The Value of Smart Manufacturing in 2020

The pandemic has created unprecedented changes in the American economy for the last several months. Some companies have shut down and furloughed their employees, while other companies that manufacture food, PPE, or medical supplies are seeing skyrocketing demands for their products, and they’re fighting to keep up with the increase in orders.

Other companies are beginning to open back up, bringing their associates back to work, while still others are waiting for a few months longer before they re-open.

Depending on the company and the industry, some companies are thinking about upgrading to digital technology, the Internet of Things (IoT), artificial intelligence, smart manufacturing, and other technological advancements.

What are the benefits of smart manufacturing?

One of the things I appreciate about smart manufacturing is that it’s possible to reduce the labor overhead needed to operate a department.

An example of smart manufacturing technology.While it’s not strictly manufacturing, here is a story that illustrates the benefit: Eight or nine years ago, our office went paperless. We wanted to move all documents to the cloud, where they could be protected, but still accessed from anywhere. This meant an end to filing cabinets and paper copies, and an introduction of software management systems to process all that data.

One department this affected was our Accounts department, which was responsible for paying invoices and seeing that our invoices were being paid.

One of our steps in going paperless was to use billing software to electronically reconcile our invoices with our order forms and packing lists. Before the change, in order to reconcile a transaction, we had to pull each of these documents (and more) just to make sure everything matched up.

We needed to know that the items we ordered matched the items we received, which had to match the items we were invoiced for. We had to do the same thing for our customers’ orders. And since we had hundreds of transactions every week, this was an ongoing process with a lot of paper forms being shuffled on and off of a lot of people’s desks.

By going paperless and doing everything with specialized software, we were able to reduce our department to a single person. We could easily manage transactions, comparing all documents at once. We also reduced our invoicing errors to zero. All told, we were able to better utilize our staff and reduce the waste that was coming from so many errors.

Running a paper-based operation like that during the pandemic would be nearly impossible because most people are working from home. But by working on a cloud-based system where all that data was available online, you could have Accounts support staff literally anywhere in the world.

Basically, companies that previously made the transition to smart technology are seeing benefits to it. Whenever possible, their knowledge workers are working from home. That may not help the manufacturing associates, but it does reduce the number of people in the office, which is a start. And it lets your back office staff stay productive while staying safe.

With smart manufacturing systems already in place, companies can produce as much or as little as they need. It’s easy enough to dial back production so you’re still filling orders, and keep your existing associates on the payroll. And when you need to increase production again, it’s just a matter of turning up the dial and either working longer or working faster.

Should you invest in smart manufacturing right now?

Actually, now is not the right time to start investing in smart manufacturing, unless you’ve got a lot of cash just lying around.

I recommend that companies wait and see when there will be a more robust and safer recovery. Today, our economy and our situation is totally unpredictable. Companies are starting to open up, and people are returning to work and trying to resume social outings, but we’re already seeing increased infection rates following a few days behind.

However, I believe there are a few instances where some companies can start upgrading some of their smart technology to make it possible for them to stay in operation.

I recently read an article asking whether “What’s the value of smart manufacturing technology at a time like this?”

It was an interesting panel discussion that looked at how AI could be used for certain customer support functions, among other upgrades like AI-based inventory management and 3D printing.

While I don’t think upgrading inventory management and 3D printing are a good idea right now (it’s too involved and too expensive at this time), I do think this could be a good time for some companies to look at AI-based systems as a way to allow fewer people to do more work from a safer distance, and still keep the company operational.

For example, you can use an AI-based chatbot to handle basic customer service issues, and escalating to a human when a problem is too involved or personalized for the system to handle. This takes the basic and minor problems off their plate, so they can spend more time solving complex problems.

But solutions like inventory management and 3D printing are rather expensive to start at this time, so unless you’ve already got the money or have guaranteed income as a result of the upgrades, you should hold off.

Wait and see what the next few months bring in terms of people returning to work and school, and how the pandemic affects our recovery, before investing in a lot of smart manufacturing that ultimately may not pay for itself.

That way, when the time is right, you’ll be able to make a smart decision that pays for itself.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business, including upgrading to smart manufacturing. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Martinelle (Pixabay, Creative Commons 0)

Author: David Marshall
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.