Why are agile factories needed?
The fast-moving world we are now living in is characterized by international connected services, the flow of goods and fast-changing market environments. Even small changes can have a big impact on economic structures. This VUCA-world (Volatility, Uncertainty, Complexity, Ambiguity) seems hostile for those not being able to keep up with the pace of ongoing technological progress (e.g. Kodak, Nokia, Opel). Especially the evolution in microelectronics and the use of platform-based services enabled companies to disrupt industries with innovative business models (e.g. Airbnb vs. the hotel industry, Uber vs. taxi services, Netflix vs. Hollywood).
In manufacturing this development manifests in a trend towards smaller batch sizes, customer individual products, shorter product lifecycles, and on-demand manufacturing. To adapt to these changes manufacturing companies radically need to increase flexibility. This enables a production which reacts to fluctuations in capacity, product variations, and timelines. The problem: using lean methods can only increase flexibility to a certain point which is not enough to cope with the demand for flexibility. By leveraging digital technologies this gap can be filled while transforming the shop floor into an agile factory that is also able to handle fast-changing situations as we are facing now the corona-pandemic.
What is agility?
Agility is the ability to move or think quickly in an intelligent way. Being heavily used in software development and project management, agile methods (such as scrum), describe the ability to quickly respond to customer demands using iterative sprint planning and self-organized teams. By transferring these methods to manufacturing agile factories were born.
What characterizes the agile factory?
Reacting fast to customers' changing needs, delivering individual products, within the right time frame at competitive prices will be key to remain competitive in the new normal. To do so, companies need to stay close to their customers, constantly adapt production processes to their needs, and be able to deliver the desired customized variants upon short notice. It is therefore crucial to implement the following agile characteristics.
1. Fully connected manufacturing & digitized processes
Whether producing individual products using just in sequence delivery or high volume production running 24/7, connecting machines and employees to the digital hub are the basic procedures to analyze production in real-time. Through seamless information flows context-sensitive data is available where and when it is needed. Building upon that, optimizations can be derived in a standardized way, using modern technologies as AI to predict operations and maintenance activities.
2. Dynamic production planning and control
Conventional production systems follow a static planning and control scheme where optimizations in queuing and scheduling are conducted manually and are often executed based on paper instructions or word of mouth. In contrast, an agile factory is able to dynamically balance shop floor activity levels based on rules and algorithms. By splitting production into smaller subsegments local optimizations are iteratively conducted. Information is distributed to cross-functions and other subsegments in real-time.
3. Data analytics & predictive operations based on real-time data
Management is able to extract operational performance KPIs based on real-time data using data analytics and visualizations to allow transparent, fact-based decision-making process. Availability of closed loop information between machine and workforce data furthermore enhances planning by predicting operations before they actually occur to smoothen shop floor and activities and balance capacities with historical data and machine learning.
4. Employee empowerment
Skill development and distribution
To enable dynamic load balancing tasks need to be distributed to employees with a feasible skillset. Skills are therefore managed and constantly improved to guarantee sufficient skill availability on the shopfloor. Teams are enabled to work autonomously with high agility to instantly react to internal and external changes.
Active change management initiatives
Active communication towards all stakeholders before, during and after implementation of agile concepts puts the human workforce at the center of agile manufacturing. While executives act as digital transformation managers with shopfloor employees being closely involved implementation barriers can be detected in an early stage and addressed sufficiently.
5. Supply Chain Integration
Vertically connected supply chains are needed to inform customers and suppliers about changes in demand. Using digital interfaces foster constant improvement and WIP reduction through faster reaction and allows cost reduction on all supply chain layers.
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