a week, you can multiply the three minutes that the machine stops because you need to bring a new reel and change it since it didn’t bring it on time. When you’re thinking about it from the basic level, you would say, “I don’t need to invest $100,000 in a software piece that will save me three minutes.” However, there is no problem here.

Johnson: That three minutes of time, accumulated, can double your margin.

Reuven: Exactly. You should not think, “I don’t have a real problem because three minutes is not a big deal. I will get the reel and replace it. No problem. It’s fine.”

To read the rest of this interview, which appeared in the April 2020 issue of SMT007 Magazine, click here.