The Challenges of Electronics Manufacturing Services

Last week I attended the IPEC 2017 and gave a speech about our vision of the future of electronics manufacturing and the challenges we need to first overcome to start moving towards it. Here are part of my thoughts to share in written form.

The Future of Electronics Manufacturing

Like everything in this world, electronics manufacturing is in constant change. In all likelihood, the methods in electronics manufacturing management in the future will be drastically different compared to today.

We already see a movement towards fully automated “lights out” factories, where a major share of manual workplaces are automated and human workers replaced by robots. Complex manufacturing environments themselves are turning into enormous autonomous machines. And operating this kind of a shop floor will be as simple as operating a dedicated machine where we just have to focus on inputs and outputs – not how the insides are operating.

Therefore when looking at a global network of manufacturing, shop floors may be viewed as a network of huge production points, some, like machines on a shop floor, as logically linked as a daisy chain—and all virtually connected to each other.

We see the future of electronics production management as virtual factories—located in economically reasonable locations, their production can be managed from virtually anywhere via the Internet. As a company or private user you can host or rent a virtual manufacturing service and manage it despite the distance between you and the physical entity.

What about EMS?

Lights out manufacturing expects that the environment rarely needs any major re-configuration or setup change. This is the exact opposite of how EMS (electronics manufacturing service) works.

EMS companies must get by with a very high mix of products that are mostly produced in minimal amounts. For example, bigger tier 2 EMS companies may produce 50,000 different product designs and 50 million products a year (so the average lot size is around 1,000 pieces) by using 5 billion components globally.

This is a huge picture with many details to focus on, especially when production is shared between tens of globally distributed manufacturing plants, and those, in turn, consist of multiple shop floors and hundreds of machines that have to work perfectly.

Electronics manufacturing is a complex process. You must focus on big picture and the production line and even machine-level details, all at the same time. But the reality is that those two perspectives are rarely aligned at the same moment in time.

The challenges of EMS

So why is it so hard to keep an eye on the big picture and focus on details at the same time?
 What separates us from a future of full automation and virtual manufacturing? There are many reasons, but everything starts with simple yet complex challenges.

We have identified two main “pain points” that almost every electronics manufacturer faces today:

Data collected inconsistently
  • Fragmented visibility of analytic data

Interviews we conducted with electronics manufacturers have revealed two key numbers:

  • 19 out of 20 companies admit that they possess data but feel that they are rarely using it to learn
  • 18 of 20 companies feel they cannot view the big picture fast enough, and have to rely on outdated data

Causes and Amplifiers

The reasons why we face these challenges are simple – there is no standard way to collect data from machines. There are locally-generated log files, a variety of databases, and limited connectivity due to the lack of options or proprietary protocols, etc. This causes lots of manual work and micro management with Excel sheets to prepare the collected data for analysis. The analytics exist but how you see it is scattered – like comparing 10 different Excel sheets from different departments, because each one has their own format for reporting the status.

Most machines in a production line are already digitized; they produce tons of numbers every second. Huge amounts of data are generated by a production line every day. But as the data are not unified it’s very difficult to get real time value out of it—all because we must use time wasting, semi-automatic methods to see details in the bigger picture.

Also, the methods we use for data visualization are relatively static. When we look at our production management dashboards, we see dry KPIs that are more oriented toward showing what happened yesterday, rather than attempting to project what will happen today. For example, OEE: it is good to know it and understand what’s behind it, but learning from this KPI takes just too much time, especially in environments where mistakes on the shop floor may cost thousands of euros per second.

There are also amplifiers for the challenges. When there are only one or two lines with less than 100 workers in a manufacturing plant, it is easier to handle both the big picture and those pesky technical details, because the production manager can ask for updates from shop-floor operators and engineers whenever needed. But when production grows by a number of different products, the management process becomes exponentially more complex.

The trend is that the mix gets higher and volumes much lower. The more technologies advance the more they support mass customization. This, in turn, demands much higher scaling capability, plus greater flexibility, as there is a larger variety of products to manufacture at the same time. Issues that may be solvable by simple communication between people are no more—because it just takes too much time and is not accurate enough for the company’s growing needs.

A shop floor is like the kitchen in a restaurant. If you have seen the reality show “My Kitchen Rules,” you probably know that precise planning and domain experience are crucial to succeed, but in the kitchen there is time pressure. Things don’t go the way they’re expected, and if the customer is not served well he may go to another place. It’s a great example of focusing on the big picture and keeping track of the details at the same time.

You want to be aware of what’s going on and see multiple steps ahead at the same time. It’s easy when you have prepared and everything goes as planned. But conditions tend to change at the most inconvenient moments.

Data-driven approach

We want to solve these challenges and make shop-floor management much more transparent and forward-looking than it is today. As the two main challenges are basically lack of data at a given moment in time, we focus on data.

The first mission is to make use of existing data. In most cases the data exists, but managers or other responsible parties cannot view it the moment they need it. In some cases there are no real time views—only reports from the previous day or week. We want to change it by taking the data and visualizing it for you.

As the machines in production lines produce a huge amount of data, we only have to collect it and use it as wisely as possible. Our point is not to put too much effort into improving KPIs, but rather focus on what actually happens on the shop floor.

By combining the activities of different parts of the shop floor, we create a virtual shop floor out of connected machines and production points. This is a purely data-driven approach and will likely change how we see shop floor management in the near future—as it has changed how we see information technology today, compared to 10 years ago.

When joining electronics manufacturing and information technology, we see electronics factories as our development partners and advisors.

In essence, electronics manufacturing service is a global business. Connected factories are located in a variety of countries around the world so that the meaning of a single manufacturing plant has diminished slightly. Therefore, the approach to problem solving must also be global. As different regions have their own perspectives on production, to solve challenges is possible only with a cross-border knowledge exchange.

Our solution is a cloud service that connects factories around the world within one virtual environment. It functions as one central service, but at the same time each factory can be individually managed.

It is important to understand that the digital transformation of a production environment is an iterative process – there is no silver bullet. Solutions come only with deep cooperation between IT and manufacturing disciplines.

Connect with us!

We’re open to cooperation with electronics manufacturers who face similar challenges. Contact us by signing up for the demo on our website to receive more information about simFactory.

Link to original slides.

The removal of boundaries – Why?

Similarly to the digital transformation of the banking sector, we are heading towards the removal of boundaries in traditional manufacturing. The Fourth Industrial Revolution with the fusion of technologies will change manufacturing as we know it, and, let´s be honest, it will be a real challenge to convert the factories of the last century with all the legacy from mindset to technology. We are inspired by that challenge. The simFactory team, with its extensive experience of supply chains, is driven by the opportunity to be part of the next big paradigm change.

Our purpose is to help clients provide a better value proposition for their own clients by using our hybrid SaaS solution for industry. The core idea is simple, to aggregate manufacturing data from multiple sources, to process and unify the data and enable complex advanced analytics. The aim is to create meaningful real-time visualizations or predictions to facilitate decision-making at management level as well as on the shop floor. Altogether, the focus is on increasing production efficiency, raising product quality and reducing manufacturing costs.

We see that data collected and processed in real time are what drive change in the business(es) in question, and this can be seen in manufacturing as well. We are excited by being able to contribute and simplify manufacturing, which has been managed according to same principles for the last quarter of a century.

We know that near to real-time reports of operator and machinery performance are crucial for making shop-floor management decisions, but we believe our customers would like to be many steps ahead and be informed much sooner if future performance needs actions. We want to help them be proactive, not reactive.

Measuring of key performance indicators is a very important statistic method to give a fast, standardized overview of factory performance/efficiency. But we would like to make it more meaningful and remove artificial elements in formulas, for example manually measured cycle time. We believe our customers would like to see what is actually happening on the shop floor and see the values of KPI calculations which are taken directly from the source.

Real-time monitoring of the production is a must-have solution in today’s IoT era. Sensors can detect any stops and record downtime quickly and alerts can be sent out on time. We believe our customers would like to be alerted beforehand when downtime, a decrease in quality, or a shortage of inventory, etc., occurs. Otherwise, it is a bit too late – the damage has already been done. We want to move monitoring to the next level and improve visibility by adding a little prediction.

Let’s meet on Hannover Messe in April or request for more here.

Shortening the value chain − the goal of every company

Striving towards the improvement of services and products is a key factor in every company’s culture. Rising to the top in your industry increases your customer base, meaning more products can be brought to market and inevitably sustainable growth for the business. All in all, the high competitiveness of the company in its industry is guaranteed and shareholders are therefore happier.

In order to become the best, the value chain of products or services has to be constantly improved. Throughout history, the improvement value proposition has been accelerated by industrial revolutions. The latest industrial revolution, numbered 4.0, known as the era of digitalization and IoT, is picking up momentum.

Along with digitalization, some paradigm changes can be seen − experience-based manufacturing is becoming knowledge-based. In factories, more data is available for advanced analytics and dashboards, thus enabling on-time and precise decision-making in order to improve production efficiency and the quality of the products or service in question and reduce manufacturing costs.

In general, IT in electronics factories is 10 years behind compared to what is possible in IT overall. In factories, offline and monolithic solutions are used and in reality, production is not traceable in a real-time. With simFactory we are helping factories to modernize their IT and provide a new level of visibility on shop-floor.

simFactory is a data-driven electronics manufacturing SaaS that enables real-time visibility into production and provides high-quality preprocessed data for advanced analytics and decision automation.

Modular Electronics Factories vision at Industry 4.0 conference in Tallinn 2016

Interview with Terry London (Product Owner, Proekspert) at “Industry 4.0 in Practice” conference. To participate Modular Electronics Factories platform sign up for a demo.

There are millions of software developers in the world. But the world does not require software, the world requires user-friendly functionality that both looks good and serves real business purposes. This is where Proekspert comes in.

How do you bring factories in to the Industry 4.0 era?

In our vision, tomorrow’s factories should resemble today’s mobile platforms. Five years ago we were still buying feature phones – your selection was based on features. Now you’re in charge of the building – you select a platform and the applications to go with it. The same should apply to Industrial factories. When upgrading and assembling a factory you are mostly dependent on expensive solutions from proprietary factory line providers. The majority of Estonian factories creating custom products are operating according to the high mix/low volume model. These factories thus need to change their product directions often. A single factory line can consist of tens of machines, meaning that they have at least 3 different machine providers. The machines have limited connectivity, in order to create a complicated manufacturing execution solution every single machine needs to be integrated with the IT system, one-by-one. Replacing a device means creating all those interactions again, it’s expensive and time consuming.

We on the other hand want to offer a plug-in based solution which could be shared across different factories. With this, platform factories will enter the Industry 4.0 era with a flexibility and automation in production that keeps them competitive.

Proekspert has worked with a wide range of industries, can you name a few?

Our biggest focus goes on intelligent machines and their secure interconnection. For example, we are behind the development of leading drives that are used in the ventilation of car tunnels in Monaco. We’ve also worked with other, traditional industries like food production. We focus a lot on electronics assembly at the moment is because this is one of the most demanding industries. ODMs are eager to use the fastest and newest machines out there. Other industries are moving in a similar direction but rely more on human workforce and older equipment. Our platform integrates people, software and machines.

Have you actually been able to implement your modular approach in Industry or is it still at the visionary level?

We have reached a pilot phase where we are developing the approach together with early adopter customers. We have taken an open approach to speed up the time to market and are currently onboarding new pilot customers on daily basis.

The modular approach promises greater flexibility and agility, is it the most important aspect here?

We are talking about affordable and fast adaption to change. Similar to the smartphone platforms, we don’t foresee all the services and applications different developers will be creating moving forwards. The platform approach enables development of new services that will positively surprise us and our customers. All industries are affected by the fourth industrial revolution. This increases the importance of security concerns and reliability of connectivity for factories that have so far preferred to stay offline. This mind set will change in coming years, industry is moving forward and hybrid cloud solutions will become prevalent.

Phones and factories – can these two be brought to the same level?

Factories involve a great deal of care in people, business and technological aspects. Smartphones might seem simple but they have become essential and critical parts in our everyday lives – from managing other devices to dealing with financial decisions. A couple of years ago the first real-time trading app was released, Proekspert was behind the development. When it comes to trading every split second counts and the business impact of these decisions can be large. In electronics assembly the machines are very complicated and work extremely fast, the business stakes are high so, similar to trading, there has to be trust built into the system, integrations and its interfaces.

Proekspert’s software is actively used in the beer industry, why does it appeal to Proekspert?

Proekspert aims to be involved in developing products that change the world for the better and make people’s lives simpler, we are always on the lookout
for improving products and providing more business value. For example, for the drives behind the beer industry we are able to measure and analyse the performance of these motors and give accurate feedback based on our findings.

All these readings are extremely critical for the motor and system’s health. We are driven by a passion to develop future proof solutions that free up people’s time so they can concentrate on things that really matter, for example beer.