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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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Factory of the Future and the value of Production Visability

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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





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.





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.





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.





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





Examples

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Data Streams Required to Fuel an IIoT Implementation in Manufacturing?

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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





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





Examples

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Situational Awareness in the IIoT era –What does it look like?

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Situational Awareness – Example 1





Examples

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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


Roadblocks

ROI with REAL

Numbers

Additional Transformational

Benefits

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Areas to Explore for BenefitsOverall Equipment Effectiveness (OEE)

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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.


What’s the fuss?

IT vs OT


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


What’s the fuss?

IT vs OT


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


What’s the fuss?

IT vs OT


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


What’s the fuss?

IT vs OT


Benefits

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Specific Examples of ROI – With REALNumbers……

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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”


Roadblocks

ROI with REAL

Numbers


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%


Roadblocks

ROI with REAL

Numbers


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


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


Roadblocks

ROI with REAL

Numbers


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


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


Roadblocks

ROI with REAL

Numbers


Benefits

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Additional Transformational Benefits of Leveraging Data-Driven Manufacturing in the IIoT era

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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


Roadblocks

ROI with REAL

Numbers


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


Roadblocks

ROI with REAL

Numbers


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


Roadblocks

ROI with REAL

Numbers


Benefits

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Real Improvements – Post Implementation

QA & Setup

decreased by 72%

Run Time increased by 45%


Roadblocks

ROI with REAL

Numbers


Benefits

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Real Results - Post Implementation

Over 90% Improvement

in OEE


Roadblocks

ROI with REAL

Numbers


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.


Roadblocks

ROI with REAL

Numbers


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

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