Are your manufacturing operations using outdated methods to address current challenges? The market is evolving, with new competitors delivering superior products at a faster pace, while your operations struggle to keep up.

Outmoded and disconnected technology hinders innovation and impacts downtime and production losses. How can you meet revenue targets, enhance production, and adapt to new technologies to remain competitive? The solution lies in embracing digital transformation and becoming a leader in the Factory of the Future (FoF) through smart factory technology. A Deloitte Industry 4.0 survey reveals that 94% of executives consider digital transformation their organization’s top strategic initiative.

This article provides a step-by-step process, created by smart factory experts, to help you understand where you are in this transition and jumpstart your digital transformation journey. 

Additionally, this article serves as an introduction to our ebook, which offers a comprehensive overview of this step-by-step guide. 

How will the adoption of an IIoT-powered smart factory solution impact your operations and your employees? Find out.

DOWNLOAD NOW – A Step-by-Step Guide to Digital Transformation Through  IIoT Smart Factory Technology

Step 1: Define Why Digital Transformation Matters to Your Operations

First, let’s define what digital transformation means. The Institute for Digital Transformation defines it as, “The integration of digital technologies into a business resulting in the reshaping of an organization that reorients it around the customer experience, business value and constant change.”

Some of the common visions that manufacturing operations have of digital transformation with smart factory technology include:

• Make smarter decisions based on real-time production data.
• Gain an understanding of OEE and machine downtime.
• Standardize processes and metrics to measure.
• Improve product quality and reduce waste/scrap to become more sustainable.
• Have a centralized system with integrated ERP data.
• Reduce high labor costs.
• Reduce time to market.
• Achieve a continuous improvement culture.
• Remove departmental silos and connect data, people, assets, and processes.
• Create a seamless customer experience.
• Future-proofing operations to withstand unexpected events.

Step 2: Assess Digital Maturity – Identify Plant Personality

You can’t know where you are going without knowing where you are.

In order to achieve your operation’s digital transformation visions, it’s important to understand the level of digital maturity in your operations. Identify where your technology and processes fall under the Plant’s Personality chart on the next page. Gain an understanding of what is missing in your current technology ecosystem to map out your digital transformation journey.

What is Your Plant’s Personality?

1. Whiteboards & Spreadsheets

Your operations rely on spreadsheets, manual whiteboards, paper schedules, and lack automation. Operational data is collected manually and often inaccurate or unavailable. 

2. Solo Systems

Your operations have one or more systems in place for digitization, however, they are standalone systems that lack bi-directional data communication and information is not centralized.

3. Digital Novice

Your operations have some automation in place and are showing interest in full digital transformation. You are beginning to explore the benefits of connected, flexible IIoT digital solutions. 

4. Data Explorer

Your operations have implemented some digital solutions and want to drill into more meaningful real-time data to make smarter decisions and engage employees 

5. Digital Trailblazer

Your plant is digitally mature with connected and integrated IIoT solutions to manage production processes. You are knowledgeable of the benefits of scalability and enterprise-wide adoption of new smart factory technology. 

Step 3: Understand Lean Manufacturing Philosophoy

Hundreds of manufacturers embrace the principles of lean manufacturing principles to achieve their benchmarks and full potential. The interconnectedness between  lean objectives, processes, and the appropriate smart factory technology forms a powerful relationship. This combination can significantly elevate operational performance, continuous improvement, and company culture in a relatively short time frame.

Essentially, lean manufacturing, also known as lean production, is a philosophy based around the elimination of waste within a system. It was first pioneered by the Toyota Production System (TPS) in the 1990s and has become widely used throughout the manufacturing industry.

If you want to learn more about lean manufacturing, take a look at our blog posts: 

• 7 Key Areas of Improvement: Examples in Lean Manufacturing
• 5 Essential Lean Manufacturing Metrics in i4.0
• Understanding Lean Manufacturing – Principles, Techniques, and Benefits

Step 4: Establish Lean Benchmarks

If done correctly, benchmarking can be an invaluable source of new ideas,a confirmation of existing practices, and a dynamic catalyst for elevating  performance too much higher levels. 

Benchmarking provides a systematic approach to  comparing products, strategies, programs,and processes. It involves understanding how other manufacturers conduct their processes to attain targeted performance.

By setting appropriate benchmarks aligned with  lean objectives and harnessing  the right data through smart factory technology, operations can identify which

processes require enhancement. The goal is to transform  these insights into actionable steps to improve the bottom line.

A multinational food manufacturing company and Shoplogix customer, had a

long term digital transformation execution strategy of 5+ years. They established lean benchmarks that focused on gathering machine truth, accurate data collection, improved processes, and engaging employees which included:

• Improving Yield & Efficiency
• Increasing throughput
• Accelerating KWS adoption
• Driving employee engagement and action
• Unlocking value from data
• Flexible collection methods
• Advanced visualizations analytics and AI 
• Enabling adoption
• Standardizing reporting 
• Real-time analytics
• Accelerating decisions 

With the help of the Shoplogix smart factory platform, they were able to gain the necessary data and KPIs and make adjustments to improve performance.

Step 5: Understand Smart Factory Platforms

Smart factory, Industrial Internet of Things (IIoT), Industry 4.0 (I4.0), big data, industrial connectivity, industrial transformation (IX)—with a sea of new terminology, you can quickly become overwhelmed by information if you’re not sure what the best fits your operations. In this chapter, learn how an IIoT smart factory system can digitize your shop floor.

As discussed, for a factory to fully digitize, optimize lean practices, and attain efficiency gains, it requires a smart factory platform built on four key pillars: assets, data, people, and processes.Utilizing smart factory software in a connected factory setting enhances decision-making regarding lean production. 

Essentially, a smart factory integrates all machines and existing systems, including ERPs and MES, as well as legacy systems. It automates production monitoring and visualizes the performance of both assets and personnel. Additionally, it generates analytics and supports predictive and intelligent decision-making.

Step 6: Choose the Right Vendor

Searching for new manufacturing technology requires significant time and financial resources. It’s important to follow software search best practices to ensure that you don’t add unnecessary time to the project. Building in-house software can seem like the best decision for most manufacturers who become overwhelmed with the search process. In reality, most software build projects cost more than purchasing an out-of-box solution from a seasoned provider.

With over 20 years of experience in the manufacturing industry, our smart factory experts have guided countless manufacturers through the search process. To help software searchers, our experts created a comprehensive smart factory software search requirements checklist.

DOWNLOAD NOW – A Step-by-Step Guide to Digital Transformation Through  IIoT Smart Factory Technology

Step 7: Implement Real-World Best Practises

Having implemented hundreds of  ROI-based smart factory capabilities and processes for manufacturers, we have  gathered actionable best practices and lessons learned that have consistently driven results.

One of the key learnings of digital transformation with smart factory technology adoption is to integrate technology with data, assets, people, and processes to achieve fast ROI, sustainable results and adopt continuous improvement culture. Engaging people is one of the most important characteristics of a smart factory.

Maintenance Team: Will be alerted on time for issues, and have access to downtime and losses. 

CI Team: Gain visibility into bottlenecks to identify areas of improvement. 

Quality Team: Input scrap and have visibility into alerts that are happening on the line to take fast action. 

Scheduling Team: Know when production runs are going and if they are going to hit due dates. 

Material Handlers: Alerted on consumption to bring product to line and prepare for upcoming changeovers. 

Management: Easily access dashboard views to monitor production and help teams to work together. 

Executives: Drive standardization and scale adoption enterprise-wide.

Step 8: Smart Manufacturing Metrics

Turning data into meaningful insights is not an easy undertaking especially when dealing with high volumes of information. Focus on these five most important smart manufacturing metrics that support lean initiatives.

Adoption

I4.0 technology must be adopted by employees to attain ROI. Measure an overall adoption score of individual tasks and interactions with new software at a machine, plant or multiple plant. 

Keys to monitor include: 

• Machine downtime documentation 
• Comments provided 
• Scrap recorded

Accountability

Accountability closes the loop on issue resolution. To assign actions with resolution dates enables manufacturers with the ability to measure how effective a plant is on resolving problems. 

Performance

Machine/Job run speed targets are important to measure potential throughput. Inaccurate rates can mask issues so it’s vital to monitor OEE with a true smart factory technology/platform. 

Metrics to track include: 

• Machine truth reporting in real-time
• Root downtime cause analytics 
• Employee performance
• Process improvements

OEE Loss by Role

Support accountability to drive adoption and CI improvements. 

Roles to track include: 

• Operators: Are they arriving late, leaving early, extending break time, or having unexplained idle time?
• Maintenance: How long does it take for them to arrive on the line and complete repairs following an alert?
• Continuous improvement: This team should take ownership of micro-stoppages, line bottlenecks, and mechanical process design flaws. 
• Material handling: Are they taking responsibility for reducing changeovers, material shortages, and material flow optimization.
• Changeover teams: To gain deeper insight into changeover losses, split changeovers into multiple stages. 
• Quality: Focus on scrap rework and quality downtimes.

OEE vs. OEEc

OEE tracks performance during scheduled hours, and OEEc monitors  performance continuously, 24×7. OEEc emphasizes the improvement of the metric,rather than merely establishing it. By removing the variable of scheduled time, OEEc becomes  a more reliable metric for gauging performance trends and comprehending the reasons behind them.

Step 9: Establish Realistic Outlook

Manufacturers often aim for rapid,  enterprise-wide technology implementation. However, in many cases, they start with a thin layer approach to connectivity. This strategy allows them to evaluate ROI and manage budgets effectively. For instance, Shoplogix collaborated with a leading food and beverage manufacturer to enhance order fill rates by analyzing scheduling processes. By connecting only to essential data points, such as work order information and job status updates, they adopted a controlled approach to performance improvement. This approach ensures a swift ROI and facilitates efficient scaling for enterprises. This article also introduces our ebook, offering a detailed step-by-step guide on this process.

Step 10: Define Return on Investment

When considering investing in an IIoT platform such as a smart factory software solution, one of the most important factors that organizations tend to consider is the level of profitability that the tool can offer. 

There are several different types of ROI to consider:

Hard Returns

• Cloud-base solution
• Increase in productivity
• Increase in OEE – for example, average improvement to expect for OEE is 9-13%
• Reduce waste and loss of material
• Improved and increased quality 
• New technology should simplify information and reporting
• ERP connectivity and integration with other systems helps workflow – sales orders can flow through ERP
• Facilitate a paperless system 
• Connects all siloed departments with real-time visibility

Soft Returns

• Wiser, quicker decision making
• Optimization leads to more innovation
• Standardization of processes across the enterprise

Last Step (Step 11): Implement Change Management

Change Management is a structured process that gets the right people involved at the right time to ensure everyone knows how and when to perform the new procedure and is committed to using the new process.

The most important strategy for effective technology adoption is communication. Good communication is not just sending out a few sporadic emails a few days before the new technology is implemented, an enterprise-wide solid communication plan needs to be present months before the adoption process.

A fine-tuned change management framework with clear-defined stages is necessary for the effectiveness and efficiency of smart factory adoption. CEB research discovered that 66% of change success factors are related to talent. Focus on your people to greatly increase your chances of smart factory adoption success.

DOWNLOAD NOW – A Step-by-Step Guide to Digital Transformation Through  IIoT Smart Factory Technology

Final Thoughts

By now, you should understand how an IIoT smart factory, driving digital transformation, can deliver substantial value to your operations and your customers.

Forming a step-by-step lean-based strategy and thin layer implementation approach will increase the chance of digital transformation success. Finding the right smart factory technology partner is also just as important—a partner that will help your operations become more consumer-focused through improved processes as quickly as possible.

Shoplogix helps manufacturers realize their digital transformation vision. With almost 20 years of experience helping manufacturers in sectors such as Food and Beverage, CPG, Industrial Packaging, Steel, Automotive, and more, we offer the right experience, leading IIoT technology, innovation, and dedicated people to improve your bottom line.

Ready to start your digital transformation journey with Shoplogix?

Contact us today!