Case Study 1: Industry 4.0. solutions and business development

Case Study 1:

Industry 4.0. solutions

and business development

1. The organisation at the beginning of the project

MobiGroz, a Central European based furniture manufacturing company was established in 2009 and is still managed by its owners. It offers custom-made furniture, working mainly in business-to-business model (furnishing e.g. hotels, restaurants, and cafés). The company caters mostly to the local market, where it has gained strong recognition. Its customers require both high-end design and very good levels of quality, which the company delivers thanks to close cooperation with designers and architects, as well as hiring skilled carpenters and woodworkers. The total employment in the company has recently grown to 70.

Due to the nature of the industry, as well as the high level of product customisation, the production process is only partly automated. Fully automated solutions were considered in the past but dropped because of low flexibility and high capital cost, leaving multiple tasks in the hands of production operators. These highly skilled craftspeople form most of the workforce, supported by few production engineers and administrative staff. The culture of

the company is rather traditional, with some established processes and procedures, but also strong emphasis on personal expertise and craftsmanship.

While high product quality is the source of company’s competitive advantage, there are some concerns as to the efficiency of the production process, with the general understanding that it tends to be unstable (moments of high-intensity work when an order is being completed alternating with much downtime). This might be caused by machine malfunctions, long retooling times, and – less often – delays in raw material delivery (especially textiles, which are imported from neighbouring countries). The production process also generates plenty of scraps, causing owners’ concern about the cost and the impact of their operation on the environment.

2. Challenges and opportunities

Some leading hotel chains have appreciated the quality of the product, and there is a specific, realistic perspective of high-volume orders to be delivered internationally. This perspective is however conditional on:

• being able to increase production capacity by at least 20%

• maintaining high production quality, customisation potential, and reliable delivery times

• controlling cost, with the potential to offer modest price discounts in case of high-volume orders.

The above are the main, most pressing concerns of the company owners for the short-term future. In the long-term perspective, they are also aware of the following:

• There might be other business opportunities worth looking into, such as made-to-order household furniture (which would require much smaller batches, but with potential for a wider market) and exploring made-to-stock products with furniture stores in mind.

• The customers become more and more used to communicating online and are likely to expect the possibility of customising their orders remotely. This is especially important in international orders, where direct personal contact with a sales representative may be less relevant.

• The environmental impact of the production process is an important concern for prospective international customers, and can either be a major advantage or a source of problems.

• On-time delivery of raw materials, especially imported textiles, depends highly on placing orders as soon as possible – and as such is dependent on the information

flow and the ability to predict demand.

• The factory offers a physically demanding work environment and seems to

underuse the potential of highly skilled employees, who are still required to

perform simple tasks that are highly demanding physically (such as the repositioning of parts on the production line).

3. Questions for group discussion (part 1)

a. Discuss the current situation of MobiGroz. What might be the best possible way for the company to evolve? Suggest an optimal business model and describe what changes would need to be introduced if it were to be implemented.

b. How might Industry 4.0 solutions support the desired change? Be as specific as you can, given your current level of knowledge. Describe the links between suggested solutions and desired outcomes.

c. What needs to be taken into consideration when implementing the suggested solutions? How does this company need to prepare for upcoming changes?

4. Direction of change

From the perspective of the company, it was important to introduce Industry 4.0 solutions in a way that allows to boost productivity while retaining the versatility of human workers. Workers and their representatives were placed in the centre of the intended change, and its main intention was outlined as redefining the work environment in a way that enhances human capabilities, rather than replacing workforce or eliminating the “human factor”. Because of that, the goal of the project was to create a human-centric digital twin of the

company to allow to create both readiness and skills to accept the forthcoming changes.

The following actions were suggested in the wake of cooperation with a consulting company:

•

business management should be trained to understand the business benefits of Industry 4.0. They should be exposed to success stories, best practices, as well as given a look at the competition, which will be achieved in cooperation with the leading furniture cluster in Bulgaria. Emphasis should be put on helping them to understand the importance of integrating automation systems with humans, to support worker capabilities better, while ensuring employee safety.

•

and leverage Industry 4.0 solutions. The company is planning to implement digital twins for automation and human-centred manufacturing. For that reason, sensors, cameras, data collection systems, databases, and umbrella solution such as UpKip (e.g., historians) should be put in place. A digital twin will use virtual and augmented reality as well as 3D graphic and data modelling to build a virtual model of the process, system, and offered products. This digital twin is an exact copy of the physical world, that will furthermore register real-time updates. The strongest benefits of the digital twin, relying on real-time data, are the possibility to simulate, model, and test business processes, increase production efficiency, improve the integration along the value chain, introduce principles of the circular economy into the business practice, and run predictive maintenance and workplace adaptation to individual operating features.

•

systems such as digital twins and adaptive workplace elements. Furniture manufacturing will still require human creativity and crafting/design skills so the focus of the training will be to show the technology yet and only as the driver for the efficiency (cost-time-material) of the production still powered by human skills.

•

invest in new organisational and business processes, including a redesign of production workflows and a reallocation of personnel to these. At present, most of the company employees are skilled craftsmen with few production engineers, so the goal of the process will be to integrate new technologies smoothly towards a workplace that increases competitiveness and boosts employee productivity. The design of new processes engages and solicits feedback from workers and their institutional representatives (e.g., members and/or experts of worker trade unions).

•

be properly and adequately disseminated to all stakeholders. Emphasis should be paid to communicating its benefit

.

5. Results of the first stage

During the first stage of the transformation, the company has created 3D human-centred Digital Twins of its workers represented in virtual reality, enabling the simulation of the workplace and the manufacturing processes, with emphasis on the interaction between workers and the workplace. These later provided the grounds for:

•

data for the quality of the products, along with real-time data about the movements of the worker. These can be used to provide the worker with real-time feedback about their performance and safety, such as information about their adherence to the customised guidelines.

•

workbenches and tools towards ensuring maximum productivity for the worker.

•

concrete instructions, e.g., accounting for different body types to maximise their safety and comfort.

The pilot implementation was intended to assess the possibility of the change to reduce operator training times, number of times a machine is halted (increasing Overall Equipment Efficiency), number of quality problems and defective parts. It was also expected to increase engagement and satisfaction for machine operators and workers in general.

By the end of the pilot implementation:

• new digital equipment (e.g. sensors at different stages of the production process) had been installed, connected into an overall data collection system and integrated with logistics processes

• information flow between production and logistics (including orders) had been streamlined using digital technologies

• the company had implemented new training procedures supported by digital twins • workers had been trained in Digital Technologies and Digital Enabled Work processes • the company had observed faster responses to production demand, better resource

usage, and overall reduction of labour and logistic costs

• over 70% of employees declared positive shifts in satisfaction, productivity, and efficiency of work,

KPI (workplace) QUESTIONNAIRE BASED ASSESSMENT workplace ergonomics 90% of employees evaluate their workplaces as more

ergonomic

job satisfaction 72% of the employees report higher job satisfaction

KPI (manufacturing) monitored results

overall equipment

effectiveness

(OEE = availability × performance × quality)

10% increase

manufacturing cycle time

for a product 12% decrease (for the benchmark product) overall productivity 10% increase

Problems with pilot implementation:

• About 10% of employees were not receptive to the change and their job satisfaction decreased.

• Some of the more advanced the solutions (e.g., the real-time worker feedback system) were not deemed sufficiently mature for enterprise deployment.

6. Next stage

The next stage of the project will build on the digital twin technology and existing awareness and skills of the company staff. It will be centred on using Industry 4.0 solutions to support product customisation (creating made-to-order products based on generic designs). Digital technologies will be deployed on the shop floor to support workers in the production of customised furniture configurations giving rise to a “furniture-on-demand model”.

The solutions will then be scaled up in three complementary directions:

• gradual implementation of more applications (predictive maintenance, process integration, etc.)

• transfer to more production lines • transfer to other factories.