Shining a Light on the Future Factory

Posted on 11 Jan 2021 by The Manufacturer

Taking questions posed during an interactive discussion session, Nick Davis and Sarah Black-Smith revealed, among other insights, what the Future Factory might look like, the technical and leadership skills it requires and where business should focus their initial efforts.

What does the Future Factory look like?

Nick Davis is Industry 4.0 Leader at Deloitte UK
Nick Davis, Industry 4.0 Leader, Deloitte UK

Nick Davis: It’s very diverse, for two reasons. One, manufacturers are coming at this from very different places, some are mature, others are starting out, some have greenfield facilities, a lot have brownfield sites.

Two, manufacturing processes differ from business to business and the challenges that need to be solved vary. Different technologies also lend themselves to solving different business issues.

That being said, there are a number of adjectives that describe what the Future Factory is and how digitalisation helps to deliver it, such as connected, agile, visible and transparent.

The Future Factory provides insight into what’s happening day-to-day and makes that information available to those who need it to make effective decisions. It’s able to respond much better to changes in demand and to disruptions, and effectively leverages digital tools to react more quickly to those external factors.

Another adjective is proactive, being able to sense what might happen and responding to those scenarios far more easily compared to being purely reactive.

Sarah Black-Smith - Head of factory operations at Siemens’ award-winning factory in Congleton
Sarah Black-Smith, Head of factory operations, Siemens Congleton

Sarah Black-Smith: At Congleton, we’re working towards having a digital twin for every process to create a complete digital map of the factory. Any changes we’re making, we’re doing them digitally first in order to reduce risk and costs.

The other side to that is having self-learning machines that can self-correct and, ideally, products that are aware of where they need to go throughout an interconnected process. We also see the operator role being quite different in the future, so we’re upskilling operators to work alongside the technology.

What are the key business drivers behind the Future Factory?

SBS: Three things have driven the change at Siemens: speed, flexibility and productivity.

Typically, we’ve been a make to stock business, but over the past two years, we’ve introduced new make to order products. We need the customisation and the flexibility to deliver these products to similar lead times to our standard offering.

Productivity is crucial for our site to remain competitive within Siemens’ vast network of factories. To ensure we’re consistently achieving our targets, we need to know what the latest developments and technologies are and who we can learn from in order to not just keep up with but lead the market and the rest of the world.

ND: Similarly, the discussions I have with industrial clients broadly fit into three categories. The first is business growth, i.e. aspiring to significantly drive productivity or new revenue without a corresponding increase in manufacturing costs; or being able to rapidly introduce new or customised products.

The second is cost. There is always a pressure on costs, and addressing the cost of goods sold, overhead costs, working capital and reducing, say, inventory holdings, are discussions we often have with clients.

The Manufacturer - December 2020 magazine issue front coverThis article first appeared in the December issue of The Manufacturer.

Click here to subscribe 

We’re also seeing more and more manufacturers wanting to be great corporate citizens. So, aside from hard metrics, how can the Future Factory contribute to a sustainability agenda? How can it create a safer environment for shop floor operators? How can those operators use modern digital tools to make their jobs easier to perform and enable them to focus attention away from non-value added tasks?

How can the Future Factory help achieve our net zero ambitions?

ND:  Having greater visibility around your energy consumption and where idle machines aren’t being put to full use, for example, enables you to make informed decisions regarding the more effective use or retiring of particular assets. The same applies to water and raw material consumption, as well as any scrap or defects being generated.

How does the Future Factory improve supply chain visibility?

ND:  I recently worked with an industrial machine manufacturer that had some challenges around the predictability of when final product would be available for transportation. That lack of visibility prevented the transportation workers from optimising outbound logistics and achieving the best density from their various different hauliers.

The business embarked on creating greater visibility for their outbound logistics to understand the final stages, the last mile or metres, of the production line and what stage final product had reached. Knowing when product was going to reach the end of the line enabled the outbound aspects of the supply chain to respond and reduce costs, and even reduce working capital by holding less finished goods inventory.

Industrial IoT platforms: Make versus buy - image courtesy of Siemens

In a world where you need to constantly balance production changeovers with customer expectations around lead times, we’ve used simulation tools to optimise outbound expectations, customer demand, changeover times and the amount of inventory being held.

This has driven greater stability in terms of what the factory can cope with and therefore assists inbound supply chain planning.

How did you start your Future Factory journey?

SBS: Although we’re part of Siemens, Congleton is quite a small business of around 450 people. About six years ago, we made the decision to take four people out of their day to day operational roles and said to them, ‘What are we not looking at?’

That was such a key decision. When you’re in an operational role, it’s so hard to look up and out of the factory and explore new things. Giving that team the space and the focus to look at all these different things was a real turning point for us and led directly to the creation of our 2020 strategy.

ND: Many organisations are trying to take the success that Sarah’s described in terms of the Congleton facility and amplify that enterprise-wide. That can be really challenging; how does a business take that digital, almost lighthouse, facility and apply it globally?

Businesses need to strike the right balance between pushing ahead to secure early ‘wins’ but also being mindful of challenges to how they can replicate the technologies and ways of working they prove in one plant to the next.

Smart Factory scaling components. Image: Deloitte Analysis

Two additional points. First, it’s also about connecting the dots, so it’s not just the manufacturing environment, you’re also bringing in the broader supply chain as well.

Second, it’s so important to take the  concepts of Future Factory into the actual factory. Deloitte has a virtual Smart Factory that we take into the manufacturing environment so that during the course of the day, operators, engineers, quality specialists and so forth have the opportunity to experience and see different technologies at work.

It’s a fantastic way of gaining a much broader sense of engagement, with the additional bonus of collecting ideas from the workforce about where and how they see technology bringing value to their role, the wider business and themselves.

What are the challenges to be aware of?

SBS: Creating the balance between the day to day and the disruptive, strategic side has been one of the biggest challenges. Bringing in our new product portfolio brought a number of challenges, for example, because there was that healthy conflict around integrating new technologies and the focus that required, while still having to achieve our productivity targets.

ND:  In practical terms, knowing where to start can be challenging. The concepts, the terminology, the technologies available, the number of vendors, it creates a rich but potentially bewildering tapestry of capabilities.

There are always things you could do, but actually where should you start? It’s a balancing act because there is something about just picking something that’s going to deliver some value, albeit maybe not the highest value, and actually just getting on with it.

There is something about not getting stuck in over analysing the different permutations of what it could be and just getting things started. At the same time, you need to consider, if this works and it proves the value, how you are going to scale that across other production lines and facilities.

How are manufacturers addressing the need for specialist technical skills, and how do we attract those skills into manufacturing?

ND:  We’re seeing organisation set up ‘Centres of Excellence’ to help create these new skills. One business, for example, has supercharged some of its existing local efforts with additional investment on the proviso that those capabilities are going to support and benefit its global network of factories.

It’s also about how you use those capabilities to develop your own inhouse skills. You can benefit from some third party support but be really mindful about how you’re going to develop a sustainable capability where you need it. That means not just delivering specific steps but building a culture where you’re continuously innovating and improving.

SBS: Congleton’s focus has largely been around upskilling our people because that’s what will make us sustainable. From an AI point of view, we’ve just started that journey, so we’ve got a community of practice with a handful of people from across the business who are all really curious and want to learn, that’s a big part of it.

Something that Siemens centrally is also pushing is around developing a growth mindset in our employees and natural curiosity.

What does the Future Factory require of leaders and managers?

SBS: It’s less autocratic and more collaborative focused, working together, having empathy for employees and coaching to help them develop. It’s also situational leadership, the approach you adopt depends on the situation.

Sarah Black-Smith and Ashleigh Sumner at Siemens' Congleton Factory - image courtesy of Siemens

When COVID-19 hit, for example, there wasn’t time to canvas everybody’s opinion, the urgency of the situation demanded an autocratic style. But it’s about then engaging with people, listening to feedback and then making changes accordingly.

Of all the industrial digital technologies available, is there one that has been particularly transformational or easier to derive value from?

SBS: Digital, particularly simulation tools, have been a game changer for Congleton, enabling us to identify so many more opportunities for productivity gains. Automation and robotics have also played a big part in our productivity over the last few years. We’re interested to see how 5G develops, how we can take advantage and what the benefits will be for Congleton.

ND:  The thing we probably see more of is data and having visibility into what’s happening in the factory environment. Putting information in the hands of people is relatively quick and easy, but it has a big impact in terms of the informed decisions they can then make.

Once that foundation is in place, you can then layer AI, for example, over the top and so on. But it can be very enlightening to get that initial, richer picture about what’s going on and illuminate the hidden areas in your factory.

To discuss lessons learnt from manufacturers who have implemented Future Factories, contact Nick Davis via [email protected] or +44 (0) 20 7303 8653

You can also download Deloitte UK’s latest report, Scaling the Smart Factory to a smart network

*Except where stated, all images courtesy of Siemens