How factory automation can reduce production costs

April 12, 2017 10:53 am

Automation has stirred the industrial sector drastically changing the way of production, reducing the manufacturing time, and the production cost. A review on how factory automation can reduce production costs.

The production lines at many companies have been manual for a considerable time. Even if there have been improvements in the assembly technology like faster pick-and place machines and smarter reflow ovens, the back end operations have remained non-automated.

There might be various reasons for this miss match. However, there has been an exponential rise in the labour costs and in addition to this, the quality requirements are getting more stringent as well. In the backdrop of this, we interact with experts who share their views on how factory automation can cause reduction in the production costs.

Automation will create more opportunities
The history of automation in the manufacturing industry can be traced back to the early use of basic pneumatic and hydraulic systems. Great advances have been made in the automation of the various activities formerly carried out manually. This is especially so in the intensive labour manufacturing industry, with most these being almost fully automatic using the latest technology. This has resulted in improved efficiency, along with a higher quality product coupled with the attendant savings in labour and costs.

“When the decision has been taken to automate a process, there is an initial CAPEX which may seem steep. But this is outweighed by the quick return on investment that follows owing to products being manufactured with the same specifications and precision repeatedly,” says Pradeep David, Country Head – India & Sri Lanka, Universal Robots. As per David, automation is precise and repeatable. Adding further, he says, “There is also a decrease in part cycle time since a lean manufacturing line is crucial for efficiency. Robots can work faster and longer thereby increasing the production rate. Another significant advantage is better floor space utilisation.” In his views, by decreasing a footprint of a work area by automating parts of the production line, the floor space can be utilised for other operations and make the process flow more efficient.

David also believes that automation will help save local jobs and create more opportunities. Traditional Industrial robots are caged to keep humans protected and out of harm’s way. Collaborative robots come in all sizes and shapes and have integrated sensors and soft and rounded surfaces for safety purposes and to reduce the risk of impact, pinching and crushing. In support of his views, David adds, “The biggest safety feature of collaborative robots is their force-limited joints, which are designed to sense forces due to impact and quickly react.” He claims that various studies have also shown that robots that work along with the workforce which are user friendly have decreased the risk factor at a marginal cost making the workplace safe for employees and have eliminated the risk of accidents in the factories by adhering to ISO TS 15066 safety specifications. We are seeing the advantages of human-robot collaboration to create and produce a better finished product.

Framework for innovative development
According to Ashish Manchanda, Managing Director, Finder India Pvt Ltd, improving operational efficiencies, reducing waste, proactive maintenance, IIoT based manufacturing data to ease decision making, reducing energy consumption, enhancing control system reliability etc are few of the buzz words associated with factory automation.

“However on a broader perspective, factory automation is intended to overcome the always lurking obstacles associated with the deployment of new technologies throughout the manufacturing process so that an overall continuous initiative is encouraged with unceasing adoption of modern quality management systems,” says Manchanda. He also feels that factory automation has created a framework for innovative development, manufacturing, and quality assurance, which recommended that quality not be tested after production, but built-in by design.

Explaining his point, Manchanda adds, “Many manufacturing companies have implemented modern automation technologies to improve manufacturing processes, but adoption to a complete utilisation of the technology benefits has been slow because introducing new technologies has resistances in the mindset of the operators.” Throwing light on why has this situation arisen, he feels that the very nature of an ‘innovative approach’ means there is a limited knowledge and experiential base that results in lack of openness in familiarising with the new technology and how it fits it in within the overall quality and performance approaches.
“The onus of automation technology adoption in the manufacturing sector lies equally among all the stake holders of the industry including the vendors, end users and the system integrators or machine builders,” says Manchanda. According to him, the best approach is to promote a planning and project management attitude within any organisation which is using or planning to use automation technology. He also says that the automation project managers must learn speak finance to justify automation, enhance their skills for selecting the right components, analyse best practices for adopting automated systems, critical parameters for selection or automation components, issues to think about developing an industrial network, consider about human factors for machine safety such that automation technology is able to improve the manufacturing outcomes.

Need of seamless connectivity
“Total cost of production consists of costs of raw material, labour, energy consumed, and wastage. This has not changed with time. However, today we are also aware, in a competitive market, the cost of not reaching market in time, of lost cost of not meeting at the latest consumer demand, and cost of regulatory compliance, cost of maintaining consistent high quality,” says P V Sivaram, Managing Director, B&R Industrial Automation.

Sivaram points out that these factors are significant and will determine the cost over the life-cycle of the product, though not just per batch or per shift. Explaining further, he says, “The means to be able to produce efficiently small batches of product, when and where they are needed, to tack and trace production data, and to perform in process verification can be achieved only by automation.”

According to his observation, in current times, factories have to move away from calculating productions costs based on its output and raw material usage. “Energy consumption, machine availability, gathering data from machines and OEE are being largely considered for optimizing processes and productions costs,” he observes. Energy monitoring enables factories to check their resources and optimise energy utilization. This proves vital in calculating the energy required for manufacturing various products and optimising the power leads to not only energy and cost saving but also earning a higher profitability.

Machine breakdown and unplanned downtimes have always hampered productivity, machine availability and resulted in wastage. Sivaram is quick to add that the predictive and condition based maintenance provides factories with an extra edge in machine availability resulting in drastically reducing unplanned downtimes. “The amount of raw material used and the amount of production output provides the wastage quantity, is a known fact. However, in a factory producing different products on different lines the wastage usually gets averaged out over the different products and lines,” he says.

Today, due to the newer solutions and the Industrial Internet of Things (IIoT), factories demand the exact wastage per product per line. To achieve this it is essential to gather data from the field and send it to the higher layers for analysis, which requires seamless connectivity.

Speaking about the offerings of B&R, Sivaram says, “APROL is an open, flexible and scalable solution from B&R, which enables factories and plants to implement energy monitoring, condition monitoring and process data acquisition in one system. This is a cost effective solutions for factories, as they do not need different systems for satisfying different needs. This can make new installation as well as existing installation smart and Industrial IoT ready.”

He further explains that the gathering data from various controllers on the field and moving it to the MES or ERP or the cloud is realised easily with B&R APROL solutions. For specific applications such as energy monitoring, condition monitoring and advanced process control, APROL offers out-of-the-box solutions that come preinstalled, preconfigured and ready to use. In a single, consistently easy-to-use platform, APROL unifies process automation, factory automation and infrastructure automation.

“The enormous benefits of APROL – hardware, software, redundancy and out-of-the-box solutions coupled with open source communication standards such as OPC UA, Ethernet POWERLINK and openSAFETY enable factories to add value to their already available production processes by increasing profitability and reducing losses and wastage,” says Sivaram.

Industrial automation: a life- force for manufacturing sector
For Sameer Gandhi, MD, OMRON Automation India, industrial automation is like an ‘essential nutrient’ or it as the ‘life-force’ of a manufacturing establishment. “Every manufacturing set-up strives to become more intelligent, more efficient, safer, and swifter, as it climbs up the value chain and gets evolved from a small scale to a medium scale to a large enterprise. Automation is the ladder that makes it possible,” he says.

In simple words, automation helps the manufacturers develop better machines. Explaining this point, Gandhi adds, “Machines that are functionally innovative to deliver exceptional benefits to their customers in myriad aspects such as quality, productivity, efficiency, accuracy, safety , energy saving, durability, and above all the tasks which are beyond human capabilities, to name just a few. All these benefits get directly translated to gaining ground in terms of cost and economies of scale, which is one of the key requirements to stay ahead of competition.”

To further explain his views, Gandhi takes an example of a typical set up of human inspection of engines. There are around 30 to 35 check points for this inspection. The variants are more than 40 and a manpower of 3,4 people is required. It, generally, leads to a very high amount of non-conformance products since this inspection is a test of human skill and attention span.

Gandhi says that the deployment of a Robo Vision solution for the same job would surely improve the conformity to the desired quality parameters. In support of his views, he says, “The robotic solution equipped with vision cameras has the ability to check innumerable pointers in a short period of time leading to not only much more efficient, error-free analysis of adherence to product quality standards but also improvement in enhancing human safety. Along with this, the solution can also send all the images to the server with check points for keeping and tracking the record of inspection.”

The process according to Gandhi leads to a significant improvement in the key performance indicators of the manufacturing plant which does reduce the production cost by removing manpower and increasing errorless inspection speed.

Thus in a way, being an essential and intrinsic element to all manufacturing processes, factory automation’s utility encapsulates the entire production chain, right from concept development to product development to manufacturing, systems, delivery and after-sales service support – and thus substantiates that its role is much wider than just bringing down the production costs.

Automation boosts opportunities.
“The value of automation is to decrease costs and increase revenue. A little closer look at both, starting with costs of automation will increase throughput, improve quality, increase repeatability, and reduce labour-related costs,” explains Ajey Phatak, Marketing Manager, BECKHOFF Automation Pvt Ltd.

According to Phatak, factors such as yield improvements, lower inspection costs, lower rework costs, and fewer failures from field installations implies higher mean time between failures clearly resulting in higher ROI.

Speaking about the total manufacturing cost, Phatak explains, “Instead of looking at automation as an isolated expense and analysing the result on singular basis it is appropriate to consider the total manufacturing cost for a product before and after implementation of automation.”

It has been observed that the integration of multiple production steps into a single compact simultaneous operation, the overall production cost increases as a result of the increase in the output due to either rejections or rework. Phatak strongly believes that smaller operations like sub-assemblies, final assembly, testing, visual inspection, marking can be optimised by appropriate mechatronics and automation. “Not only is there no manual handling of the parts during the entire assembly sequence but inline testing and marking can also be integrated. Further, especially with industrial pc based control automation and with IT integration the process data and production data can also be logged for each part produced and traceability can be maintained. This is a small step towards Industry 4.0 or IoT,” he believes.

It is a known fact that manual data collection is impractical and extremely expensive for such analytics. This being an added advantage of automation, helps reduce Cost of Goods Sold (COGS) by improved product quality and lesser rejections. Phatak is a strong supporter of automation. “Automation strongly supports the zero-defect objectives. Improving quality and repeatability at critical production process steps where high turnover of staff would have otherwise been needed is no more necessary and thus reducing input costs,” he aggressively puts forth.

Automation will often enable any manufacturer to accept customer orders from a demanding OEM customer. Without automation the manufacturer would otherwise not have considered accepting the project as a supplier due to the high deliverable volume, the quality requirements or the complexity involved. A few examples of a technology-enabled production line are the plastic injection moulding operations or high speed pick and place operations, primary and secondary packaging, bottling, FFS, labelling, pasting and counting operations.

With ever increasing and dynamic consumer demand, manufacturers continue to be under constant pressure to be able to scale their production suitably. In a highly competitive market and shrinking profit margins, it is imperative for manufacturers to maintain required capacity levels and quality at lowest possible total cost of manufacturing that includes a variety of expenses including, but not limited to – labour, raw materials, consumable manufacturing supplies and general overhead (rent, utilities, etc.)

As opposed to labour intensive operations, factory automation clearly delivers value by improving the productivity, providing operational intelligence and managing production & business risks. However, it is important to note that one size does not fit all. Every industry has its own unique operational requirement. In order to achieve goals of process efficiency and quality, it is required to right-size the factory automation depending upon the assessment of current and future challenges.

In certain industries like Life Sciences, there is a growing emphasis on improving Process Performance by continuous monitoring and online correction of process parameters and thereby, maintaining a consistent quality of output product. The emphasis here is on reducing wastage of raw materials and minimizing the utilization of utilities like WAGES (Water, Air, Gas, Electricity and Steam).

A typical packaging line would consist of multiple equipment from different OEMs with different automation vendors. While each equipment may individually be capable of a high Overall Equipment Efficiency (OEE), the challenge generally lies in increasing the line efficiency. This calls for tightly integrating multi-vendor supplied machinery by sharing necessary information, preferably in a common language. Thankfully, many automation vendors, OEMs and plant engineers have come together to create a common working ground. Among the few standards being propagated, OMAC’s PackML is gaining wide acceptance, and increasingly used by OEMs & End Users.

While machines become increasingly faster, it is necessary to make it functionally safe to operate at the same time. A safety flaw can not only result in physical accidents, but also the downtime that can cause significant losses, apart from penalties, legal costs, etc.

Machines, now are becoming smarter by providing access to data that has traditionally been lying unutilized and contextualizing it for providing the right intelligence to the right people and at the right time. This actionable information impacts key performance indicators such as production throughput, process quality, assets health and energy efficiency, delivering real business value.

Savings and efficiency in through IIoT
Commenting upon the ways in which factory automation can reduce costs, Piyush Rajpal, GM – Marketing & EU Sales, Industry Business, Schneider Electric India says, “Factory automation is undergoing a period of rapid change due to technical advances designed to improve operations. With influx of advanced technologies, requirements for operator intervention in manual settings or in open control loops will become increasingly rare.”
As per Rajpal’s observations, the fast networks will allow factory data to be available outside the plant in real time and secure networks will replace present-day slow, insecure communications. He believes that in order to achieve efficiency in factory processes, higher reliability and better quality output must be achieved. The framework that drives these changes is the Internet of Things (IoT). “When everything is connected, increased efficiency is possible and improved communication allows access to data where and when it can best be used,” adds Rajpal.

In manufacturing industries, large investments in existing machinery must be protected and investors are cautious when it comes to embracing new, disruptive technologies that would require further expenditures. In recent years the free availability of data is upending the way even the most entrenched segments and companies operate and leading to completely new business models. Explaining his take on the working of new business models, Rajpal adds, “Today, new business models are being discovered that can generate fresh revenue streams for these companies and this noteworthy transformation is being propelled by the increasing digitization in industries and the advent of the Industrial Internet of Things (IIoT).”

One of IIoT’s most important innovations is the quantum leap in availability of data from assets, machines, and processes. The availability of this data torrent, making it transparent, and combining it with analytics, are opening up totally new and more efficient ways to make the right decisions at all levels of the production process. This is where the new business models come into play because, alongside this newfound process efficiency, a host of complementary service offers can tap into new revenue streams.

Speaking about the role that IIoT will play in the functioning of the industry, Rajpal says, “With IIoT, the industry will shift from device-centric plants with simple diagnostics and fixed device capacities to digital, user-centric plants that accommodate multiple information sources, mobile equipment, mobile control and analytics.” Industrial businesses are facing a multitude of challenges – increased market pace and pressures, huge order of magnitude cost reductions that can only be achieved by unprecedented levels of operational efficiency and new demands on safety and cyber security. It is digitization that will play a major role in addressing all of these challenges.

As product varieties have increased exponentially and product lifecycles shortened, industrial companies can look to IIoT technologies to enable tight integration of smart connected machines and smart connected manufacturing assets with the wider enterprise. This will facilitate more flexible and efficient, and hence profitable, manufacturing.

Automating production: improving performance and productivity
“Manufacturers today are under constant pressure to scale their production as per the dynamic demand patterns while maintaining the desired quality and reduced cost. On the other hand, skyrocketing capital and operational costs posing a big challenge to balance operational efficiency and profitably,” says Sadashiv Lad, General Manager – OEM Business,Rockwell Automation India.

As per Lad, automation of production processes has the answers to the dynamic business environment challenges. Explaining his point, Lad adds, “As circumstances change, digital automation technologies support organisations in finding new ways to ensure demand is met. Cloud, mobility and analytics offer the flexibility and the real-time production information to help operators respond appropriately to dynamic market conditions and make better business decisions wherever they’re based.”

Apart from all this, Lad also believes that having the right staff with the right equipment reduces operating costs and increases productivity. Essentially, the technology available today makes it possible to get closer than ever to operational excellence and the business value attached to this.

Smart manufacturing with a connected enterprise
Paramananda Choudhury, Business Manager – Architecture & Software, Rockwell Automation India comes up with the following pointers while explaining how factory automation clearly delivers value by reducing the total cost of production.
• Improving overall equipment effectiveness (OEE) that combines operations, maintenance, and quality measurements in a single key performance indicator
• Optimising critical energy consumption by putting energy intelligence to work
• Making functional safety an integrated part of machine and process automation to reduce downtime that causes significant losses, apart from penalties, legal costs, etc
• Adopting Smart Manufacturing through capitalizing on Industrial Internet of Things for real-time access to plant data for faster, accurate and actionable decision making
• Enabling remote monitoring for easy access and monitoring machine data with fully automated and integrated systems resulting in reduced operational costs

Smart manufacturing, enabled by the connected enterprise, is driving new opportunities for end-users to optimise their production and supply chain. In order to gain competitive edge, they are looking up to their OEMs to deliver smart machines and equipment that easily integrate into their facilities, provide access to information, increase efficiencies, improve productivity, and support compliance.

It is important to note that one size does not fit all. “Every industry has its own unique operational requirement. In order to achieve goals of process efficiency and quality, it is required to right-size the factory automation depending upon the assessment of current and future challenges,” says Choudhury. He believes that this calls for tightly integrated effort of automation vendors, OEMs and plant engineers to create a common working ground.

Requirement of digital data and extensive networking
Speaking about the cost-effective production with automation, Milan Desai, Vice President – IMA Phoenix Contact (India) Pvt Ltd, says “The pioneering Industry 4.0 project shows how countries can develop and manufacture individual and flexible products at competitive prices. Manufacturing companies must continuously increase their efficiency and adaptability to maintain competitive edge on international markets.” According to Desai, initiatives such as Industry 4.0 in Germany, exemplify how this goal can be achieved by digitising industrial processes. The optimal added value can be derived from the digital data at any given time.” This in turn allows all kinds of criteria to be improved, such as costs, quality, flexibility, and resource efficiency.

He further adds, “Ensuring customer loyalty involves providing technical innovations and high-quality, tailored products as well as comprehensive service. It makes sense to ensure that the user enjoys advantages that can be appreciated across the entire lifecycle of the product or solution purchased.” These kinds of advantages can be provided for everything from the selection and engineering, to configuration, installation, and start-up, through to operation, service, and maintenance

Conclusion
Automation is an not just a valuable tool, but more than that it is a weapon for any manufacturing or production plant as it deals with issues like rising costs and shrinking profit margins. PC based automation would further help to integrate and monitor multiple manufacturing locations with equal efficiency.