Adopting Artificial Intelligence in Your Factory May Be Difficult

Artificial intelligence is making the news everywhere, but it’s not as prevalent and overwhelming as you might think. And it’s not the do-or-die technology they’re trying to make it seem, which means manufacturing companies don’t have to rush to embrace it or face imminent failure.

For one thing, AI has been around for many years. It’s not a new thing that has only come about in the last couple of years. AI has been transcribing our conversations, automating our tasks, and crunching our big data since the turn of the century.

AI is being used in manufacturing as well, although there are times and applications where it will ever be used. In manufacturing, if you’re involved in a utility-type product that you make over and over, then artificial intelligence will really be limited.

It’s not like the entertainment industry, where you can actually clone an actor or a political figure; you can have generative AI (AI that creates something brand new) duplicate you and your words, so you can send out new words with your political message.

Want George Washington to endorse your political campaign? You can do it with generative AI to create something brand new.

Artificial intelligence makes it possible to use robots in manufacturing operations.
Mercedes-Benz U.S. International Plant located in Tuscaloosa County. Original image from Carol M. Highsmith’s America, Library of Congress collection. Digitally enhanced by rawpixel.
But in manufacturing, per se, the process is predictable and repetitive. You don’t need AI to create that process, you just repeat it over and over and over. Even if you have digital manufacturing machines, they automate the replication, which is only a series of computer commands. There’s nothing there that AI needs to replicate.

Your Customers’ Needs Are Constantly Changing

What isn’t predictable is the changing needs of the customers; they are completely unpredictable. Your customers change all the time, their priorities, their profits, and their own business needs change along with it. That means staying abreast of the changing needs of the customer helps you to stay relevant and is what you should be focusing on.

There’s also no amount of generative AI — at least right now — that will tell you, “Tell me what ABC Company is going to order from us in the next 12 months.” You can’t throw that into ChatGPT and come up with a useful response.

In fact, when I asked ChatGPT that question, it told me:

I’m sorry, but I don’t have access to real-time data, and my training only includes information available up to January 2022. Therefore, I don’t have specific details about future orders from ABC company or any other company.

To obtain information about ABC company’s future orders, you should contact the company directly or refer to any communication or contract you may have with them. If you have a specific question about a product or service, I can try to provide general information or assistance based on the information available up to my last update.

So, manufacturing executives are in no danger of being replaced by AI anytime soon.

Manufacturing Is Not Easy To Change

Manufacturing is difficult to change, especially if it has been around for a while. It’s sometimes easier to start a new manufacturing company than it is to get an old one to change. It’s often not easy or cost-effective to implement emerging technology into an existing factory

For example, in the automotive industry, it took the manufacturers 20-odd years to incorporate robotics into vehicle assembly. And because it was such a high-capital investment, making that change was not quick or cheap.

It was that way when we automated our Duoline factory — the challenge was almost daunting, and I wasn’t sure if we should even do it, but I knew it needed to happen if our business was going to ever succeed.

In fact, the only way we got it done was to tear the entire factory down and start all over.

Our Duoline factory made fiberglass liners for oil tubulars, which help cut down on the corrosion of the interior of those steel pipes. It was an old factory that was very inefficient and labor-intensive, with a lot of environmental remediation and pollution. Our biggest costs were the labor and environmental remediation.

So we tore down the existing plant and built a whole new factory, brought in automated machines to usher in our digital manufacturing era, and created a system that cut down the number of people from 200 to 40. Plus, we were able to quadruple our output; reduce our errors and rejections from $2.5 million per year to $250,000; and cut our environmental remediation costs from $1 million per year to literally $0.

All told, the ROI of the new factory took only 8 years.

We had been doing it the old, dirty, labor-intensive way for 30 years before we finally realized we needed to do it another way, but we couldn’t just make upgrades and repairs. We had to start from ground zero as if we were creating a brand-new manufacturing business.

That’s the kind of effort it may take to automate your factory or bring AI into the mix.

Customers Don’t Always Accept Your New Changes Either

Managing changes internally is only part of your problem; managing them externally is much more difficult.

It was already a challenge to get the company to accept the changes in our new factory, but it was also a challenge to get the customers to accept it. They weren’t ready to just openly embrace our new way of doing things.

They had been relying on the fact that our products were the same products they were receiving 20 – 30 years ago. And all of a sudden, we’re giving them a whole new way of making things?

Your customers need to satisfy themselves that they’re getting the same or better than what they were getting. They worry whether the product will perform the same or better. And just saying trust me doesn’t work, so you have to go through excruciatingly painful costs to prove the product meets those requirements.

We had to do that at Duoline, and it was difficult to measure our success because we weren’t making a daily-use product. In some cases, I’m sure some of the customers would have decided that it was just cheaper to change than go through a re-qualification process, so we may lost a few customers.

But we paid for that re-qualification and went through all the testing necessary to meet those new expectations.

In the end, we had customers who were more pleased when everything was done. We also went on an extensive PR campaign to bring in customers and show them so they could touch and feel what we were doing. That was pretty expensive, seeing as how many of them were international, but it worked out in the end.

What Does That Have to Do With AI In Your Factory?

Any time you make major changes to the way your factory operates, even if it’s new machinery, new processes, or a whole new method of production, you’re going to have to tell your customers about it. In some cases, they’ll want to re-certify and re-qualify what you make so they can be sure it meets all of their specs.

You may have found a method that will speed up your production, reduce errors, and save you a lot of money in waste and overages, but it doesn’t do you any good if your customers refuse to buy the new product. Now you’re headed for bankruptcy, you’re just going to get there a lot more efficiently.

When you look to make major upgrades with AI and automation to your plant, talk to your customers first and find out what they will expect in terms of re-qualification. Get their input and their commitment, and they may even become a strong partner in helping you succeed in your automation efforts.

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 pivoting within their industry. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Carol Highsmith (RawPixel, 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.