AlixPartners
Assembly Line
How Off-the-Shelf Tech Can Make Factories More Profitable
Many smart factory proponents, bedazzled by technology, overlook the biggest potential sources of value creation. We’ve seen this in visits to hundreds of manufacturing sites over the last five years: that most manufacturers make far too little use of readily available data. Labor hours, for instance; those numbers are collected for payroll, but rarely extracted from clock-in/out systems and analyzed to discover ways to operate more efficiently. Similarly, off-the-shelf RFID technology can trace scrap origins, and simple Internet of Things (IoT) sensors can deliver real-time insights into utility usage. The ability to see, analyze, and act on information immediately can have as much impact on factory profitability as advanced robotics, at much lower cost.
The best leaders for smart factory projects are experienced executives who combine manufacturing pragmatism with digital savvy. Too many balance sheets show write-offs for factory modernizations that didn’t deliver the goods — sometimes literally. In this respect, many middle market companies have an advantage over larger rivals, in that their senior leaders are closer to operations both experientially and physically.