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Driving Smart Manufacturing with Provable ROI

RRAMAC, Tom Cravens, Pacific Design and Manufacturing Show, IIoT, smart manufacturing, SaaS, OEE, predictive maintenance
Many manufacturers are basing the adoption of smart manufacturing on predictable ROI.

The move toward advanced manufacturing is predicated on the belief it will deliver continuous improvement and will ultimately result in both cost savings and productivity improvements. Manufacturers are hesitant to invest in these smart capabilities unless the return on investment (ROI) is clear and quick. The initial investment in smart manufacturing can seem overwhelming, and the required IT and OT hours can be difficult to predict.

Tom Craven at the Pacific Design and Manufactruing Show. Photo courtesy of Design News.

These factors make it difficult to make a compelling case for the ROI in all instances. Some manufacturers are hedging their smart-manufacturing bets by using outside, hosted systems such as Software-as-a-Service (SaaS). This approach can help companies reduce the risk of investment in new software, hardware, and the corresponding staff to run the new tools. The service model can often deliver measurable and predictable ROI soon after deployment.

During the session, Smart Manufacturing Models with Sustainable ROI, at the Pacific Design and Manufacturing Show last week, Tom Craven, VP of product strategy at RRAMAC explained the importance of finding a clear ROI before investing in advanced, connected manufacturing.

Return on Investment Is the Primary Goal

The essential purpose of intelligent manufacturing systems is to improve efficiency, quality, and the overall optimization of plant processes. This in turn leads to the ultimate goal: ROI.

“IIoT, smart manufacturing, industry 4.0, whatever you call it, it’s mostly the same thing. If you put anything on the internet that is industrial, it’s IIoT,” said Craven.

Yet the connection to the internet is not necessarily the criteria for advanced systems. Predictive maintenance is a major step toward an intelligent system even without web-based connectivity. “Smart manufacturing does not always include the internet,” said Craven. “There can be islands of data there are still smart manufacturing. Industry 4.0 includes both internet and smart manufacturing – but what we really want is ROI.”

As well as ROI, competitiveness is a factor in adopting new technology. Companies can’t afford to be left behind by their competitors. “What happens to your company if you don’t develop smart manufacturing? Do you want to be Uber or Yellow Cab?” said Craven. “Yet while competitiveness is a major concern, there still has to be ROI in order for manufacturers to justify the shift to smart manufacturing,”

Taking the ROI from Improved Maintenance and OEE

Part of the move to intelligent processes is creating a feedback loop that tells control personnel what is happening on the manufacturing line. “Sometimes smart manufacturing is a matter of collecting a handful of alarms,” said Craven. “Your car will now tell you when to change your oil. Industrial machinery is beginning to do this. As you get intelligence into your maintenance operation, you’ll find you don’t have to do maintenance as often. Asset monitoring is the low-hanging fruit of IIoT.”

Eliminating failure is a huge step forward, but intelligent systems offer deeper levels of efficiency. “Machine learning is more than just failure prediction, it’s optimizing the process while moving into continuous improvement,” said Craven. “Increasing output on the same production line is the goal of continuous improvement. Look at Overall Equipment Effectiveness (OEE), which is the gold standard for continuous improvement. Hosted OEE can get you to ROI quickly.”

Measuring OEE is a major step toward potential improvement. “Most OEE that isn’t measured reaches about 40% of potential effectiveness,” said Craven. “If it’s measured, it usually moves up to 60%. But with work, you can get it up to 90%.” Craven notes that manufacturers can obtain continuous improvement by using a hosted system that doesn’t require investment in equipment and the personnel to run the equipment.

Rob Spiegel has covered automation and control for 17 years, 15 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years, he was owner and publisher of the food magazine Chile Pepper.

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