Executive Summary
The coronavirus pandemic is highlighting that, in our modern connected world, manufacturers must now be ready to respond promptly to Black Swan events that pose challenges for business operations and business continuity, both in the short term and for extended periods of a year or more. Manufacturers must apply industry best practices for remote work, online conferencing and collaboration, and manufacturing operations management to satisfy existing customer needs, mitigate supply chain disruptions, and maximize employee safety. They should leverage Industry 4.0 technologies and manufacturing key performance indicators like Overall Equipment Effectiveness and Line Utilization to ensure they are optimally managing through crisis periods and that risks to the company, customers, and employees are minimized. Manufacturers that rise to the challenge can emerge from a crisis stronger and more efficient than ever and poised for future growth with a base of grateful customers, suppliers, and employees.
Coronavirus challenges for manufacturers
Remember the good old days when your biggest business risk was trade conflicts and tariffs? The coronavirus pandemic is challenging manufacturers to continue satisfying customer needs while managing through unprecedented levels of uncertainty.
- As the pandemic spreads from country to country, manufacturers may be required by local public health authorities to suspend manufacturing operations on short notice in specified regions for unknown periods of time.
- Suppliers may have their own work disrupted, causing problems for the manufacturer even if the manufacturer’s own sites are operating normally.
- Where operations continue, manufacturers may have to manage through unprecedented levels of absenteeism for any number of reasons, including personal medical rehabilitation, contagion prevention, childcare arrangements, difficulties obtaining necessities for families or care of elderly relatives or other vulnerable family members.
- Manufacturers may need to flexibly shift manufacturing operations from one location currently seriously affected by the pandemic to other locations that are not, and then shift manufacturing operations back yet again as conditions change.
Optimal instrumentation of manufacturing assembly lines can help manufacturers overcome these challenges with the least disruption possible.
Automating operations monitoring, reducing on-site staffing, and social distancing at the office
Even today, manufacturers often report on daily throughput, machine utilization, line utilization, and downtime reasons manually. Manual reporting often means that a manager may be walking the manufacturing floor in close contact with machine operators. Implementing automated reporting of standard key performance indicators can reduce the number of staff required on-site and enable better social distancing.
A leading semiconductor manufacturer had already implemented predictive maintenance on its fab equipment, sharing data to the cloud. Even before they were affected by a shelter in place order, to reduce employee risk, they changed their staffing plan to have one engineer on site at a time in rotation instead of having twenty or more engineers at the fab simultaneously. Technology is enabling engineers to remotely see regular updates on critical levels and use predictions to know better in advance when they might need to go in and address an issue. This allows them not only to be efficient from a machine process perspective but also can allow them to better coordinate while maintaining social distancing.
For staff who are permitted to come to work and must do so to perform their job function, manufacturers are putting in place hand washing stations to make complying with public health guidance easy, requiring staff to wash hands before entering the workplace, and requiring staff to comply with social distancing guidance, particularly at times like lunch hour where staff might ordinarily sit in close proximity.
Managing temporary production shutdowns
Since World War II, force majeure production shutdowns have been almost unknown. For the next 12 to 18 months, they may be commonplace. We have already seen public health lockdowns and shelter in place orders in China, Italy, France, and a growing number of U.S. states. As we saw in Hubei Province and the San Francisco Bay Area, manufacturing operations may be halted by government order only weeks after the first cases of coronavirus are recognized in a local area, and shutdowns in a location may continue for weeks until the local outbreak is brought under control. More shutdowns are likely to come as coronavirus continues to spread worldwide until a vaccine is developed and deployed. Manufacturers must be prepared to have operations suspended at any location on only a few weeks of notice. When production resumes, manufacturers must be able to have daily visibility from operators to the CEO into progress towards a return to full productivity.
Like other manufacturers in China, this leading manufacturer was required to shut down manufacturing operations at its Shanghai factory in February to help China’s fight to stop the spread of coronavirus. They already intended to deploy a new Manufacturing IoT solution from Arch Systems to provide global visibility into manufacturing Key Performance Indicators (KPIs) and the status of production operations. During the shutdown, global team members outside China continued working on the underlying technology infrastructure so it could be implemented once Chinese members of the team returned to work.
As employees rushed to restart production operations after an unprecedented supply chain disruption, they deployed the manufacturing IoT monitoring solution to enable a rapid return to operations. A combination of hardware and software monitored the status of key machines on each assembly line and reported their operational data into the cloud and automatically calculated KPIs like Machine Utilization (MU) and Line Utilization (LU). As the company and its suppliers work to resume normal production operations, there is intense interest among company executives about their progress. The cloud-based Global KPIs Solution gives executives in the California-based headquarters and elsewhere in the world full visibility into Shanghai and other sites’ progress as they rely on remote visibility to resume operations.
Shifting manufacturing operations and producing new products
Trade tensions and rapid changes in tariffs were already forcing manufacturers to flexibly move product assembly between countries on short notice. Until a vaccine becomes generally available and the pandemic is brought to an end, coronavirus may also force manufacturers to shift critical manufacturing operations from location to location based on local conditions and public health guidance. Manufacturers must be ready to stand up production operations in new locations faster than ever before. This can only be accomplished with a high level of remote visibility.
During the height of the epidemic in Hubei Province, diverse companies chose to begin manufacturing critical health care products like personal protective equipment and masks in order to satisfy the massive surge in demand, both for use by health care workers and for the protection of their own staff. Facing global shortages of masks, gowns, and ventilators, manufacturers in other locations like Ford, GM, and Tesla are now seeking to begin manufacturing new products like ventilators on extremely short notice.
As they ramp up production lines in new locations or for new products, manufacturers will need to monitor progress on throughput and Overall Equipment Effectiveness so manufacturers can assure customers of their ability to satisfy contractual commitments and can do so profitably, on a breakeven basis, or with tolerable short-term losses.
Re-configuring assembly lines
Historically, manufacturers often placed stations on an assembly line as close together as possible to make the best use of floor space, minimize the length of conveyors, and enable close collaboration between workers. Until a vaccine ends the pandemic, manufacturers may prefer to change layouts to maintain specified distances between adjacent stations, or they may choose to install physical barriers or enclosures for worker safety. As lines are reconfigured, executives will need continuous visibility into production and OEE to track toward a resumption of normal operations.
Maintaining inventories of parts
For decades, manufacturers have sought to minimize costs by applying Just In Time manufacturing techniques and minimizing inventories. Manufacturers around the world have seen two phases of impact. First, the epidemic in China interrupted manufacturing of products and the supply of parts from there. The spread of the pandemic to the rest of the world is now interrupting manufacturing operations in other locations and causing a general decrease in demand for some products as well as requests from the government that some manufacturers temporarily shift assembly lines from consumer goods like automobiles to critical products like ventilators.
Coronavirus supply chain disruptions may force change for at least the next twelve to eighteen months during which manufacturers choose to maintain higher on-site inventories of parts than in the recent past in order to reduce the risk of downtime. Inventories require storage space, so manufacturers may have to reallocate space at production sites from assembly lines to parts storage. That may force difficult decisions about which assembly lines to keep running and which to shut down in order to free up space for higher-priority products and inventory storage.
Managing supply chain risk
To avoid being surprised by running out of parts and forced to idle lines unexpectedly, manufacturers need continuous transparent visibility into the status of production operations at their suppliers. Once a “nice to have,” coronavirus-driven instability has made this visibility mandatory so manufacturers can rapidly compare requirements versus inventories and seek alternate sources of parts in time to avoid shutdowns. Manufacturers now need secure, continuous visibility into throughput and overall equipment effectiveness at their suppliers to ensure they’re making decisions based on accurate information and avoid being caught off guard by outages.
Enabling Industry 4.0 solution requirements during the coronavirus pandemic
As part of the manufacturer response to the coronavirus pandemic, Industry 4.0 solutions must:
- Work with any existing industrial machines, whether new or legacy
- Be self-deployable by staff on-site with remote support as needed to enable deployment during periods where vendor site visits are not possible
- Deploy into existing shop floor environments where it may be challenging to provide power or network connectivity to machines in some locations
- Standardize incoming data from diverse vendors, machines, and models
- Calculate standard manufacturing Key Performance Indicators like throughput, Overall Equipment Effectiveness, Line Utilization, and Machine Utilization
- Provide global visibility into manufacturing KPIs so executives can make the best possible decisions based on up-to-date data
- Provide open APIs so that IT and operations staff can create additional flags, analytics, or machine learning implementations to flag issues and optimize performance over time
Strengthening manufacturing for the future
The coronavirus pandemic is putting unprecedented sudden pressure on an already-strained manufacturing sector throughout the value chain. Manufacturers who make use of downtime to plan for the future and apply best practices to lead through the crisis can emerge from the crisis stronger and more efficient than ever and poised for future growth with a base of grateful customers, suppliers, and employees.
Eric Krock is the Head of Product at Arch, driving the evolution of our products and ensuring our customers are delighted. Eric brings over 15 years of enterprise product management experience at startups and large enterprises. At Arm Holdings, Eric managed the growth and rebranding of Arm’s partner program for enterprise IoT partners. At LifeMap Solutions, he partnered with Apple and Mount Sinai Health to develop the Asthma Health mobile health app, one of the first six apps to launch on ResearchKit. Prior to that, he was responsible for Kontiki’s solution for secure peer-assisted content delivery, resulting in an acquisition by VeriSign, where he launched a global cloud-based enterprise content delivery network. Eric is passionate about using technology and evidence-based best practices to create a better, sustainable world for the children of today.