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The end of mass production?

I came across an old article a couple of weeks back about Toyotas history. The story about the masters of lean management, very efficient automotive production and at the side some figures from their (at that time) last year. Toyota sold 8.5 million cars that year. On average only 5 have been the same – same engine, same doors, same colour, same seats, ect. Now that means that Toyota has produced approx. 1.7 million individual cars that year. Crazy.

I continued my research a bit and stayed in the car manufacturing sector. I just looked up Mercedes. Big German Brand, again very efficient car makers. And here I found similar figures. What do you reckon, how many different covers can you choose for your Mercedes seat? Good guess but not enough – the answer is more than 140 different types. Amazing.

And now lets think about the actual production process. Once a customer decides to get a red car with yellow leather seats the production process gets initiated and a couple of weeks later your customised car gets delivered. How car manufacturers deal with all this special wishes?

The key element is a supply chain which works over several tiers. Basically you have to include your suppliers and of corse your suppliers suppliers and their suppliers. They all have to be informed about the request, than the machinery kicks in and parts / products get delivered. If we stay with our leather example – basically even the farmer should know when the next leather supply is needed from his cows.

The second important element is material flow. In many factories production is based on JIT (just in time) deliveries. For example BMW orders their cockpits from a supplier and allows them two days notice. The BMW supplier then tells his supplier that they’ve just sold model X or Z to BMW and that they now have to restock / reproduce certain elements. The even faster production method is JIS (just in sequence). For example Ford asks its suppliers to deliver doors for a Ford Fiesta with a two hours notice. Of course that means the supplier manufactures literately next door and can deliver in short sequences.

Now we discussed customised cars and their supply chain but does it work in other sectors as well? Certainly, because if you think of any furniture like a couch or kitchen, quite often you can choose fabric, colour and design. So those products are customised for you. Delivery takes longer but you’ll get your blue sofa as you like it. Customers requesting more and more individual styles. They want to decide which parts go to their car, how the new flat / house should look like and what colour the fridge will have. In that sense we lose the classical mass production.

Manufacturers do face a main problem: they have to be very flexible with their production. In the industry one of the flying phrases at the moment is “one batch production”.  It just means that companies don’t produce millions of products cheap in Asia and ship them around the world. They have to focus on their main clients and produce near the area where the demand occurs. So areas like Birmingham, UK or Dusseldorf, Germany will become very interesting because lots of people / demand are around.

The companies will lose out on the economy of scale compared to mass production and the labour costs are much higher in Europe than in Asia but you could compensate this with automotive production. Robots, integrated supply chains, RFID technology all the nice things industry 4.0 is aiming at. The second big benefit is a new way of logistics. So far businesses mainly focused on the suppliers but now they even have to improve the demand side of the business. This allows them to change delivery strategies and reduce empty trucks after delivery.

In one of our next blogs we’ll talk about the effects of 3d printing and recycling schemes for future manufacturing.

 

 

RFID & Industry 4.0

We talked a lot of industry 4.0 theory in our recent blogs. Now we found a video (in english) which shows you industry 4.0 in action. The video explains unique codes, shows RFID steered logistics and mentions benefits of collaboration along supply chains.

You can’t show the overall complexity in just 5 minutes but we believe it is a good start to understand the challenges and opportunities. Enjoy.

The video is provided by the German Television Station DW-TV

 




industry 4.0 – the big picture

In the past weeks we talked a bit about industry 4.0, cyber physical systems, smart manufacturing which all are part of the fourth industrial revolution.

Generally speaking the “internet of things” will be created. Every machine, products and humans get connected. It still is a vision and experts think it will take the next 20 years to materialise. The following video is provided by SiemensTV. Siemens is showing their competitive advantage (and quite rightly so) but the video shows also the possibilities and the big picture behind industry 4.0.

If you have special questions about industry 4.0 feel free to post a comment and start a discussion.




cyber-physical systems

Today I’d like to continue to talk about the future of manufacturing. In recent blogs we described what industry 4.0 means and how smart factories work. In both articles I mentioned a lot technical expressions and talked about computer chips which are responsible for the workflow or the organisation of entire supply chains.

To make it all happen CYBER-PHYSICAL SYSTEMS (CPS) (wikipedia link) are running in the background. You can find IT systems in all areas of the production process already but now they will become far more connected. Cyber-physical systems are at the heart of it and steer the links between machines, warehouse space, transport ways, sub-systems, processes, internal and external objects. It’s all controlled in realtime and therefor highly efficient and flexible. Production processes can be changed at short notice and downtime can be avoided. Production orders can be changed at short notice and informations will be passed on to the entire supply chain immediately so that they can adjust their processes. As wonderful as it sounds CPS is very complex and I only recommend to integrate it step by step, sector by sector.

A second important ingredient for reliable cyber-physical systems are smart robots. Robots were the big change in the last industrial revolution. Their numbers have increased significantly and the use in European manufacturing has almost doubled in the past ten years. Experts think that robots will become intelligent and will be able to adapt, communicate and interact in future. Equipped with all sorts of chips and electronics you can clearly see their impact on industry 4.0 and the link to cyber-physical systems. Smart robots will replace humans in simple work areas such as production, logistics and handling documents.

Now before I will get lots of complaints about machines taking over human jobs I want to add this important point. Yes robots will take care of all sorts of transport through the factory in future. Yes, computer systems will make the decision on what to produce next in future. BUT humans are the most flexible resource any company / factory can have. Robots can be controlled remotely, if a problem occurs human workers will be informed via mobile devices, make decisions and give instructions to the machines. That means that 24/7 factories don’t need workers all the time. So the time for human night shifts could well be numbered. Humans will play a big part if robots fail. Humans will repair robots. Humans will (re-)program robots. I believe we still need the same amount of manufacturing workers. Instead of welding they will be mechatronic technicians, instead of forklift driving they will be logistics IT developers.

No night shifts and developing the newest robot gadget? Sounds alright to me.

 

 




smart manufacturing

In our previous blog about industry 4.0 we discussed smart factories. We got a couple of responses. Many of them where questions so we decided to bring a bit more light into the buzz word tunnel.

What are we having today?

Today many manufacturers produce very large quantities. Economies of scale are important is the key focus and they mainly produce what they think they can sell. If for example clothing’s are produced in China and they have a logistics problem the products might arrive in the UK at the wrong season. The companies can’t sell them anymore and so they end up in second and third markets.

The second and maybe even more important point is that all products get manufactured in straight production lines. They are very cost effective and predictable but they are not flexible. If any tool is broken the line stops, if material is late production stops, if workers are on strike…

smart manufacturing

RFID : NFC - mgcThe difference in a smart factory is that they just produce to order. Now you say all furniture nowadays gets made to order and thats why you have to wait for your new couch 8 weeks before it arrives. Yes you are right – and there comes the “smart” part of the manufacturing process into play.

Lets stay with the example of your couch. You by it online, click through the different types, choose your fabric, measurements, colour and provide delivery details. From now one everything in the factory could go completely automated. Because yo’ve created a  data record which could now be implemented on a computer chip (NFC / RFID / QPR) and put on you order. The order arrives at the factory and with the information on the chip they start to build the base frame. From now on the information on the chip guides the base frame through the factory. It goes to string the fabric, moves to despatch and packaging and finally arrives at your door.

The chip doesn’t only provide the order of production steps. Since it knows what’s next it could also calculate which work station (of course all obliged with a chip) will be the next one to be free. And if all products, machines and delivery systems talk to each other you can hold back one product if you could finish two others and send them away with the next transport and so on. Smart factories will lose the actual queuing systems. Everything will be calculated via complex algorithms. So if you buy your couch online one of the questions will be if you would pay extra for fast service. If  you do your couch would be speeding through production.

 

The topic is very complex and a lot of things have changed in the past two years. Please feel free to send us questions and we will answer them in the next blog.




industry 4.0

One of the “new” buzz words around is industry 4.0 – It creates some specific hype in manufacturing because the industry starts talking about smart factories. The term refers to no less then the fourth industrial revolution. As in all previous industrial revolutions experts expect an increased living standard, more efficiency and better productivity.

little history lesson:
  • 1st industrial revolution: around 1760, UK, transformation from hand craft to machinery, increasing use of steam power, coal replaced wood
  • 2nd industrial revolution: around 1860, UK / US / Germany, mass production Ford Model T, Car manufacturing Carl Benz
  • 3rd industrial revolution: around 1970, US, first programmable logic controllers, Automotive
  • 4th industrial revolution: 2012, globally, total interconnection, digital conjunction between all areas involved in the production area

 

What does industry 4.0 mean?

Roland Berger describe: “industry 4.0 emphasises the idea of consistent digitisation and linking of all productive units in an economy.”

The basic understanding of experts is that machines get connected to the products they make. Yes absolutely the technology involved isn’t new but still offers some charm. It will be like magic if your supplies move through the factory to the next free workplace, if machines discuss amongst them the order of production or if some broken toys return to the factory and the machine knows instantly what to to.

Today we are already moving towards more individual production. For example Mercedes offers way over 100 different types of seat covers. Many products get produced in the wides diversity imaginable. In future we aren’t talking about mass production we will go back to small individual batches. This doesn’t mean that we stop producing in Asia but don’t be surprised if we get a couple more factories in Europe especially in UK or Portugal.

How does it work?

Industry 4.0 is the attempt to make factories more efficient. If you get your entire factory digital than you create a two way communication system. Tools know to which machine they belong, supplies know when and where they are needed and free machine capacity could be used for repair jobs. In the next step you could implement the entire company, sales, logistics, customer service and procurement. The result would be that the machine knows that a broken toy will be returned from Lincoln, they know when it will arrive at the factory and they know how what they need to repair. All in accordance with normal production procedures.

 

We will continue to bring you more updates on industry 4.0 and how to make smart factories soon.




transformer stations for offshore renewable wind energy

From February to June 2013 we’ve been involved in the construction of one of the first converter platform for offshore wind energy. The project was made for

Since it is a rather unusual project we’ve often had to explain it to clients, partners and future customers. We just came across a youtube video from a German Television Station (DW-TV) which explains in plain English: the project, the goals and provides you with some nice pictures of German engineering.

 

We hope you’ve enjoyed the video. If we could be of any further assistance please feel free to contact us.

 

 




heat usage of biogas engines

In many biogas plants you do get heat as a waste product. Waste product? Yes the huge biogas engines burn the biogas to create electricity. The energy will be used locally or is injected to the national grid. Everybody who did stand next to a car engine after a hundred miles trip knows that engines get hot. And since those biogas engines are supposed to run 8000 hours a year they produce a lot of heat. Some heat might be used locally to heat the house or swimming pool of the farmer but the rest isn’t used. It is also hard to safe the heat or transport it long distances. So heat is certainly an income stream which is in many cases overlooked in the UK.

What can we do with the heat?

 

Don’t run your biogas engines next to a farm where literately nobody lives.

 

If you run your biogas engines (I’m not talking about the entire plant – engines to burn the gas and create electricity and heat only) right next to your farm it will be out of place and far away from the point where energy and heat is consumed. The nearest point with a huge demand might be the next village. Transport of the biogas is solved via a gas pipeline. In the village the gained electricity will still feed into the national grid but will be used locally and the heat could be transported via district heating grid to local houses. In bigger communities you might be able to heat schools, sports facilities, swimming pools, medical or community centres.

To put that in some context: One 500kW biogas plant gains two million cubic metres of biogas. After running it through the gas engines it will create four million kWh electricity and 4.4 million kWh heat per year. This is the equivalent of 440,000 litres of fuel oil and it is enough to provide power to 1000 households with 4 people. The generated heat will provide another 150 warm and cosy homes. And thats why it is important not to run gas engines in the middle of nowhere. If you just heat your farm house and the chicken barn it will be a huge heat waste.

I know a lot of people will come forward now and complain about the huge extra investment for the gas pipe. I understand that it is a long process, local landowners along the rout are involved and bureaucratic barriers have to be lifted. But if you include this planning before you build you plant, talk to local authorities and schools – I’m sure all can benefit.

If there is a high demand to learn more about such heat usage examples I’m happy to list a couple of realised projects here soon.




interconnected traffic

How many hours do you use your car per day? Half an hour, three hours, ten hours? – The rest of the time it is just parked and therefore basically in the way. How often in your live have you been angry about people parking on double yellow lines and slow down the traffic in an entire street? The more you think about it the more you realise how inefficient it is to own a car.

The consultancy Frost&Sullivan investigated this topic and came to the result that in a city one car could guarantee mobility for 55 people. “Car Sharing” is the new word of the industry and companies like Daimler or Volkswagen investigate in “mobile people” concepts. Daimler e.g. tried a concept similar to the London Cycle Scheme in Ulm, Germany. They rented 140 parking spaces throughout the city and applied Smarts. So far 15% of driving licence holders of the area have registered for the system. Even students find it an attractive alternative to Bus or Train. One of the unique selling points is the guaranteed parking space.

Technology is the solution. If you are in the car and running into traffic or if your train brakes down an app on your smart phone should guide you directly to the next most efficient way of transport. By using GPS data it is easy to calculate all efficiencies. The real “problem” is to connect all date from Bus, Train, Tram, Plane, Car,… systems and suppliers. A good start for this are all “Easy” companies because you have easyjet, easycar, easybus,… already in place. If they would work together there would be lots of synergies and cost saving potential for the companies. And clients would get one “easy mobility invoice” by the end of the month, regardless which service they used. The next thing will be a mobility flat rate. Think about it when making your next travel arrangements.

 




the other use of parking meters

I’m sure you’ve seen the news a couple of weeks back about the latest German invention. In Bonn, the old West German capital the city council introduced parking meters for prostitutes in an attempt to tax the world’s oldest profession. The ticket will be around £5.30 per night and like real parking meters it just has to be valid for a certain time – 8.15pm to 6am Monday to Sunday respectively.

After reading this story two things came immediately to my mind. Despite the fact that this is a German machine it looks very inefficient to me if you run it just during evening and night hours. And the second fact is that there are many other groups where similar tax issues apply.

Now we will have a look at London and I’d like to bring your attention to all the street artists in town. If you take the London Eye or Covent Garden you will find always 7 or more actors, singers and other entertainers in the area. They always attract large crowds and are brilliant to entertain tourists. But alongside the crowd thieves arrive and as soon as the event is over you will find the place dirty because people forgot their coffee cups or sandwich wrap. In that case the council gets higher costs of providing extra security staff and street cleaning. Could they introduce parking meters to save costs and share the costs of running such small street events?

I think the concept has lots of benefits. First of all it works like pay as you go. If the street artist can’t work on one day he doesn’t get charged. The second benefit is that those meters are easy to install or might be in use somewhere already. So maybe in London we could use TfL ticket machines to provide the service. Another advantage is that either police or ticket inspectors take care of ticket validation. Since councils or government bodies employ them anyway extra hiring costs don’t appear and synergy effects to their current work should apply.