The onset of the pandemic exposed vulnerabilities in the supply chain. Since then there have been articles on supply shortages and disruptions for about every product imaginable, from semiconductors to board games. Experts warn that supply chain problems won’t be going away any time soon.
This has all reignited conversations around the importance of bringing production back to the U.S., or nearshoring, shifting to low-cost but less distant countries. But even as the headlines focus on shortages and supply chain issues, many manufactures are finding their biggest struggle is skyrocketing demand; industries ranging from building materials to snack foods are selling all they can make; their challenge is how to wring maximum output from current facilities even in the face of hiring and logistics challenges.
Shadow factories
The potential good news for those manufacturers is that there are full factories-worth of capacity hidden inside the inefficiencies of our current manufacturing infrastructure. I like to refer to the act of unlocking this capacity as creating “shadow factories.” Uncovering these shadow factories can translate into increased production and output–purely through increased efficiency of existing assets. Taking this approach prior to building new facilities can potentially save companies one trillion dollars, reduce their carbon footprint and avoid having to try to hire a full team to run a new factory when they can’t even fully staff the current ones. How can this be achieved? Companies need to work smarter and apply different technologies and tools to minimize downtime and waste.
These are the keys to unlocking the potential of shadow factories.
Eliminating unplanned downtime is a great start
One use case manufacturers should look to invest in to improve capacity is reducing downtime and machine failures through machine health solutions. A critical machine failure can bring an entire production line to a halt. Machine health technology can detect potential machine failures and how the assets should be fixed before machines breakdown. This eliminates the need to schedule planned downtime and prevents unplanned downtime from occurring. Critical assets at manufacturing plants can continue to run without interruption.
Companies that invest in IoT and AI machine health technologies are able to better access the production value and capacity of shadow factories. By applying machine health solutions across four factories, over the course of a year PepsiCo was able to increase capacity and save over 1 million pounds of snacks. The factories that used machine health technology had zero breakdowns, interruptions, or incremental costs for replacement parts. The unlocked capacity was equivalent to four extra months of runtime.
Use that foundation to impact process health
With the insights from performance of assets in place, that data can then be married with other data about materials, processes and environmental factors to start to get a complete picture of the correlated factors that impact yield, waste, quality and uptime. This unified view across production creates new opportunities to increase output by pulling all the levers available, from which formations run on which lines for minimum waste to whether planned downtime windows can be skipped to create more production time.
Focus on digital visibility
Once companies have successfully adopted machine health technology and improved maintenance processes, they can think big picture and ask the following questions: What would we do differently if machines stop failing? How would we change our operations? To create a more resilient supply chain, companies should invest in other technology use cases that create end-to-end visibility across the whole supply chain. Digital visibility shows, in real time, what components or raw materials manufacturers need, how their supply chain is providing them, and what they’re manufacturing with them. With greater digital visibility, companies can predict shifts in demand with much more flexibility and efficiently switch suppliers or products in response to, or even before, major disruptions.
Invest in Workers
Improving capacity of factories isn’t just about implementing technology. Investing time and money in training workers and creating efficient workflows is also a key factor. Eliminating the need for more factories will reduce the number of new hires needed in the short term but manufacturers will still need to address the manufacturing skills gap. Adoption of newer technologies like automation is creating more jobs within operations, but there aren’t enough skilled workers to fill these positions. Manufacturers should invest in training and reskilling programs for the current and future workforce to ensure workers know how to use new technology as effectively as possible.
Manufacturing workflows can also be improved by using a connected worker platform. Connected worker platforms allow manufacturing employees to work remotely, collaborate, and share operational data and insight so they can become more autonomous in the face of disruption. Creating shadow factories through technology adoption can help alleviate some of the immediate supply chain issues and can help kickstart onshoring efforts. In order to unlock the full power of shadow factories within each plant, companies need to strategically invest in digitization and the manufacturing workforce. Strengthening our current infrastructure is critical before building new factories that are also underutilized and facing the same flaws that have been present for decades.