Cover Story Operations 4.0
Impact of 3D Printing on Operations and Supply Chain
____ Automation and Unemployment: A Trade-Off of Sorts
Opsession September Issue Introducing Volume 4, 3rd Issue of Opsession, the X-Ops Monthly Newsletter. This Periodical aims to bring some of the key happenings in focus and spark discussions around them.
Operational Supply Chain Management
Recent happenings in Operations Management
Xavier Institute of Management, Bhubaneswar
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Operations 4.0: Fueling the next 20 percent productivity rise with digital analytics
The business in today’s world is subjected to the most significant disruption in decades and this disruption has been brought by the technological advancements like big data and advanced analytics, additive manufacturing, the Internet of things, robotics and artificial intelligence. Together, all of these changes are bringing the 4th industrial revolution. The
consequences of these technologies are evident in all the sectors – the competition is intensifying not just within industries but also between them. In the year 1987, a Nobel Prize winning economist famously quoted that, “You can see the computer age everywhere but in the productivity statistics.” It is not possible in today’s world for the business to wait another 30 years for a significant increase in productivity. They need gains in the order of 20 percent or more, and they need them much
sooner. But a core problem remains with the business i.e. they often try to overinvest in technologies and on the same time they underinvest in the human capital needed to make the technology work. Basically there are four primary structures those are observed to become operations 4.0 • Product driven: The market leaders who try to design and launch products with greater efficiency, combines advanced analytics with that to design to value creating analytics to value or AtV.
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• Journey driven: The lean management has already made a greater impact for many organizations in their end to end perspective to their customer journeys. The technologies like digital technology and agile processes helps to make those impact more faster and makes it more sustainable, that too on a larger scale creating a far greater impact than ever . before. These technologies together form EdgE, or end to end digital enablement. • Cost and budget driven: A more sophisticate cast control tool requires too much data and coordination. Now, due to the technologies, we have zero based budgeting, or ZBB which is more feasible, flexible and more profitable than ever. • Manufacturing driven: The technologies like the digital manufacturing and additive manufacturing are bringing about a plethora of changes in the manufacturing sectors. It
now can connect novel and existing data sources with smarter machines and new process technologies. Product driven: From cost to design to analytics to value The three major changes that are affecting this area are 1. Complexity management 2. Analytics and automation 3. Powerful portfolio analysis Journey driven: Minimizing the middle The techniques like six sigma are helping the organization to cut out the waste and produce only those products that helps to add value to the organization. These depends on three important factors 1. Understanding the complete journey 2. Speeding the journey with digital 3. Building agility for the future. Cost and budget driven: Zero as hero The cost reduction techniques
have improved manifold by the introduction of zero based budgeting and it has already saved many conglomerate’s billions of dollars. Apart from this it also helps catalyzing the efficiency of the firm. In today’s world the organization through cost and budget cuts tries to 1. Make better trade offs 2. Sustain a new culture All the technologies be it lean manufacturing, additive manufacturing or Internet of things has made the manufacturing more efficient by reducing the waste and by products produced during the
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manufacturing of products. It solely depends on three important factors 1. Finding opportunity fast 2. Upgrading the supply chain 3. Changing people first. Combing people, digital technologies and advanced
analytics can result in a new breakthrough in productivity if companies learn to integrate all the technologies together. Not only can that it result in changing the people’s mindset and at the same time helps to create new opportunities and
markets. With the right support, operations 4.0 can become a too powerful a tool for the innovators and leaders to let it pass by. Manufacturing driven: More value with less waste
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Impact of 3D Printing on Operations and Supply Chain
Additive Manufacturing refers to a process by which digital 3D design data is used to build up a component in layers by depositing material. The term "3D printing" is increasingly used as a synonym for Additive Manufacturing. However, the latter is more accurate in that it describes a professional production technique which is clearly distinguished from conventional methods of material removal. Instead of milling a work piece from solid block, for example, Additive Manufacturing builds up components layer by layer using materials which are available in fine powder form. A
range of different metals, plastics and composite materials may be used. Additive Manufacturing is now being used increasingly in Series Production. It gives Original Equipment Manufacturers (OEMs) in the most varied sectors of industry the opportunity to create a distinctive profile for themselves based on new customer benefits, cost-saving potential and the ability to meet sustainability goals. The answers will be very Operations strategy different with additive encompasses all the questions of manufacturing. Greater how a company will buy, make, operational efficiency is always move, and sell goods.
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a goal, but it can be achieved in many ways. Today most companies contemplating the use of the technology do piecemeal financial analysis of targeted opportunities to swap in 3-D equipment and designs where those can reduce direct costs. Much bigger gains will come when they broaden their analyses to consider the total cost of manufacturing and overhead. Today, consumers are making their purchase decisions based on how quickly they will receive the product. In order to stay competitive in the
marketplace, companies are turning to 3D printing to create and deliver their products quicker and 3D printing is innovating with that model and putting consumers in the driver’s seat. For OEMs, supply chain managers can reduce their inventories to virtually zero while still maintaining the desired stock virtually. No out of stock will keep customers happy and improve customer loyalty. It is not all bad news for 3PL companies either. While they are projected to lose revenue on the freight business this can be an opportunity to transform their service offerings and forge partnerships with OEM to provide integrated manufacturing and supply chain services. A shorter traveling distance for products or parts not only saves money; it saves time. If you’ve ever been forced to leave your vehicle at a repair shop while the mechanic waits for a part, you’ll appreciate that. BMW
and Honda, among other automakers, are moving toward the additive manufacturing of many industrial tools and enduse car parts in their factories and dealerships—especially as new metal, composite plastic, and carbon-fibre materials become available for use in 3D printers.
It is essential for all the companies especially for the OEMs to renovate themselves and transform the supply chain in relevance to the digital manufacturing technology which is dominating the current world. It is high time that Industrie 4.0 become part of the operations and supply chain.
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Automation and Unemployment: A Trade-Off of Sorts
The rise of automation brings with it a rise in efficiency, precision and quality but there is no escaping the fact that the more work machines do for us, the less work there is for us to do. So exactly how real is this threat? And would all of us be affected by it to the same extent? To say that automation means shedding of jobs would not be entirely correct. According to statistical evidence in US,
where automation ‘hit hardest’, this is supported by where automation ‘hit hardest’. This is supported by the decline in manufacturing employment since then, but other factors such as globalization also need to be factored in. Prior to the 1950s, employment grew in many manufacturing industries despite strong productivity growth. There is also no escaping the fact that more robots and artificial intelligence means more jobs in science,
technology, engineering and math, known as Stem group. Apart from profession based segmentation, there is also a gender based perspective to the whole scenario. Since men are much more likely to work in manual labour jobs, their jobs are more likely to be replaced by machines. Rise of automation has made way for requirement of much more sophisticated skills, such as memory and reading, proven to be beneficial for women, and have replaced physical tasks done mainly by men.
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US, Germany and Japan worked in jobs at a high risk of automation. However, James Bessen is of a conflicting view here arguing in his recent paper how automation often boosts the very industry it most strongly impacts. Even though The World Economic Forum’s 2016 Future of Jobs report indicated men and women would share the burden of jobs losses fairly equally, others, including PricewaterhouseCooper (PwC) in 2017 suggested a higher percentage of men in the UK,
.
A critical factor here is demand. For example, in a labour intensive industry such as textile is, production costs are higher and a particular variety of yarn would have been unaffordable to many. However with the advent of automation, production costs
declined, raising demand and hence subsequently employment. In fact, as things get more consumer-friendly, new demand is often created in places where earlier there was none. In a way, jobs aren’t really lost, but just shifted from one sector to another, eliminated in one field but sprouting up in another. Thus, if relevant skills are acquired and skill development encouraged to equip the people to cater to these new demands, automation can easily be dealt with, because like it or not, it is here to stay.
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Operational Supply Chain Management
Introduction Operational supply chain decisions are made hundreds of times each day in a company. These are the decisions that are made at business locations that affect how products are developed, sold, moved, and manufactured. Operational decisions are made with an awareness of the
strategic and tactical decisions that have been adopted in a company. These higher level decisions are made to create a framework within the company’s supply chain operation and to the best competitive advantage. The day to day operational supply chain decisions ensure that the products efficiently
move along the supply chain, achieving the maximum cost benefit. A number of examples of operational decisions can be identified in manufacturing, supplier relationships, and logistics. Manufacturing Companies make tactical decisions with regards to manufacturing, such as the
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adoption of kanban and just-intime. However, if the local manufacturing site is unable to rely on certain supplier’s delivery times, the just-in-time method may not be suitable for some product lines. The local plant management may make an operational decision to keep certain items in stock to ensure that production is not halted. This inventory will increase costs, but a greater cost would be incurred if the production line was brought to a standstill due to a lack of items from a supplier. Suppliers Global suppliers and negotiated contracts are decisions made at a company level to take advantage of the company’s global buying power. This offers considerable cost savings, but local sites may have to make operational decisions with suppliers to ensure an efficient supply chain. In some instances, local negotiations with global suppliers are required to ensure
the quality of the product. For example, in some countries, the quality of the product produced by a supplier is not at the same level as other countries. The local management would have to make an operational decision to negotiate with the supplier for them to create a product with a higher quality to ensure the quality of the finished product. Logistics Strategic and tactical supply chain decisions in the logistics process often focus on the use of third-party logistics companies (3PL). Many companies have identified the cost benefits of these 3PL companies and have integrated them into their supply chain. However, in some instances, these 3PL companies may not operate in all regions where the company requires logistics. In those cases, the local management has to make
operational decisions on leasing local warehousing and negotiating with regional logistics companies. Although strategic and tactical supply chain decisions are made to bring the greatest efficiencies at the lowest cost, the daily operations of the supply chain require that local management makes hundreds of operational decisions. These operational decisions are made within the framework created by the strategic and tactical processes and not made in isolation. An optimized supply chain is one that allows the organization to ship what the customer wants to its customers when the organization's customers want their orders shipped. And to accomplish this by spending as little money as possible - in cost of goods, in inventory costs, in logistics and manufacturing costs
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Recent Reforms in Operation Management Abstract Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. So it is the most required technology now-a-days. Recently there were many changes happened in the field of operations to make our world more enable. In this article we will discuss about five of the important inventions and how they are going to benefit our livelihoods.
Human and Machine: Automation in manufacturing
68 percent of automatable work in developing world is going to happen in China and India. Technical feasibility is a necessary condition for automation. Apart from it Cost of developing, cost of labor and benefits are different criteria to consider automation. Achieving long term goal and best in class product is also the necessities for automation.
We need to consider the following three fundamental perspectives: what automation is making possible with current technology and is likely to make possible as the technology continues to evolve; what factors besides technical feasibility to consider when making decisions about automation; and how to begin thinking about where—and how much—to automate in order to best capture value from automation over the long term. According to the survey about 87 percent of hours spent in manufacturing are automatable.
Wherever a given company is on the maturity spectrum, it is essential to keep the focus on value creation. Manufacturing leadership Few manufacturing organizations undertake a transformation with the goal of changing their own culture. Their focus is on the transformation itself: an intense, organization-wide program to boost both performance and organizational health.
Three fundamental behavior shifts are essential for a leader. They are providing right answers to asking right questions, looking for immediate fixes to digging for root causes, setting general goals for everyone to connecting the organization’s goals. Many organizations use external or internal go-and-sees to help leaders see the potential of a transformed organization and how it differs from their
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engines (ICEs). And now, in a high-tech second act, both incumbent and nontraditional makers of commercial vehicles across most weight categories and a variety of segments are launching new “e-Trucks.”
current environment. However, these visits often focus only on the behavioral shifts. Once leaders have made the initial steps toward leading in a new way, organizations must put the infrastructure in place to continually reinforce this behavior. The idea is to create transparency into whether leaders are spending their time in a way that is aligned with desired principles and behaviors. Electric Vehicle adoption in truck industry Fleet managers prized these trucks for their strong pulling power and greater reliability than vehicles powered by early, fitful internal combustion
The time for e-Truck is ripe and that three drivers will support the market to grow by 2030. First is based on total cost of leadership (TCO). Second on robust electric vehicle technology (EV) and third is enabled by the regulatory environment, including country level emission regulation and local access policies. Some key factors for success in e-Truck ecosystem are – • Design to specific uses • Innovate the business world around e-Trucks • Capture supply chain synergies • Educate, train and enable the dealer network and the customer • Develop new selling and service competencies
Maximizing Reservoir production From survey it is shown that an analytical approach to production could improve the global average underground recovery factor by up to 10 percent, equivalent to unlocking an additional 1 trillion barrel of oil equivalents (boe). Companies that systematically pursue
productivity improvements in their reservoirs—in existing wells, new wells, and throughout their operations— can achieve meaningful gains. This process is not about implementing new technical levers to increase production, but through systematic improvements in operating practices and implementation of lean operation principles. Some opportunities in this field are – • Wells are structurally reviewed once per quarter per year rather than once per week per month • Targeting 10 percent of wells for production enhancing intervention. Some key approach improvisation-
for
➢ Identify the gap between current production levels and what is achievable. ➢ Examining the sub surface geology and production history ➢ Determining which performance improvements
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IOT in future production systems Strong production systems have other powerful benefits too. Allowing direct comparisons among plants, for example and encouraging internal competition. l ever to pull ➢ Pinpointing ways to close the gap between production levels and reservoir potential
.
IOT is going to change the communication, analysis and decision making skills of an organization but not the fundamental purpose of production systems. It will
offer improvements in four main dimensionsConnectivity, Speed, Accessibility and Anchoring. For example- The oil-and-gas industry, for instance, is rolling out industrial-automation systems that can monitor the health of expensive capital assets in remote locations. These systems facilitate timely preventative maintenance by using sensor data to generate real-time performance information.
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Editorial Board: EDITOR: CO EDITOR COORDINATOR:
Opsession Monthly
XIM, Bhubaneswar
SAMAR NANDA GIRIJA TRIPATHY PRAVEEN DASH
TEAM:
CHANDNI ROUT MAHESWAR PRESINGU PRAKAMYA SHARMA SUBHANSU BHATT
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KUMAR ADITYA