Operating Effects Due to Digital Transformation
In the area of digital transformation, the industrial Internet of Things (IIoT), business analytics, and 3D printing are all impacting manufacturing operations. From a customer expectation standpoint, direct-to-consumer sales are changing how manufacturers need to operate.
Internet of Things
- In manufacturing, the Internet of Things (IoT) is often referred to as the Industrial Internet of Things (IIoT). IIoT focuses on machine learning, big data, and machine-to-machine communication, which allows for more efficient and reliable operations.
- In the industrial age, operational success in manufacturing was often measured by how stable the production line was. Any changes to the process typically resulted in delays and defects. With the adoption of IIoT, change is expected and welcomed, as the sensors that are placed on the manufacturing equipment are constantly providing data that provides insights into how the process can be tweaked for greater efficiency and production.
- In addition to providing data on how production can be improved, IIoT also provides data on equipment health. This has a major impact on manufacturing operations because it is no longer necessary to wait until a piece of equipment breaks down in order to fix it. Rather than having extensive downtime when a breakdown occurs, IIoT allows for potential problems to be identified and dealt with before they have a detrimental effect on manufacturing operations.
- As described above, due to IIoT, manufacturers can collect tremendous amounts of data on their operations, and one way that can be used is to identify potential problems with equipment. However, the data can also impact many other aspects of operations.
- There are many tools that can be used to automate the quality testing process. While traditionally this has been done manually, now x-ray scan, photographs, and high-tech testing software customized for each product component can be utilized to automate the process each step of the way. This helps eliminate variations in objective judgments made by inspectors.
- Big data can also be used for product optimization. The data that is collected can be analyzed to determine any parameters that may be responsible for varying levels of quality in a product component. Once identified, these parameters can be changed to make improvements.
- Data analytics can also help optimize the supply chain processes by analyzing how long processes take and determining the best time to place orders. Data on transportation time, potential disruptions, and how quickly supplies are used in the production process are all pieces of information that can help improve the supply chain.
- 3D printing is considered additive manufacturing, while most production methods are subtractive. The difference is that there is significantly more waste with subtractive manufacturing.
- Because 3D printing is portable, as compared to traditional assembly line manufacturing methods, it will impact the operations of companies as they are able to produce both components and products closer to where the customers are. Not only does this have the potential to decrease the use of traditional assembly lines, even those utilizing new technologies, but can also impact the supply chain.
- 3D printing is a form of "on demand" production that has the potential to reduce the need for goods to be transported both locally and globally. With fewer individual components potentially needed to manufacture products, logistics and warehouse operations will likely be impacted by the change.
- Some industries where 3D technology is being used, or is expected to be used in the near future, are oil & gas, chemicals, automotive, aerospace, medical, food, and construction.
- Direct-to-consumer sales are happening for both B2B and B2C companies. Customers are becoming happy to cut out the middleman and buy directly from the manufacturers.
- Since many manufacturers are only set up to accommodate sales to distributors, this change will require operational changes to be able to ship directly to consumers. This could include packaging changes, establishing new shipping partnerships, or working with third-party fulfillment partners.
- Additionally, marketing and communication processes will have to change to focus directly on the end user rather than distributors.