We can help you navigate through available funding and digital incentives to better capitalize on the opportunities that best align with your manufacturing goals and strategies.
Published: April 22, 2024
Updated: April 22, 2024
In a landscape marred by labour challenges, rising inflation, and supply chain risk, the manufacturing sector is presented with incredible opportunities to harness the efficiency, insight, and connectivity enabled by Industry 4.0.
Artificial intelligence (AI) and big data are at the heart of a major shift towards analytics-driven manufacturing, offering a strategic pathway to enhancing Overall Equipment Effectiveness (OEE) and empowering decision-makers with deep, data-informed insights.
Canadian manufacturers don’t have a choice but to adapt. They have to build in efficiency and cost cutting, and perhaps the easiest way to do that is to apply technology to their day-to-day.
Four practical impacts of data and AI on modern manufacturing
In Canada, more and more small and medium-sized manufacturers are recognizing the value of digital transformation. While the shift is encouraging, the current state of digitization is uneven. Many manufacturers continue to be hampered by manual processes and fragmented supply chains.
"If it takes a manufacturer a week or a month to understand their production numbers or they spend an entire day per week generating their weekly reports, that's not acceptable in today's world. If your competition is a month ahead of you in understanding their business, you're at a huge disadvantage."
Data and AI solutions are fully within reach for manufacturers of all sizes. Our article dispels some of the misconceptions around these technologies being too expensive, complex, or low-value.
If you're just starting with digital solutions, here are four areas where data and AI can offer the most immediate and impactful benefits.
Next-level efficiency and productivity lead to decreased costs
In manufacturing, efficiency is the engine of excellence.
Repetitive artifact creation within manufacturing can be made considerably more efficient using generative AI (GenAI). GenAI can analyze your business’s corpus of documents to generate documentation, summarize information across multiple documents, create templates, and produce quotes, term sheets, project management assets, or operational and safety manuals.
Leveraging GenAI a step further, manufacturers can integrate it directly into their operations to analyze proprietary company data from various sources like production lines, quality control systems, and customer relationship databases to create detailed, company-specific documentation that can be used across the organization.
Excel, for example, is an excellent tool, but it can lead to limitations in scalability, collaboration, and real-time insights. Version control is also difficult to maintain and there’s a risk of documents getting lost or interpreted differently. Creating a single source of truth takes the ambiguity and chance for error out of the operation.
Another practical area that can drive efficiency is cloud technology, which simplifies the process of value extraction without the need for expensive and complex proprietary solutions.
“Cloud can help you aggregate your data from all departments, get a holistic view of your business, and generate reports in real time to help you make decisions,” Dostaler says. “Moving to cloud-based data systems can also lower the capital cost of having to hold the data on-premise.”
Predefined models can be applied immediately, simplifying the implementation process.
The more awareness you have about your operation, the more informed your decision-making can be. The ability to have real-time data and situational awareness amplified by having machine-based predictions can make every one of those decisions have a greater impact on productivity.
Real-time insights are readily accessible
In a manufacturing landscape where you are selling as you produce, understanding the minute-by-minute changes in production, demand, and resources becomes paramount.
Data analytics and AI-driven insights propel rational and robust decision-making, using large volumes of data to generate predictive models and trend analysis. These valuable insights empower strategic planning, enabling manufacturers to shift from being reactive to proactive.
Reporting solutions like Microsoft’s PowerBI or Tableau Software can provide highly detailed insights into production numbers or sales forecasts. Depending on the sector, consideration can also be given to external data like weather patterns that may impact operations.
AI-driven systems streamline data capture with pinpoint accuracy throughout the entire production process. These smart systems can automatically gather data from sensors, machines, and production lines to identify patterns, revealing gaps, opportunities, and data attrition. This holistic view helps sculpt a fully integrated manufacturing process where every cog in the machine is informed by data.
Interactive data visualization software, equipped with a GenAI-powered Q&A feature, enables instant creation of highly customizable reports right at your fingertips.
Optimized value and supply chain
Data empowers manufacturers with comprehensive visibility into their supply chains, allowing them to accurately forecast demand, monitor inventory levels, anticipate shortages, and implement a successful preventive maintenance program that improves OEE.
“If you can predict when machinery needs to be maintained and you have a schedule for it based on your predictions, you can optimize your supply chain so you have the right people and the right parts in the right place at the right time,” notes Dostaler. “You may also have the advantage of buying parts in bulk because you have a better forecast of what you'll need, reducing your costs without overstocking your supply.”
This intricate understanding of supply chain dynamics paves the way for a deeper analysis. The application of data to 80/20 analysis is fundamental for staying competitive and maximizing ROI while ensuring operational cohesion from the production floor to the finished product.
The 80/20 principle suggests that 80% of outcomes come from 20% of causes. For a manufacturer, this might mean that 80% of production output comes from 20% of the skilled workforce, or that 80% of sales might come from 20% of product lines.
As expectations evolve around environmental, social, and governance (ESG) considerations and the strategic management of supply chains, the manufacturing sector is increasingly turning to technology as a resource to tackle these emerging challenges head-on.
With the aid of technology, manufacturers can embed ESG values deeply within their supply chain processes, elevating operational efficiency and promoting a culture of sustainability and social responsibility.
Moreover, AI's ability to optimize operational efficiency leads to decreased waste and subsequently, a potential reduction of overall production costs.
Talent attraction and workforce productivity
A growing skills gap and ongoing labour shortage are significant obstacles in manufacturing, but they also offer a clear call to action for industry leaders, providing endless opportunities to transform these challenges into stepping stones toward a more resilient, skilled, and adaptable future.
"Efficiency is directly linked to the amount of labour you need to do the job. With digital tools, you can gain a better understanding of your business and predict certain conditions, allowing you to optimize how you’re staffed depending on those needs."
Robotic process automation (RPA) and AI automation can take over highly repetitive, simple tasks, freeing up human employees for higher-value tasks.
It's important to understand that data and AI are not there to replace existing jobs, adds Dostaler. They're there to assist and facilitate work so that people can be more productive and focus on tasks that require human interaction, creativity, and problem-solving skills, and less on the monotonous, repetitive tasks.
Implementing RPA is far less complicated than widely assumed. In most cases, it can be overlaid on top of existing applications and solutions, without requiring a complete system overhaul.
Practice shows that manufacturing environments that embrace innovation also act as a magnet for top-tier talent attraction. The current generation of workforce is eager to engage in environments where state-of-the-art technology is embraced, making tech-forward manufacturers stand out as attractive workplaces.
Did you know a range of government incentives are available to help manufacturers adopt digital technologies?
Putting data and AI to work in manufacturing
Explore what's possible when manufacturing companies harness the capabilities of data and AI. These case studies illustrate the impactful changes and the significant advances in productivity, efficiency, and innovation that are reshaping the industry.
The challenge: Maintaining operational and logistical efficiency was critical for our client. Scheduling had to accommodate fluctuating production volumes, last-minute orders, maintenance downtime, and potential disruptions, requiring a delicate balance to ensure that throughput and delivery deadlines were met without compromising the quality of their outputs.
The solution: To optimize their production schedule, we leveraged the company’s historical and daily input data to apply mathematical optimization techniques that uncovered ways to optimize their operations in a way that enhanced efficiency while ensuring that existing workflows were not disrupted.
The outcome: This strategic approach allowed for a more responsive and adaptable scheduling system, markedly improving our client’s productivity and efficiency. By maximizing the throughput of their operational processes and minimizing waste, the manufacturer achieved higher levels of production alongside optimized costs.
The challenge: Our client relied on Excel for reporting, limiting their ability to efficiently analyze and visualize their vast data sets and variables. This resulted in hindered operational insights and decision-making processes, exacerbated by data fragmentation and silos that impeded collaboration and a holistic understanding of operations.
The solution: We implemented PowerBI analytics and cloud data architecture to modernize, digitize, and automate manual Excel processes. These digital solutions captured, migrated, and measured data to perform Overall Equipment Effectiveness analysis. The manufacturing company received instant visibility into areas that weren’t meeting targets and was able to take action to capture and classify the losses. Using visualization tools, our team mapped losses to their causes, allowing our client to develop an action plan to avoid losing profits.
The outcome: Our client can now view data across their entire operations in real time and from a single location. They have the ability to monitor up-the-minute performance and identify issues and opportunities in their plant that previously took too long to generate or had too many inputs for a single human or team to calculate.
The challenge: A high level of customization and expansive product offering led to highly complex operations for our client. Their immediate goal was to obtain insight into and improve declining profitability. Over the medium term, they wanted to simplify their product offerings and overall business, while charting a path to growth over five years.
The solution: Our team leveraged 80/20 analytics to gain granular visibility into our client’s operations to pinpoint the cause of declining profitability. Building a customized PowerBI dashboard to visualize these trends allowed us to uncover opportunities for pricing enhancements and identify segments that can support strategic growth, including retail network expansion and customer-product portfolio optimization.
The outcome: Our tactical analysis rationalized and simplified their operations, streamlining operations by reducing low-value customizations, enhancing inventory management, and boosting overall efficiency. These enhancements resulted in a $5 million increase in bottom-line profit.
How BDO can help
Data and AI are introducing a new chapter of innovation and operational efficiency for manufacturers. The age of intelligent manufacturing is here, and early adopters stand to gain a significant competitive advantage.
Whether you're just embarking on your digital adoption journey or seeking to optimize existing solutions, we can help you leverage government incentives to fund innovation, ensuring your investments are strategic and aligned with your business objectives.
Following a four- to six-week evaluation, you’ll receive a digital assessment roadmap and initial view of your small to medium operation. This first level of reporting can make a noticeable benefit for manufacturers looking to pinpoint immediate areas for efficiency gains and plan strategically for the future.