Articles & E-Books

 

How leading manufacturers are automating for success

Jul 17, 2022

Digitization is transforming the manufacturing landscape, as Industry 4.0 and automation enable companies to modernize and improve safety, productivity and profitability.

But danger lurks beneath the surface of these technologies.

Implemented correctly, Industry 4.0 and automation allow rapid responses to customer demand and coordinate production throughout the supply chain. Yet poorly implemented automation simply makes bad processes go faster — amplifying existing mistakes and destroying customer value.

Three steps to enhance automation in manufacturing

The Wipfli resilient manufacturers study — which surveyed 194 U.S. manufacturers on their abilities to manage challenging business conditions — identified three keys to successful automation:

1. Develop and deploy an automation strategy with defined goals

Leading manufacturers don’t wait for breakdowns to plan for new automation.

Some 36% of manufacturers have developed and deployed dedicated automation strategies and goals aligned with other company strategies. Yet 39% don’t have dedicated strategies for automation, instead addressing it via other strategies. And a quarter of manufacturers have no automation strategies.

A third of executives describe their companies as automation leaders; in this group, 44% have dedicated automation strategies versus just 32% of other manufacturers. How are they finding success? They’re turning automation ideas in action by establishing an automation roadmap, training an internal champion and involving employees in equipment transformations.

2. Establish a capable network infrastructure

Automation is a two-way conversation: managers and employees remotely instructing machines, which respond with information for real-time decision-making. These communications require updated network infrastructures — yet many manufacturers don’t have them:

  • Machine to machine: 66% of manufacturers require upgrades or a network overhaul.
  • Machines to enterprise: 68% require upgrades or a network overhaul.
  • Machines to suppliers: 72% require upgrades or a network overhaul.
  • Machines to customers: 67% require upgrades or a network overhaul.

Automation leaders are far more likely to have capable network infrastructures, as are those with dedicated automation strategies. For example, 52% of manufacturers with strategies have networks capable of machine-to-machine communication, vs. just 25% of other manufacturers.

3. Invest in automation

Automation sometimes requires a significant investment, but the returns can be impressive. For example, The MPI Group’s 2021 Industry 4.0 Study found that 63% of manufacturers believe the application of Industry 4.0 technologies to plants, processes and supply chains increased profitability by more than 5% in the past year.

Spending on capital equipment varies widely:

  • 35% of manufacturers spent more than 10% of sales on capital equipment in the past year
  • 40% spent 6-10%
  • 25% spent 5% or less

Almost half of manufacturers with dedicated automation strategies spent more than 10% on capital equipment vs. just 28% of other manufacturers. These long-range plans help leaders align budgets with plans and adapt to changing conditions.

Where should you automate first?

The Wipfli research report provides guidance into how manufacturers are using automation.

Most manufacturers report “extensive” or “moderate” application of automation and Industry 4.0 technologies. Activities most likely to see “extensive” or “moderate” application were:

  • Production scheduling/planning (80%)
  • Safety management (77%)
  • Production workflow (75%)
  • Quality control (75%)
  • Inventory tracking and management (74%)
  • Performance management (73%)
  • Transportation/logistics (73%)
  • Assembly (72%)

The top technologies that support manufacturers’ applications of automation and Industry 4.0 are:

  • Artificial intelligence (52%)
  • Big data/business analytics (48%)
  • Cloud computing (48%)
  • Mobile devices (40%)
  • Augmented, mixed, or virtual reality (38%)
  • Internet of Things platform (37%)
  • Advanced human-machine interfaces (34%)

What activities could your company automate with new technologies?

Wipfli develops and executes automation strategies

At Wipfli, our manufacturing specialists understand the factors involved with automation — and have a full suite of capabilities to help you assess, understand and prioritize digital opportunities. We can help your company become an automation leader. Learn how.

Explore our resilient manufacturers study to discover how manufacturing leaders manage innovation, growth, automation and resilience. The study reports on a range of trends and concerns — from how long it takes manufacturers to get new products and services to customers, to annual turnover rates for managers and frontline employees, to the number of data breaches manufacturers experience each year. Download your copy today.

Sign up to receive additional manufacturing content and information in your inbox, or continue reading on:

Author(s)

Bill Boucher, CPA
Manufacturing, Retail & Distribution Practice Leader, Southeast Regional Leader, Partner
View Profile