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Welcome to Industree 4.0 for November 2020, exclusively sponsored by SAP. We lead off with a great article from Alfred Becker of SAP. That is followed by regular columnists Pat Dixon and Jim Thompson. We'll wrap with other perspectives from around the industry. |
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By Alfred Becker, SAP SE, Global Lead for Paper and Packaging.
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Sustainable Supply Chains
Part 2--What is a Sustainable Supply Chain?
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How does a sustainable supply chain work?
Sustainable supply chains work by collaborating.
A surprising number of the world’s largest companies use the same raw materials and low-tier suppliers. Global pressure to improve sustainability and transparency has seen improvements. However, compliance with green and ethical operational standards has traditionally been difficult to enforce in many parts of the world. If supply chain managers are to combat this, they can best do so by working together, sharing information, and sending a message that sustainability compliance is essential to doing business. The Fashion Revolution movement began in 2013 and is a great example of many major – and highly competitive – fashion brands, choosing to work together to combat unethical suppliers in their industry.
Sustainable supply chains work by leveraging the best available technologies.
Supply chain sustainability presents a challenge due to the complexity and wide distribution of the many links in the chain. Without modern digital technologies, it’s simply not possible to maintain and coordinate the level of accountability and real-time visibility necessary to achieve ambitious sustainability goals. And the great thing about digital transformation in supply chains is that it doesn’t have to happen all at once to be effective. Incremental steps can be taken to gradually digitize supply chain operations. Furthermore, smart factory and digital supply chain solutions gather and analyze data by their very nature. So from the moment of integration, connected technologies begin to calculate their own ROI.
Sustainable supply chains work by setting consistent standards.
In order for a strategic supply chain sustainability plan to work, it’s important that benchmarks, targets, and guidelines are clearly spelled out. They must then be shared – and agreed to – among all the stakeholders and suppliers across the chain. Fortunately, today we have numerous bodies that help businesses set these goals and criteria, and digital technologies make it easier than ever to track and manage compliance.
Top three benefits of a sustainable supply chain
For companies that invest in more sustainable and transparent supply chains, there are potential benefits across the entire business, including:
1. Cost control
Between 2019 and 2020, over 6,000 senior supply chain executives were surveyed by PWC. Based upon their level of investment and implementation of digital supply chain technologies, they were ranked from Digital Novices to Digital Champions. The Digital Champions reported an almost 7% drop in supply chain operations costs as a direct result of digital transformation. And a full 50% of the Digital Champions indicated that investment in supply chain sustainability and transparency would be a higher priority than ever.
2. Building brand loyalty and reputation
Statistics recently published in Forbes magazine showed consumers to be up to 88% percent more likely to be loyal to companies that demonstrate strong social and environmental responsibility. Consumer awareness and preference for sustainable businesses had been steadily increasing even before the pandemic. But now, public demand for transparent supply chain and business practices is at an all-time high. This sentiment is echoed in a 2020 article in Fortune magazine, which states that “Companies are under an intense microscope during the COVID-19 crisis. […] A company’s social footprint is taking center stage in an unprecedented way.” More than ever, a reputation for sustainable and transparent supply chain practices can give businesses a competitive edge during difficult times.
3. Minimizing risk and vulnerability
It seems that every few years, we hear a story about how a tainted or dangerous product slipped through the cracks and made it into the supply chain. Quite apart from the devastating consequence of anyone getting hurt, a product recall has the potential to damage a company – sometimes beyond repair. Often what isn’t lost in costs and legal fees is taken away via reputational damage. When supply chain transparency is enforced and implemented with digital security solutions, unscrupulous suppliers and manufacturers have nowhere to hide. Not only can these measures protect businesses from unethical and environmentally irresponsible partners, they can track and document all the labor, handling, and materials components from source to destination.
Technology components of a sustainable supply chain
Digital transformation in the supply chain allows companies to meet and exceed sustainability benchmarks while also innovating and growing their businesses.
Artificial intelligence. AI technologies allow for the curation and analysis of multiple, disparate data sets across the supply chain. A particularly powerful benefit that AI brings to the sustainable supply chain is the capacity for synchromodality and collaborative shipping. This means tracking the status and location of packages to take real-time advantage of opportunities to combine shipments or utilize less resource-heavy logistics if time permits.
Machine learning. As an application of AI, machine learning uses Big Data to help systems and connected devices adapt in real time – to discover patterns, learn from experience, and automate agile and responsive workflows. For supply chain managers, the operational optimization measures that come out of this process can significantly reduce waste and energy usage.
Robots and automated things. Online shopping has risen by over 149% since the start of 2020. With many customers expecting fast or next-day delivery, we are pushing the existing capacity of warehousing and last-mile logistics provision to its breaking point. Electronic drones and inventory management robots are examples of automated things that can be optimized with intelligent automation to improve workflow efficiency, optimize energy, and save on fossil fuel usage in the logistics network.
Additive manufacturing. Also known as 3D printing, additive manufacturing allows companies to maintain virtual inventories and to manufacture stock on demand. The ability to manufacture on-site and on-demand eliminates fossil fuel usage and other resources used in overseas shipping and packing. It also has the potential to use recycled plastics from within the supply chain loop as the base material for 3D manufacturing.
Industrial Internet of Things (IIoT). When connected devices and machines within a business are fitted with unique identifiers and the ability to send and receive digital data, they become part of an IIoT network. Asset intelligence in a sustainable supply chain can help to optimize machine performance and automate maintenance to reduce energy usage and eliminate redundancies in workflows.
Blockchain. In sustainable supply chains, blockchain is particularly useful in its ability to act as a single source of truth. Through the use of sensors, products and materials can be accurately tracked back to their source to remove any speculation as to their provenance, quality, and handling – at any stage across the supply chain.
Sensors. RFID devices and other small, inexpensive sensors can easily be fitted to products and raw materials – at their source or anywhere along the supply chain. When partners and suppliers comply with mandatory sensor attachment, an unprecedented level of transparency is achieved – especially in regions that may have previously been somewhat hard to reliably monitor.
Modern databases and ERP. The best sustainability solutions run on in-memory databases and ERP systems that can manage Big Data and diverse, complex processes. The technologies and automated components of a sustainable supply chain are dependent upon predictive and advanced analytics as well as on the real-time insights made possible by these modern, centralized business systems.
Sustainable supply chains in action
By combining innovation, creativity, and modern supply chain technologies, these companies have developed sustainable solutions to keep their supply chains green, transparent, and more competitive than ever.
· TemperPack is meeting both customer satisfaction and sustainability goals by streamlining their supply chain and business operations.
· California Steel applied digital technology for increase automation, greater accuracy, and enhanced transportation visibility.
· ArcelorMittal used increased planning process transparency across sales, supply, manufacturing, and distribution.
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By Pat Dixon, PE, PMP
President of
www.DPAS-INC.com, offering project management and engineering for industrial automation projects.
co-authored this month by Jack Bray, former VP of Operations for Domtar
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Imagine you are an account manager. You visit a printer and get an order for 500 tons of magazine grade that is due in 2 months with a basis weight of 34 lb./3000 ft2, glossy finish, and high tensile strength. This grade is called “LSS” (Light Shiny Strong). The printer creates a PDF file of a purchase order for 500 tons of LSS and emails it to your sales department. In a couple of days someone in the sales department gets to this email and manually enters the order in an Enterprise Resource Planning system (ERP). A week later the corporate supply chain director has the weekly meeting and looks over all orders in ERP to determine how all the orders will be delivered. There are 5 mills that can make LSS. It is decided that since mill #4 already has a production run of LSS scheduled and does not have any time critical orders afterward that this order can be added to that run to avoid an unnecessary grade change and meet the delivery date. The supply chain group sends an email to the mill #4 manager with all the new orders. The mill manager tells the production supervisor (or order execution group) to enter the new LSS order in the Manufacturing Execution System (MES) as an extension of the existing LSS run. The following week the paper machine superintendent looks in the MES and sees that the next schedule grade is LSS and tells the lead operator to start making LSS after the next reel is turned up. After turnup the operator uses an automated grade change in the DCS that quickly gets the basis weight to 34 and produces LSS that meets all specifications. After the prior order is completed the machine continues to make 200 more tons for your order for the printer. Then the fan pump fails and the DCS automatically sends alarms and shuts down the machine. When the problem is identified, replacement parts are ordered while the mill manager looks at the due date in the MES system and calls the supply chain director to express concern regarding meeting schedule. The supply chain director calls the mill managers at the other 4 mills and decides that trying to upset their production schedules will cause too many other problems and headaches, so the COO tells #4 mill manager to hurry up. When the fan pump is fixed the machine starts up, but production efficiency is low because of an epidemic of sheet breaks. You get a very unwelcome call from the printer on the due date saying they have not received the 500 tons of LSS, and don’t expect any future orders.
What I have just described is Industry 3.0. The ability to automatically change grades and shutdown did not exist in Industry 2.0. This was enabled by the application of computer technology to provide a platform for interlocks, alarms, advanced controls, and many other features that made industry safer and more efficient.
What I also described are obvious inefficiencies that inflated costs and resulted in lost future revenue. I described an open loop ERP.
The closed loop ERP is the end of the rainbow for Industry 4.0. The promise of Industry 4.0 is the enterprise that is fully connected from the plant floor to the top of the enterprise with real time data used for automated processes. We are a very long way away from this and without careful engineering it can be dangerous, but if your competitors leave you in their dust you may be unable to compete and out of business.
I will now retell the story with the Industry 4.0 closed loop ERP.
You visit a printer and get an order for 500 tons of LSS that is due in 2 months. You provide the credentials for the client to submit a purchase order in your ERP from a webpage. The ERP is connected to the MES systems at all 5 mills and automatically schedules an extension of the LSS production run at mill #4. When the prior grade completes the MES automatically initiates the grade change. The fan pump will not fail because it has been continually monitored with machine learning, so predictive maintenance was performed a month ago. However, a major snowstorm is expected to hit in 2 days so if you wait to ship the order when it is complete it will be late. ERP tells mill #4 MES to suspend production and looks at the other 5 mills. Mill #2 is equidistant from the client but will not get hit with the storm, and has a very high operational efficiency with non-time-critical production schedule so it can interrupt the schedule to make LSS on time. ERP schedules mill #4 MES to ship 200 tons of LSS to your client, end the production run of LSS at mill #4, and schedules a high priority LSS run of 300 tons in the mill #2 MES. Your client gets both shipments ahead of schedule and tells you they are ready to place their next order.
Do you want closed loop ERP?
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Industry 4.0...where to start? |
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As I think about the question, "Where to start with Industry 4.0?" I am taken back to thoughts about housekeeping. After all, if one looks back at the patchwork interconnectivity systems that have been in place over the last fifty years or so, there are pieces that are digital, pieces that are pencil and paper and pieces in between. Pat Dixon was describing one such scenario in his column above.
Another way to look at this is review the construction of the US interstate highway system, a project that twenty-five years, from 1957 to 1982. In this case, the heaviest traveled routes were provided with interstates first, with lesser traveled routes waiting until the end. The last piece I remember of the original 44,000 miles was I-40 from Raleigh to Wilmington, North Carolina. Along the way, some of the more difficult construction pieces were delayed, too.
I think I like the housekeeping model better, however. If one is placed in charge of a mill that is a housekeeping nightmare, the place to start is your own office. When you have your office up to the highest standards, you have the right to ask your subordinates to achieve the same level and so on and so forth down the line.
So, start at your office with Industry 4.0. Get the connectivity, sensors, dashboards and other items correct here first. Then move out through the rest of the facility in an organized fashion. Put live digital connections where real paper forms, pdfs and faxes used to be. Add upstream and downstream data travel. Adjust the dashboards to match the management and operational requirements. Do this internally first and then externally. As the executive in charge of the facility, keep your finger on the pulse all the time.
Going at it any other way will result in stalls and false starts. Additionally your personnel will resent that you are not having the learning issues they are. Yes, top down is the best way.
But for another view, see Keenan's article below.
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IoT Spending Is a Mixed Picture in 2020 |
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By Brian Buntz
IoT World Today
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One silver lining to the COVID-19 crisis is IoT vendors’ willingness to give discounts or provide more features at the same price. Fifty-nine percent of respondents reported receiving such perks. Additionally, most IoT implementers are upbeat about the prospects of budgets dedicated to IoT technology in 2020 and 2021. Some 41% expect budgets to increase this year, while 51% anticipate they will next year. Only 14% and 8% believe IoT budgets will decline in 2020 and 2021, respectively. |
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The IIoT Pilot Purgatory Conundrum & How to Beat It |
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By Martin Keenan
Technical Director at
Avnet Abacus
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The ability to escape pilot purgatory relies on the first decisions influencing the pilot - from picking the most complementary use case through to aligning internal resources to favour the outcome rather than create dispute, as well as choosing the most suitable technology to deliver a positive outcome. Collaboration and partnership is the key to IIoT success, both internally and externally. |
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How Digital Twins Accelerate the Growth of IoT |
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By Ashwini Dave
IoT for all
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We introduced the idea of digital twins last month. This is a continuation of the subject. Ed.
A Digital Twin is a virtual replica of a physical device. They are used by IoT developers, researchers, and scientists for running simulations without having a physical device. In a way, digital twins can be given credit for the mushrooming growth of IoT.
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How to optimize Plant Process Management systems and the people within them |
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Andreas Eschbach
eschbach
North America
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Plant Process Management (PPM) systems help manage, monitor and optimize plants in addition to work activities, operations and production assets. They give a real-time view of work progress and track status of any incidents or outliers to routine operations. Current employees working in shift manufacturing need to be made aware of any issues that may have occurred in the previous shift, which isn’t always easy. Poor communication can directly impact safety, quality and productivity. |
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Industree 4.0 is exclusively sponsored by SAP |
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