The Next Industrial Revolution

Digital Manufacturing Is Changing The World, One Factory At A Time; Now Project Teams Must Transform, Too







Tesla's factory in Fremont, California, USA


are rolling with change. Whether they produce vehicles, athletic shoes or smartphones, manufacturers are transforming their factories to keep pace with digital disruption. Incorporating robotics, 3-D printing and sensor-enabled machinery, organizations are looking to new “smart” factories or retrofitted facilities to forge novel ways of cutting production times, costs and waste.

More than 75 percent of manufacturers either have launched smart factory projects or plan to do so, according to a 2017 survey by IT consultancy Capgemini. More than half (56 percent) have committed at least US$100 million toward such projects. And the benefits could be significant: Smart factories could add up to US$1.5 trillion in value to the global economy in the next five years.

“Manufacturers see opportunities to significantly accelerate profitability through these projects,” says Markus Rossmann, head of operations, digital manufacturing strategic services, Capgemini, Stuttgart, Germany. “It's an outstanding order of magnitude.”

To deliver nextgen manufacturing capabilities, project managers must be adept at change management. They're often tasked with helping employees become comfortable with robot co-workers and adapt to other newly deployed technologies. And then there's the ROI question: Will smart manufacturing investments deliver big enough payoffs? Leading organizations into new territory, project professionals need to help show the benefits of change—which aren't always obvious to the entire workforce.

Only 14 percent of organizations are satisfied with their level of smart factory success, according to the Capgemini report. The shift to digital manufacturing operations requires a fundamental reboot to assembly line culture and operations, Dr. Rossmann says. “It's easy to get excited, for example, about augmented reality or wearable devices, but you've got to prove the value of applying these technologies for these projects to be embraced.”

More than 75 PERCENT of manufacturers either have launched smart factory projects or plan to do so.

Source: Capgemini

For many manufacturers, the digital divide is too wide to leapfrog immediately into the future. That's why organizations are taking baby steps to slowly evolve their operations, relying on proof-of-concept projects to help win over sponsors and other key stakeholders. Starting small can help ease concerns. Workers may fear they will be replaced by robots and other new technology, says David Bergman, PMP, engineering manager and collaborative robot process developer at medical device maker Terumo BCT, Lakewood, Colorado, USA. “They are going to work alongside this technology every day, so they need to be involved,” he says.


“Manufacturers see opportunities to significantly accelerate profitability through these projects.”

—Markus Rossmann, Capgemini, Stuttgart, Germany

An employee of farm equipment manufacturer AGCO uses Google Glass in the assembly line of the company's Jackson, Minnesota, USA facility.



As part of his role to identify and implement new manufacturing technology into Terumo BCT's operations, Mr. Bergman created an R&D lab focused on collaborative robots. These robots are designed to safely work in the same area as humans, which saves space and allows for a more seamless manufacturing environment, he says. The lab is used for feasibility testing and to give factory workers the opportunity to watch and interact with the robots.

“It's a visually different product than anything [the workers] are used to,” he says. “Once they realized what they can do, they got excited.”

In the first month of a yearlong testing phase, Mr. Bergman received 30 requests for projects to use the technology across the company. At the end of the 12 months, he evaluated each request and identified three rounds of initial projects. The first, in 2016, involved implementing robots in three areas of the Lakewood facility to address frequent ergonomic injuries, like carpal tunnel syndrome, among workers. “We picked a small application with a specific challenge attached to it,” he says. The use of robots quickly eliminated ergonomic complaints in those areas—a key performance metric for health and safety requirements.

“It was very successful and provided us with important lessons learned for round two,” he says. Those lessons included making sure the facility had the necessary peripheral machinery in place to present the raw materials to the robots so they can function without additional manual steps. This year, the project team implemented six more robots in a single operation area. Terumo BCT is planning to roll out more robots across its global operations in 2018.

“If we had started with one big project for the whole facility, there would have been a much steeper learning curve,” Mr. Bergman says. By starting small, his team won the continued support of executives and front-line workers, which helped deliver measurable results.


“If we had started with one big project for the whole facility, there would have been a much steeper learning curve.”

—David Bergman, PMP, Terumo BCT, Lakewood, Colorado, USA


Many digital manufacturing innovations are so new that organizations are starting from scratch when trying to understand scope or evaluate risks. That's particularly true in less mature markets with limited experience implementing smart factory projects.

In China, for example, manufacturers are eager to join the smart factory revolution, with the government providing certain financial aid as part of the “Made in China 2025” manufacturing innovation campaign. With wages on the rise, manufacturers see technology investments as a necessary step to curb costs while improving quality and meeting demand. Yet many organizations lack the experience to plan and implement these projects successfully.


A Gestamp Automocion factory in Abrera, Spain


“Many companies don't know what they need or how to scope [their projects]. That can be a problem,” says Peter Rohde-Chen, PMP, general manager at manufacturing software company iCubed4, Shanghai, China.


“We... backlog the rest of [clients’] ideas for future sprints if there is time and budget.”

—Peter Rohde-Chen, PMP, iCubed4, Shanghai, China

One client hired iCubed4 this year to develop the automation software for its industrial 3-D printing factory that would help build small houses. But the client insisted that Mr. Rohde-Chen's team scope the project based on specs, without allowing them access to the facility. “It should have been a straightforward project,” he says. When the manufacturer accepted the bid and Mr. Rohde-Chen's team began work, it found the plant also had a logistics system that had to be automated in order to move the elements of the printed houses between production steps. That led to major delays as his team rescoped the plan and addressed the resulting budget changes. iCubed4 ultimately agreed to split the cost of the logistics equipment integration in exchange for the copyright to the custom software developed for the project.

“It was a frustrating experience,” he says. “From then on, we started doing agile only.”

Taking an agile approach allows for fast iterations and lots of feedback, so project teams and stakeholders can get a firm grasp on how the technology works—and how it will deliver benefits. For example, once clients agree to agile approaches with weekly feedback sessions, they begin to see the possibilities of the technology and to identify incremental changes that can deliver business results, Mr. Rohde-Chen says. The challenge then is reining in their enthusiasm.

“We try to keep them focused on the most important goals for the current project and backlog the rest of [clients’] ideas for future sprints if there is time and budget,” he says. “If that budget runs out, we set those ideas aside for phase two.”


Getting everyone aligned on smart factory pilot projects is crucial. But it's also essential to define clear metrics that reveal ROI. The best measure of success is how these tools impact customer results, says Rajeev Chopra, PMP, materials general manager of the center of excellence for die body engineering and development at Tractors and Farm Equipment (TAFE), Chennai, India.

His organization recently deployed 3-D printing technology so factory engineers can rapidly generate multiple prototypes of tractor pieces to determine the best design to meet the needs of specific models. This approach helps to speed innovations and reduce waste.

“Too often a design that works on paper fails abysmally in real life,” he says. When that happens, it can add months to a project timeline, causing the team to miss critical deadlines and budget goals. “The 3-D printing technology eliminates that risk by producing a prototype that can be analyzed visually for acceptance.”


“The technology helps us de-risk our customer projects and timelines and better manage our resources.”

—Rajeev Chopra, PMP, Tractors and Farm Equipment, Chennai, India

For example, in a recent project to redevelop a headlamp that didn't fit a new tractor model, the TAFE team members produced multiple prototypes until they found one that fixed the problem. They were able to have the new design and prototype ready in just three months—half the time it would have taken without a 3-D printer. “The technology helps us de-risk our customer projects and timelines and better manage our resources,” he says.

Such success stories for TAFE's smart technology projects have increased support from the company's chairman. To build C-suite support, Mr. Chopra always positions the goals of the project in terms of business problems that it can solve. “The biggest problems project managers have are undefined goals, frequent scope changes and stakeholder management,” he says. Getting the support of senior stakeholders by presenting a strong business case for technology investments can help project managers secure project champions who will help to move these efforts forward.

“Speed to market is what all manufacturing sectors are striving for—and it impresses customers who are looking for innovative change in products. So today's projects are critical for organizations to gain momentum in digital manufacturing.” PM


Not every manufacturer is evolving slowly. Around the world, some organizations are launching full smart factory projects to drive time and cost savings and enable more rapid product innovation.


Location: San José Chiapa, Mexico

Completed: 2016

The US$1.3 billion facility's assembly process involves internet-connected robots, drones, lasers and self-driving forklifts that carry cars from station to station. The bonus: Facility operations began 30 percent sooner than other Audi factories.



Location: Ansbach, Germany

Scheduled completion: 2017

The company's first smart factory will use robots and 3-D printing to produce shoes with shorter lead times and less waste. Adidas expects the facility to eventually produce 500,000 pairs of shoes per year and is building a second smart factory near Atlanta, Georgia, USA to accelerate the supply chain for the U.S. market.



Location: Singapore

Scheduled completion: 2021

The German semiconductor company's US$77.8 million plant will feature automated guided vehicles that move chips across the facility, collaborative robots, internet of things sensors and advanced analytics. The combined technologies are expected to quadruple the plant's chip output rate.



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