Leverage Data-Driven Manufacturing for Greater Productivity, Efficiency and Profits
SME – Smart Manufacturing SeriesCincinnati, OH – May 24, 2017Presented by: John Rattray, Senior VP, Sales & Marketing, MEMEX Inc.
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Agenda - What will be covered
AgendaFactory of the future and Production Visibility
Data Streams Required to Fuel an IIoT Implementation
Situational Awareness in the IIoT era
Areas to Explore for Benefits - OEE
Specific Examples of Results Achieved – With REAL numbers...
Additional Transformational Benefits…..
Summary
Questions and Answers
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The Drive Towards Connectivity
Connectivity is an essential part in generating manufacturing big dataDrivers include:
• Higher customer satisfaction
• Lower costs
• Competitive agility
• Greater Productivity
Ubiquitous connectivity where the business runs on the network
SUPPLIERS
MANAGEMENTSHOP FLOOR
CUSTOMERSInformation
Enterprise
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Work Order Scheduling and Results Reporting
Direct To / From ERP
Evidence Based Real time data collection at each machine and Discrete Process on the
shop floor
Process Improvement , Benchmark Analysis,
Corrective Action, Repeat
Drive costs out of the manufacturing process, leading to higher capacity utilization and higher
profits for the same level of effort
WIP, Raw Material, Valuable Tooling, and Finished Goods Tracking with RFID
& ERP
Horizontal & Vertical Integration
Vertical: Shop Floor To Top Floor, Integrating and optimizing all equipment and processes, from machine sensors to the ERP system
Horizontal: Across the Complete Plant, Integrating, communicating and optimizing production operations.
Data-Driven Manufacturing: How it comes alive
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Factory of the Future - The “HOW”
ERP
SHOP FLOOR
Involve and empower the Operator by giving them the tools to be part of the solution, instead of simply pointing
out there is a problem
Initiate and sustain a culture of teamwork as it relates to continuous improvement by delegating resources, setting achievable goals, and vetting progress regularly, adjusting
goals upwards over time.
Adopt technology that connects the top floor ERP system to the shop floor asset(s) (equipment and personnel) bi‐
directionally, affording unparalleled visibility and transparency of shop floor processes.
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Factory of the Future - The “WHEN”
With a 10% ‐ 50% Sustainable increase in capacity utilization, which translates into a significant increase in IFO, companies
who adopt the philosophy of the Factory of the Future experience investment returns usually measured in months.
Utilizing a proven solution, and with management setting the course for systemic cultural change, the risk of project
failure is virtually eliminated.
The time is now….. Money is being left on the table (locked / lost in the past) each day that the “Factory of the Future”
remains simply a concept, not reality.
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Production Visibility – On the Factory Floor
Production data captured in real-time, analyzed and sent to management.
Increases machine operator awareness of how down times affect productivity.
Defines how manufacturers can generate more revenue and margin.
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Production Visibility – Gemba Boards and Andon Screens
Common and Objective Data – Right Across the entire Factory
6-10% efficiency gain, on average by simply installing Andon screens throughout
Transparent, Accurate, and timely real-time data delivered to the entire Operational Management team
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Link manufacturing production to ERP, bi-synchronously
Import ERP production schedule into MES Job Queue
Track Job Progress on each machine in real time, pro-active alerts
At Shift / Job end, export actual production results data to ERP
Minimize WIP, eliminate errors, automatic data collection, timely information
Improve scheduling accuracy, keep finished goods inventory accurate, eliminate manual data entry, improve product costing, track raw material usage.
Business System Integration
ERP
MES Software on Server
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Confluence of 3 data streams
AUTOMATED APPROACHMACHINE-CENTRIC
TRADITIONAL APPROACHOPERATOR--CENTRIC
HistorianSQL Database
PROACTIVE ALERTS
Real-time data
MTConnect/OPC/Hardware adapter
DATA PRODUCER
Connect directly tothe machine, automated
data collection in real-timeData collection dependsentirely on operator action
Two-way,Bi-synchronous
Open Database
REACTIVE INFORMATIONGenerating lagging metrics
ERP, MESDashboardDATA Consumer
Machine data Operator data
Business systems
data
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Situational Awareness – Example 1
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Situational Awareness – Example 2
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Situational Awareness – Example 3
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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Situational Awareness – Example 4
Data Streams – The Fuel
Factory of the Future /
Production Visibility
IIoT Situational Awareness
Examples
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REALITY• Disruptive - in a good way.• Transformative – in a good way.• A known and quantifiable payback, with examples and case studies articulating
the exact return received and how it was generated – the “Why”• Practical and proven to be of major benefit in eradicating productivity gaps.• Presently generating an on average 300% Internal return rate of capital in
discrete manufacturing deployments – globally.• Available - Today.
MYTH• A theoretical construct with no practical application(s).• An unquantifiable capital expenditure with a unknown associated
payback.• A highly technical deployment strategy where the technology is
unknown, the path unknown, and both unproven.• A “magic bullet” or a solver of every problem presently facing global
manufacturing
DDM Applied in Manufacturing – Reality vs Myth
IOT / IIoT / I 4.0 –
What’s the fuss?
IT vs OT
Data-DrivenManufacturing -
Benefits
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Order of Why / When / What / How
Why = Business Outcome expected, quantified in REAL Dollars
When = Urgency to act based on perceived / actual ROI, backed up by Facts, not Hype
What ‐ High level project description of an IIoT solution applied to MFG
How = Technical details associated with IIoT solution deployment
Traditional IIOT Project ‐ Discussion Order Preferred IIoT Project ‐ Discussion Order
Relative time spent in each stage
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Critical business challengesRising Business Costs – Reducing Operating Costs
Visibility of shop floor operations and real-time status of production
Productivity and assets utilization maximization
Flexibility of production is and quality (no bad parts)
Performance to standard
Data collection accuracy and Integration of business systems such as ERP
Continuous improvement initiatives, TPM, LEAN, etc.
IOT / IIoT / I 4.0 –
What’s the fuss?
IT vs OT
Data-DrivenManufacturing -
Benefits
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Why OEE matters in the IIOT era
OEE is now the most important metric in manufacturingWorld-class OEE of 85% is entirely achievable with the automated approach
IOT / IIoT / I 4.0 –
What’s the fuss?
IT vs OT
Data-DrivenManufacturing -
Benefits
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OEE: The Critical MetricPercentage of scheduled time that the
operation is actually operating.
Speed at which the Work Center runs as a percentage of its designed speed or
ideal cycle time
Good Units produced as a percentage of the Total Units Started.
The gold standard formeasuring manufacturing excellence
IOT / IIoT / I 4.0 –
What’s the fuss?
IT vs OT
Data-DrivenManufacturing -
Benefits
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What drives desire for OEE
Replace manual, subjective data collection with automatic, objective data collection
True visibility means shining a light on dark production assets
Reveal your hidden factory
The opportunity to take lean manufacturing to the next level
IOT / IIoT / I 4.0 –
What’s the fuss?
IT vs OT
Data-DrivenManufacturing -
Benefits
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Hidden Capacity: Eliminating The 6 Big Losses
0%
20%
40%
60%
80%
100%
120%
Actual DesiredAvailability
MaintenanceSetupDowntimeSmall stopsSpeed lossProductive
The improvement opportunities are always in
one of the following “buckets”
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Value Proposition
10%‐50% Productivity increase
Real-time machine visibility + OEE numbers including alerts
Operator Productivity Increase
Reduce Downtime
Minimize Rejects
Root Cause analysis
Value Stream data collection & analysis
Labor productivity tracking
Usage-based Preventive Maintenance
Benchmark scheduling & value streaming
2 - 5%
1 - 10%
3 - 8%
2 - 4%
2 - 4%
2 - 4%
3 - 6%
1 - 2%
2 - 6%
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Monday, November 2, 2015 Quick Value Equation Calculator
To start, fill in the yellow boxes with data requestedROI Benefits 10 Number of machine to connect to MERLIN MES
5 Number of Hardware connections required
Reduce Downtime 3 Minutes of Downtime per hour saved per machine
Improve Visibility 2 Minutes of Downtime per hour saved per machine through increased Visibility
Increased Production Time/Day/Machine 0.67 Amount of Downtime saved per machine per day in HoursTotal Increased Production Time/Day ‐ All Machines 6.67 Amount of Downtime saved per day ‐ All Machines in Hours
OEE Increase 8% Percent of Overall Equipment Effectiveness gain
Per Machine Return $ Assumptions
Value Reduced Downtime per machine/hour $ 7 $85 Machine cost per hour, fully burdened
Value Reduced Downtime per machine/day $ 57 8 hours per day operational
Value Reduced Downtime per machine/week $ 283 5 days per week
Value/Machine/Year $ 14,167 50 weeks per year
Value/Machine/3 years $ 42,500 Y MERLIN Enterprise Edition
Small Manufacturer – 10 machines – 5 Days / Week, 8 hours / day, Loaded labor cost of $85/hr.
SME Example 1Data-Driven
Manufacturing -Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Example 1 - ResultsSmall Job Shop – 10 machines – 5 Days / Week, 8 hours /
day, Loaded labor cost of $85/hr.
Total time saved
Total time saved
per hour / per machine
per shift / per machine
Production time recovered
per shift –All machines
Total project spend
Totalcost saved
Internal return rate
Payback period
Total Savings
in the first (12) months
over (3) years
Data-Driven Manufacturing
IRR on capital
5minutes
.67hours
6.7hours
$142
thousand
$63
thousand
> 200%< 6
Months
$452
thousand
for the project
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Medium size Manufacturer – 30 machines – 5 Days / Week, 16 hours / day, Loaded labor cost of $85/hr.
Monday, November 2, 2015
Quick Value Equation Calculator
To start, fill in the yellow boxes with data requestedROI Benefits 30 Number of machine to connect to MERLIN MES
15 Number of Hardware connections required
Reduce Downtime 3 Minutes of Downtime per hour saved per machine
Improve Visibility 2 Minutes of Downtime per hour saved per machine through increased Visibility
Increased Production Time/Day/Machine 1.33 Amount of Downtime saved per machine per day in Hours
Total Increased Production Time/Day ‐ All Machines 40.00 Amount of Downtime saved per day ‐ All Machines in Hours
OEE Increase 8% Percent of Overall Equipment Effectiveness gain
Per Machine Return $ Assumptions
Value Reduced Downtime per machine/hour $ 7 $85 Machine cost per hour, fully burdened
Value Reduced Downtime per machine/day $ 113 16 hours per day operational
Value Reduced Downtime per machine/week $ 567 5 days per week
Value/Machine/Year $ 28,333 50 weeks per year
Value/Machine/3 years $ 85,000 Y MERLIN Enterprise Edition
SME Example 2Data-Driven
Manufacturing -Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Example 2 - ResultsMedium JS – 30 machines – 5 Days / Week, 16 hours / day,
Loaded labor cost of $85/hr.
Total time saved
Total time saved
per hour / per machine
per shift / per machine
Production time recovered
per shift –All machines
Total project spend
Totalcost saved
Internal return rate
Payback period
Total Savings
in the first (12) months
over (3) years
Data-Driven Manufacturing
IRR on capital
5minutes
1.33hours
40hours
$850
thousand
$149
thousand
> 400%< 3
Months
$2,550
thousand
for the project
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Impactful Continuous Improvement
Connect to any machine, old and new
Monitor and assess manufacturing productivity in real-time
Analyze causes for Downtime and Rejects then eliminate them
Identify Bottlenecks and Constraints
Discover the hidden factory and manage operations proactively
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Customer Success’ with IIoT / DDM
company realized a 25% savings on whole plantPrecision machining
company realized 11% efficiency improvements in first 3 monthsAerospace
24% to 62% OEE on machinesLarge equipment
manufacturer
from 25% to 60% OEESpecialty Machining
group
company saw a 25% overall improvementEnterprise aerospace
went from 410 parts/week to 690, a 68% gainFine tuning setup
process
25% improvement, no overtime more production Furniture
manufacturer
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Benefits of Data-Driven Manufacturing
35
•Production increase in 4 months from
•52% of the time to 63%
OEE across 30 machines went from
40% to 82%Palletech system has seen 140% gain in
efficiency
Legacy Mazak lasers: 40% gain
20% increase in efficiency just by having everyone aware of what is
happening
42% boost in machine utilization in the first six months
100 hours of reduced operator
overtime per month
11% increase in capacity utilization in the first 3 months
12.5% improvement in
capacity utilization from a $1B agricultural
manufacturer
Cost savings associated with
employing a data collection person
Improved OEE 100% on one
bottleneck machine in one week given the
data
Eliminate machine
downtime caused by Shift changes happening early
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Real Improvements – Post Implementation
QA & Setup
decreased by 72%
Run Time increased by 45%
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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Real Results - Post Implementation
Over 90% Improvement
in OEE
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
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SummaryIIOT is being applied successfully in manufacturing today – why wait?
Can generate a 300% IRR on average, which equates to a (4) month payback.
The path is known, proven, and available today.
The benefits are extremely compelling, hard to overlook.
The “Why” should ALWAYS BE the first discussion point.Cost effective, proven solutions exist which drastically reduces the risks
The last meter problem has been solved…...so get connected.
Data can be cost effectively collected from ALL MFG equipment and processes.
Metrics require data to function, real-time data is the most accurate.
There is a direct link to increased productivity and increased profitability.
Internet Security applied to the factory should be part of the discussion.
Data-DrivenManufacturing -
Roadblocks
ROI with REAL
Numbers
Additional Transformational
Benefits
Thank-you, Questions?
MemexOEE.com866-573-3895 ext. 101 (Toll Free)[email protected] you want a copy of the presentation, please send me an email