Digital Factory: digitization of the supply chains

These enablers are used to monitor and optimize the production process simultaneously in all of its phases and in communication with all of the departments, from design to product delivery, via the management of stock, suppliers and clients.

Subsequently, the flow of information between all of the actors that participate in the supply chain, thanks to the integral connectivity of the productive process and the interaction of all of the links in the chain, turn it into a full digital network in which connection in real time and flexibility allow the Digital Factory to adapt with agility and speed to new user requests: customized products that are delivered in record time. This is quite a challenge in an environment that is increasingly competitive and which forces us to continue down the path of cost efficiency without affecting quality.

But in the Digital Factory of the industrial sector of sheet metal and metal, there are other elements in the supply chain. This is the orchestrated integration with the plant operation, with the CAD/CAM, MES and ERP programs, a coordination that results in operational and competitive improvements, with cost and time savings and increased productivity.

This was already stated in a report by PwC, which discussed the 2020 Digital Factory within a horizon of three years: connecting the Manufacturing Execution Systems with the Enterprise Resource Planning is a substantial improvement, but it should only be part of a broader digital environment. When companies also integrate the supplier and client information in real time, the potential to continue gaining in efficiency increases. "This integration strategy, both vertical and horizontal, not only allows for the optimization of process planning or the execution of production. It also strengthens the relationships between the company, its suppliers and its clients", explains said document.

Ultimately, the Digital Factory in the metal industry implies equipping the factories with intelligence by implementing the latest generation technological tools and integrating them with the operative systems that are used in order to achieve a truly digital supply chain. The objective is to optimize the planning of demand, production, the distribution network, the inventory and the ERP.

But it is impossible to address all of this if another fundamental part of the chain is not transformed: the people. It is key for the talent to adapt to the new reality, to be able to understand it and transmit it to suppliers and clients. Managing the change is certainly difficult and, to break down barriers, relying on training is crucial. The II Smart Industry 4.0 study, developed by Observatorio Industria, reveals that the most significant obstacles in industrial digitization are precisely the resistance to change and lack of training. 

Digitization of the factory, step by step

Following all of this reflection, let’s summarize it in a schematic guide on how to transform the plant into a smart factory. The path leading towards the Digital Factory is long and we have to take it step by step and at an appropriate speed. It’s not so much about adopting each and every one of these technological enablers, but doing so progressively and with our objectives well-defined.

This way, and once again using the PwC report and our expertise as pioneers in the digital transformation of the sheet metal and metal sector as a reference, the phases necessary in the sheet metal sector in order to digitize the supply chain and turn the plant into a Digital Factory are as follows:

1. Define a strategy. To do this, the first step is to find out the business reality that we are moving in. What is the digital maturity of our company? From here, objectives and timelines can be established by looking at the factory’s requirements, for which it is advisable to set out priorities and, as we mentioned at the beginning, not to try to implement all of the tools from the offset.
2. Simulation scenarios. Starting with pilot projects is crucial, not only to produce something well, but to monitor the response of sensorized areas in order to achieve, for example, predictive maintenance solutions, to redistribute the workload, optimize stock or digitize production lines. Success achieved here can be replicated in the rest of the plants, wherever they are. Because the Digital Factory can communicate with any production center, be it meters away or thousands of kilometers away. At the moment, the multi-location of factories is one of the best formulas for competing globally, by identifying and making the most of the competitive advantages of other regions.
3. Connectivity, data and automation. Data is the new drive for factories and all of it is essential, but we have to connect it up so that it can provide our operation with better and faster solutions and, also, do so in an automated way and in real time to connect the different islands of software and hardware. If it is not digitized, we will not break through the bureaucratic barriers that slow down production and we may suffer from human errors. This is where the rest of the technological enablers come in. Thanks to sensorization and connectivity, data travels from one machine or process to the (Machine Learning) analysis solutions that operate in the Cloud universe and return to their area offering automatic responses to different situations, such as anticipating a possible shortage, prescribing solutions to predicted consumer behavior or redistributing the load from some centers to others. That is, to utilize the data generated to create control panels and to display Business Intelligence (BI) prediction models (Data Science). This way, the automation of the production processes optimizes production, guarantees quality and facilitates the customization of orders.
4. Integration. To achieve maximum efficiency in the supply chain, integration with the rest of the factory’s programs (CAD/CAM, MES and ERP) is key as it provides a global and orchestrated vision of the factory from all angles which, subsequently, allows the automation of making simple decisions that do not have an operational and/or strategic impact, reducing waiting times in the processes. But, equally, the standardization of the machines’ CAM is necessary in order to have a single and common piece of data. 
5. Business culture. The Digital Factory is a process that implies a lot of transformations, among them, that of the talent, as we mentioned, and to do this we need leaders who are dedicated and commit to change, otherwise it is impossible to transmit the importance of adapting to Industry 4.0 to our teams.

Never before have the different links of the supply chain been so integrated. Nowadays, the connectivity of machines, processes and programs allow it to be digitized so that it operates in a choral manner, optimizing the plant and promoting collaborative environments among all of the actors involved in the digital supply chain, the raison d’être of the Digital Factory.