Manufacturing is no longer what it used to be. The technology around us has advanced by leaps and bounds. The manufacturing industry has also adapted to these changes over the years. But, it was often limited to their manufacturing plant and rarely did go beyond it. Over the years, technology has taken over every spectrum you can think of. Most manufacturers settle for using advanced technology to automate their in-house processes.
Initially, the automation in manufacturing industries involved heavy labor and a large workforce. Machinery was used to do the job in a matter of hours that would have otherwise taken days or even weeks. You could say that technology was a huge factor that helped to pave the path to the first industrial revolution.
The first industrial revolution was in the 1700s. Over the years, the manufacturing industry saw even more changes. The changes lead to the second and third industrial revolutions. Today, in the twenty-first century, everything has gone digital. The manufacturing process itself can not be entirely digital even with today’s advanced technology.
But, when coupled with innovations like Digital Transformation, the Internet of Things (IoT), and smart manufacturing, it is possible to set up your manufacturing business in the digital platform. The cumulative effect is revolutionary. It is now fondly being called the fourth industrial revolution or Industry 4.0.
Thanks to the digitization of the manufacturing industry, we are now in the middle of transforming how we produce or manufacture products. The third industrial revolution became the first stepping stone towards Industry 4.0. It introduced computers and automation into the manufacturing industry. By doing so, industries became smarter, and their systems became autonomous. They were fueled by data reducing human errors with machine learning.
Ideally, Industry 4.0 will be able to make decisions without human involvement. It will use the help of many systems or computers that can communicate with each other. Industry 4.0 is now possible only because of the rise of many innovative and revolutionary developments in the industry. The Internet of Things (IoT), digital transformation, smart factory concepts, and more are some of the most significant of these.
Industry 4.0 is inevitable, and it will replace the legacy systems that are in place now. So, what happens to your manufacturing business when that Industry 4.0 takes over and becomes mainstream? You need to have a system in place that can adapt to this change. There is no better way to prepare your manufacturing business for this change other than eCommerce. An eCommerce site can potentially be the central hub for your business. You can use it to manage your entire business for everything from production to sales.
Internet of Things (IoT)
The Internet of Things or IoT could be any physical device that can be connected to the internet. It could be your smartphone, smart speaker, TV, or anything else for that matter. As long as you can connect a physical device to the internet, it can be a part of IoT. More importantly, IoT devices can connect and communicate with each other. This makes IoT the number one contributor that makes Industry 4.0 possible.
Implementing IoT for your manufacturing business opens up new opportunities for your business. The most prominent among these is the ability to adapt an omnichannel approach. Ultimately the goal is to enhance the B2B manufacturing process. And to do that, it is inevitable that they adopt an omnichannel approach to their business. This is inevitable because, as the technology around us changes, it also changes how we function. This holds true for the manufacturing sector as well.
Industrial Internet of Things (IIoT) focuses on the application of IoT, specifically for the industrial sector. It brings you one step closer to Industry 4.0. IIoT concentrates on machine learning, M2M or machine-to-machine communication, and also big data. IIoT employs much more advanced technology than typical IoT. IIoT combines IT and Operational Technology (OT) brilliantly to bring the best out of the manufacturing process.
Types of Manufacturing
The manufacturing process is not the same for any two unique products. The manufacturing process is broadly classified into five. The manufacturing process under which a product falls depends on the manufactured product. It also depends on how often it is manufactured, the manufacturing process itself, and the product's sales cycle. The five types of manufacturing include the following.
- Repetitive Manufacturing
- Discrete Manufacturing
- Job Shop Manufacturing
- Process Manufacturing (Continuous)
- Process Manufacturing (Batch)
1. Repetitive Manufacturing
As the name suggests, Repetitive Manufacturing involves the repeated production of products. It usually maintains a somewhat consistent production rate. Repetitive Manufacturing or REM consists of dedicated production lines. It is capable of producing identical or near-identical products in large numbers. Examples of REM includes kitchen utensils, automotive parts, and more.
Another characteristic of REM is that the production takes place 24/7 all through the year. Furthermore, it can vary the production speed or rate of production according to customer demand. REM is the typical manufacturing process that many of us are already familiar with. Its flexibility in production speed/production rate makes it the ideal production method. It is suited for both make-to-stock and make-to-order production strategies.
- Reduced cost of production
- Automation capability because of identical or similar products
- Use of machinery, which means lower skill set required and minimal error
- Schedules are easier to maintain due to automation
- Ability to change or alter production speed or rate based on the output required
- Easily track the production process from one location
- Changes, even minute ones made on the production line, could have huge effects on the business
- Can't produce personalized products
- The low skill set required for the job means that there is more chance for monotonous working leading to fatigue
- Risk of predicting the wrong customer demand, leading to either overstocking or under-stocking
- Difficulty in tracking Cost of Goods Sold (COGS)
REM in the Smart Era
Repetitive manufacturing is among the forerunners in the smart manufacturing era. The fact that REM uses automated machines for the production of goods makes it ideal for implementing Industry 4.0. With REM, you are already half-way equipped with the things you need to put Industry 4.0 in motion. By employing IoT on the already automated processes. You can connect the machinery involved in the production process with each other.
Furthermore, by incorporating eCommerce into your Industry 4.0 optimized REM process, you can overcome REM's shortcomings. This includes predicting the customer demand based on analytical data that eCommerce can get you. It enables you to keep an accurate inventory level for the business. Tracking the COGS also becomes a walk in the park with the help of an eCommerce platform. Furthermore, it can serve as the central hub to manage your business.
2. Discrete Manufacturing
Similar to Repetitive Manufacturing, Discrete Manufacturing also uses an assembly line. The discrete manufacturing process is extremely diverse and has varying changeover frequencies. Their setup is subject to variations depending on the similarity of the product. This implies that if the difference in the products manufactured is too vast and the setup may have to be altered and possibly lead to a tear-down. Discrete manufacturing makes use of parts such as nuts and bolts, brackets, wires, etc.
Automobiles, furniture, toys, and smartphones are examples of discrete manufacturing. Discrete manufacturing falls behind flexibility as compared to REM. Any changes made on the assembly line could have devastating effects if not done right. Furthermore, discrete manufacturing often involves assembling multiple parts. Automation can streamline this process. Some of the leading automobile manufacturers have already implemented fully-automated manufacturing plants.
Discrete Manufacturing in the Smart Era
Discrete manufacturing is already a proven model of fully automated manufacturing—corporate giants like BMW or Volkswagen, who are fully capable of manufacturing with automated processes. Small and medium-scale businesses do not have deep pockets or technological know-how to do the same. The day is not far away when even small and medium-scale manufacturers also become ready for Industry 4.0, and the signs are already showing.
RPA or Robotic Process Automation for Discrete Manufacturing
One of the aspects where discrete manufacturing is already ahead of others is digitization. Many, if not most, already employ RPA or Robotic Process Automation. RPA is a software technology that enables you to automate digital tasks. They are capable of learning, mimicking, and executing business processes based on predefined rules. The most widely used application of RPA in discrete manufacturing is in a company's finance department. RPA automates the tedious and time-consuming tasks. This saves businesses valuable time and effort, which can now be diverted to growing the business further.
ERP Systems for Discrete Manufacturing
The ERP or Enterprise Resource Planning systems were originally called Manufacturing Resource Planning. It was only made for discrete manufacturing in the beginning. Today, the ERP system enables companies to view and control the manufacturing process. It reduces wastage and the time required to produce the goods. ERP accomplishes this by managing various aspects of the business.
This includes the inventory, sales order, supply chain, and even CRM. An ERP system is tailor-made for a company that employs discrete manufacturing, unique for its nature or industry. The system is then customized to suit the unique needs of the specific manufacturer. ERP systems for discrete manufacturing are available from some enterprise software vendors. These include SAP, Oracle, Microsoft, Epicor, Infor, Sage, IQMS, IFS, and more.
3. Job Shop Manufacturing
Job shop manufacturing substitutes the production lines with production areas. Job shop manufacturing deals with the production of smaller batches of custom products. Job shop manufacturing can be made-to-order (MTO) or made-to-stock (MTS). The workstations are positioned so that you can make one or even a dozen versions of a product. This is done due to the unique nature of the products produced.
Job shop manufacturing operations may be converted to a discrete manufacturing line. It is done if the customer demand for the product goes up. This can be accomplished by replacing labor operations with automated equipment and processes. This may not apply to all kinds of business/products. Thanks to the latest and cutting-edge tech, many processes that weren't possible using machinery in the past are now possible. Examples of job shops include machine tool shops, machining centers, paint shops, etc.
Job Shop Manufacturing in the Smart Era
Job shop manufacturing was always considered a human-centric manufacturing process due to the custom-made products it produces. It seemed unlikely that a machine would produce something so unique. At least, not without a human operating it. Then came the CNC (Computer numerical control) machines that changed the whole picture. Job shops that relied heavily on skilled craftsmen could now manufacture parts with the help of computers and no skills.
Enhanced Quoting Capability
Quoting is without question one of the most significant aspects of any B2B business. Even the smallest change in a job shop manufacturer's workload can affect the labor cost. This, combined with the varying supplier and raw material costs, makes it hard to develop an effective quoting capability.
With the help of an optimized digital job shop, you can extract accurate information from a job order. This can further help you gain a total understanding of your costs. You need an enterprise-wide system capable of collecting data in real-time. This is carried out for each part, purchase, work center, and process. This can yield the best results only through an eCommerce channel. Use it to place orders from your business and make the digital job shop a reality.
Intelligent Information Transfer
Job shop manufacturers typically use disconnected systems like CAD (Computer-Aided Design) or CAM (Computer Aided Manufacturing) nesting systems. They are used for storing the order information once it is accepted in the front office. The transferring of this information down the lane in the manufacturing process is hard. It involves manually adding much data, such as reference numbers, quantities, materials, and machinery.
With the help of an integrated digital system, you can avoid all the unnecessary steps. Furthermore, it can detect the required parts' geometry or specifications. It can then associate them with the quote data. To put things in perspective, this can save businesses over a month instead of doing the same work via CAD/CAM.
4. Process Manufacturing (Continuous)
Process Manufacturing or continuous Manufacturing is similar to repetitive manufacturing. The most prominent of these similarities is that they both run 24/7. What makes the process (continuous) manufacturing different is that it deals with manufacturing raw materials. Process manufacturing produces raw materials that include gases, liquids, powders, and slurries. Oil refining, chemicals, and synthetic fibers are examples of continuous manufacturing.
Unlike batch manufacturing, there are no different stages of production or areas of production. The entire production is carried out in one location and in one movement without any break. The production is monitored as part of the ongoing evaluation process, and the necessary improvements are made. Continuous manufacturing may also include assembly lines or even sub-assemblies. The ones that use assembly lines are often termed continuous production.
- High dependency on machinery and lower labor cost
- High accuracy due to the use of machinery
- Comparatively easy to organize the process
- Minimal wastage
- Easier inventory management
- May incur a huge loss in case of unprecedented demand falls
- Heavy machinery requires continuous monitoring and maintenance
- Zero customization option for the customers
- Reconfiguration of any type on the process can be expensive
Process (Continuous) Manufacturing in the Smart Era
Process or continuous manufacturing has always employed heavy machinery for its manufacturing needs. The machinery already involved in continuous manufacturing need only be converted or evolved. It must accommodate inter-communication between machinery to make Industry 4.0 a reality. Although this is easier said than done, the industry has been making slow but steady strides towards Industry 4.0.
Omnichannel or Multichannel Capability Via eCommerce
The most significant upside for process or continuous manufacturers is the omnichannel or multichannel capability. It can be implemented through the digitization of the manufacturer's business. Many manufacturers have already committed to an omnichannel or multichannel approach to business. The majority of these businesses, if not all, have adopted eCommerce.
As far as manufacturers are concerned, the biggest blow their business could receive is when the market demand for the products goes down. Hence, they have adopted eCommerce into their business, effectively digitizing their sales process. The eCommerce capabilities allow manufacturers to keep track of their inventory. This even includes the products sold off via non-eCommerce channels.
Process/continuous manufacturing already uses machinery to perform most of the tasks. This makes it an ideal candidate for Industry 4.0. Most of the processes are already being performed by machinery. Hence, it should be relatively easy to establish full automation of the manufacturing process. Some companies have already tried this successfully in the pharmaceutical industry. Furthermore, automation can now be employed in many aspects of the business. Furthermore, automation is not limited to the machinery but extends even to the internal processes.
With the help of an advanced sales method like eCommerce, manufacturers may offer variants of the same product to the customers. Although this can hardly be called a customized product, this leverages some flexibility to the otherwise rigid product specification that manufacturers can offer.
5. Process Manufacturing (Batch)
The batch type process manufacturing shares similarities with discrete and job shop manufacturing. The products are manufactured based on their demand. It ensures that there is no overstocking of the product or any unnecessary expenditure/loss.
Although the raw materials are similar to continuous manufacturing, the products created are of much superior quality. This is because it is hard to maintain strict standards in mass production. Some examples of batch manufacturing are the food and pharmaceutical industries. They have already taken various steps towards Industry 4.0.
Process (Batch) Manufacturing in the Smart Era
Process or batch manufacturing, especially those concerning products such as food or pharmaceutical products, undergo strict scrutiny. This is done either by the FDA or any other regulatory authority. Adapting to Industry 4.0 sooner or later is not an option for companies in these industries. The digitization of data so that they may be applied for accurate analytics is quintessential for such businesses.
As part of Industry 4.0, many industries have risen to the challenge, and the pharma industry is among them. As we move to pharma or biotech, certain elements such as biosimilars (identical copies of an original product) come into play. Even the slightest change in the manufacturing process can affect the pharma products. And analytics as accurate as the ones in Industry 4.0 can be a game-changer.
Another industry that has wholeheartedly adopted Industry 4.0 is the food industry. Although not perfect, the digitization seen in the food industry today is remarkable. World-famous companies like Jim Beam have adopted processes and practices which are digitally aligned to the principles of Industry 4.0. Most of the food industry has already adopted vibration and heat sensors.
They get the optimal result for the food products. Industry 4.0 will become a reality sooner than any of us had ever expected with the current rate. Smart solutions incorporated with eCommerce have optimized and streamlined the retail, logistics, and payment systems in the food industry. Furthermore, the growing need for personalization has reiterated the importance of direct contact with the customer.
Make-To-Stock (MTS), Make-to-Order (MTO), and Make-to-Assemble (MTA) Models in the Smart Era
Make-To-Stock or MTS is also known as push replenishment. It produces a predetermined amount of inventory based on consumer demand. However, determining the MTS model's correct demand is often tricky. It's hard to get it right at the correct time in the correct quantities. This can be remedied by applying futuristic methods. Incorporating eCommerce is perhaps the best of these as it can get data directly from the customers about your products. Furthermore, analysis becomes more accurate and easy with eCommerce.
Make-to-Order or MTO is a production strategy that allows the consumers to customize the order to their liking. This means the product is only manufactured after the order is placed. The order states the consumer's specific requirements for the product. The order or rather the entire business revolves around the consumer. Hence, it only makes sense to ensure that the order is accurate to the customer's liking. There is no better way to enable your consumers to express their idea than through their own words. Again eCommerce becomes your best bet to accomplish this. It revitalizes the most significant part of the MTO model.
Fabricators and other businesses adopt Make-to-Assemble or MTA. It stocks the basic components of a product. They are assembled only when the demand for the product arises, or the order is placed. This is one of the most effective methods for minimal wastage and comes with a lot of advantages.
However, it does have the drawback that the consumers have to wait. And the cost of assembling makes it comparatively expensive. With an eCommerce platform, you can provide your customers with insights. The insights include how far along the assembly process you are in. This, combined with real-time tracking, can help your customers feel at ease.