It’s back! While US manufacturing has not reached1979 peak job levels[1], it’s on the rise. A combination of the supply chain crisis which intensified during the Covid epidemic and Biden’s policies aimed at revitalizing American industry, has created more than 800,000 manufacturing jobs since 2021.[2] As “Made in America” makes its comeback, factory construction leads the resurgence. Manufacturing.net wrote in July 2022 that we were about to embark towards the “Golden Era of Onshoring.” They were spot on as 2022 saw a strong manufacturing resurgence.
An April 8, 2023, Wall Street Journal Article titled “America is Back in the Factory Business” discusses the rebirth of Made in America and the new momentum in factory construction. The US Census Bureau data indicates that 2022 construction spending focused on manufacturing hit $108 billion. 2022 was the highest spending year on record.
A New Era of Digital-First Modern Manufacturing
That spending is focused on modern factories, with high tech teams and equipment. And they are being built in urban cities and rural towns across the country. While the rust belt is seeing some of this growth, the manufacturing renaissance is not limited to the states between Illinois and New York. Coast to coast new plants rise giving companies an opportunity to rethink how they build a 21st century manufacturing plant.
“Digitization is the key to modernization,” notes the Harvard Business Review. For meaningful modernization, automation and digitization are non-negotiable when planning today’s new plants. A digital strategy is also critical to future-proof a plant amid rapidly changing demands.
The Benefits of Digital Transformations Across Every Manufacturing Department
Automation and digitization cannot be limited to the machines building your products or the back-office finance and planning organizations. Maintenance management needs to be top of mind as you are building new plants or modernizing old ones. Maintenance costs for manufacturing range between 15-40% of cost of goods produced.[3] Some research has that number as high as 70%. With costs that high, companies can generate real savings by rethinking how they operate and manage their maintenance organizations. Reactive maintenance is more expensive and costly than preventative maintenance. Which side are you on?
Building a smart factory must extend to maintenance organizations. Some of the biggest global companies across manufacturing, food & beverage, oil & gas, chemicals, and energy waste millions of dollars each year because of antiquated processes. Paper-based maintenance solutions are ineffective, and there are better more modern methods, yet they are still used. As consulting firm Deloitte referenced in their 2017 report, Predictive Maintenance and the Smart Factory, “Poor maintenance strategies can reduce a plant’s overall productive capacity by 5 to 20 percent.”[4] That results in significant monetary losses. Industrial manufacturers lose upwards of $50B annually in unplanned downtime.[5]
Now is the Time to Embrace Industry 4.0 – Or Be Left Behind
Industry 4.0 is the term associated with the fourth industrial revolution; a period driven by today’s technological innovations. Large plants modernized or built from the ground up with Industry 4.0 produce products more efficiently than those with outdated slow-moving processes and technologies. Industry 4.0 plants include smart machines that enable accurate data collection and transfer throughout the organization. As McKinsey noted, “Leading manufacturers are now realizing significant value from data and analytics, AI, and machine learning (ML).”[6]
Mobility is key a key factor in realizing that value. Building advanced mobile solutions for everyone, including maintenance workers, into your new plants and modernizing existing plants will drive immediate results. Whether your machinery is brand new, or years old breakdowns will occur. Going offline means costs to repair and significant losses due to downtime. “Companies at the front of the pack are capturing benefits across the entire manufacturing value chain—increasing production capacity and reducing material losses,”[7] McKinsey highlighted. Data accuracy and turning information into useful knowledge is a core benefit. In a previous blog, we explored how “Data integrity in industrial asset management must be present at all stages of production. It allows for more assertive decision-making and gives planners & schedulers the ability to anticipate when preventive maintenance on essential equipment should be.”[8]
The Benefits of Mobile-Based Solutions in Manufacturing
Organizations must update obsolete and time-consuming maintenance procedures now. Replacing paper-based systems with efficient mobile systems create five immediate wins:
- Hours saved daily by maintenance workers
- Real-time visibility[9]
- Greater data accuracy for maintenance and corporate
- Significant reduction in MTTR[10]
- Thousands/millions in cost savings and revenue[11]
Moving to mobile-based systems also create long-term benefits, including organizational resiliency, lower costs due to less overtime or contract repair workers, and more accurate work that can be completed in less time. In addition, mobile drives real-time data capture, improving accuracy and creating immediate efficiencies in your organization. Mobile solutions is a key driver in maintenance efficiency and productivity gains. Insights captured in real-time by maintenance workers using advanced mobile technologies help any team adapt to constant change and does so while increasing the bottom line.
According to McKinsey, “Implemented successfully, (Industry 4.0 solutions that includes mobility) deliver irresistible returns. Across a wide range of sectors, it is not uncommon to see 30 to 50 percent reductions in machine downtime, 10 to 30 percent increases in throughput, 15 to 30 percent improvements in labor productivity, and 85 percent more accurate forecasting”[12] It is not just one plant that benefits. Plant machinery is connected through modern sensors and other technologies. Your maintenance workers should be directly connected to back-end systems and capture, transfer, and record data in real-time.
Building the Factory of the Future Today
Supply-chain disruptions caused by Covid made CEOs more aware of lingering challenges. Government policies are incentivizing companies to “reshore” manufacturing to the US. Whether you are building new plants from scratch or debating how to modernize existing ones, the market is moving forward with advanced technology. There are clear leaders and laggards. Market leaders place a premium on modernized industrial maintenance. Leaders have three things in common:
- More efficiency and readiness when change or issues occur
- Digital and Mobility permeate the organization
- See significant time savings in maintenance operations
How Sigga Modernizes Plant Maintenance
Incorporating advanced mobile EAM into your plants does not have to be a complex or complicated initiative. With $108B of new construction planned for manufacturing the time is now to incorporate mobile maintenance solutions into your maintenance organization. Sigga's suite of tools, including a mobile app for EAM and flexible planning and scheduling technology, replaces paper-based processes with intuitive tech workflows that today's workforce demands. Starting from day one in a new factory or plant or innovating and adding to an existing one will benefit maintenance workers, improve your data collection, speed up planning and scheduling, reduce errors and limit equipment downtime. Your data team will thank you; your CFO will thank you and your shareholders will thank you.
Learn more, get a demo.
[1] Bureau of Labor Statistics
[2] https://www.commerce.gov/news/fact-sheets/2023/03/investing-america-biden-harris-administration-boosts-manufacturing-ahead
[3] Hans Lofsten. International Journal of Production Economics, 2000, vol. 63, issue 1
[4] http://www.ptc.com/product-lifecycle-report/iot-slashes-downtime-with-predictive-maintenance
[5] http://partners.wsj.com/emerson/unlocking-performance/how-manufacturers-can-achieve-topquartile-performance/
[6] McKinsey, “Capturing the true value of Industry 4.0”, April 13, 2022
[7] McKinsey, “Capturing the true value of Industry 4.0”, April 13, 2022
[8] Sigga Blog, https://www.sigga.com/blog/data-integrity-asset-management
[9] Furnas, a Sigga Technologies™ customer, and Brazil’s largest electricity supplier, saves 90,000 hours and $630,000 annually
[10] AB InBev, a Sigga Technologies™ customer, saw an 80% reduction in MTTR and 15% increase in technician productivity
[11] Sigga customers average >$350,000 per plant in cost savings/revenue
[12] McKinsey, “Capturing the true value of Industry 4.0”, April 13, 2022
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