How Industry 4.0 technology can help manufacturers offset inflationary pressures

As of today, manufacturers are facing supply chain and staffing issues caused by the global pandemic and by the added economic pressures caused by the war in Ukraine. Both events have combined to create a perfect storm, bringing about inflationary pressures not seen for generations, a challenge that individuals, businesses and governments globally are facing to navigate as best they can.

For manufacturers, this means grappling with tight margins, energy and raw material costs at their peak, and factory gate prices that are not keeping pace. Even with energy measures put in place by governments, the inflationary pressures facing manufacturers are expected to continue well into 2023. Therefore, the key to success, and in some cases survival, over the next 12 months will be manufacturers' ability to pass on price increases quickly and effectively.

What tools do manufacturers have to alleviate inflationary pressures?

• Reduce costs Reviewing the supply chain and input costs is a reasonable starting point for minimising inflationary pressures on manufacturing costs. Reviewing existing contracts and renegotiating or seeking new suppliers can be a good starting point to ensure fixed costs and overheads are known.
• Refine the pricing strategy: If you have a clear pricing strategy, you'll most likely need to review it to understand your costs and the profitability of the product/customer. Another factor to consider when analysing your pricing strategy is the nature of the products you manufacture and knowing whether they are niche and complex products where you have a competitive advantage, or if they can be manufactured by anyone and therefore it will be more important to reduce input costs to maintain margins.
• Improve productivity and operational efficiency Improving productivity and efficiency across the business is a good starting point for looking at where time and money can be saved. As in any business, reviewing processes and ways of working can sometimes fall off the list of priorities when things are going well. However, given the pressures manufacturers face today, it is advisable to review processes and see if they are working or if they can be improved. For example, if a shop floor looks busy, machines are running, operators are working on their production lines and products are going out the door, it's all good. However, it is necessary to know what the productivity of the machines is and how much they are used compared to what they could be used for. It is also important to know if there are processes in place to make the work of the machine operators as efficient as possible, i.e. to know what the main causes of machine downtime are and if anything could be done to improve them. This is where the Industry 4.0 technology, As machine supervision software, it can really help manufacturers counteract inflationary pressures.

At this point, many manufacturers think that the Industry 4.0 technology requires a large initial investment, which in many cases is true and of course is limited by cash availability and depreciation. However, there are machine monitoring platforms that are accessible and affordable. It does not require a large initial capital investment, it is quick and easy to install and therefore production plant disruption is kept to an absolute minimum when a system is installed. monitoring of industrial manufacturing machinery.

How can Industry 4.0 technology help overcome inflationary pressures in the factory? 

Increased productivity and operational efficiency by reducing complexities are measures that can help drive forward, thanks to the Industry 4.0 technology, such as «plug-and-play» machine monitoring software.

For example, is the productivity of the machines known? When they are turned on, are they used efficiently? Most manufacturers believe that the average utilisation rate of their machines is between 50%and 60%. However, after implementing solutions such as Industry 4.0 technology to track machine utilisation, the data shows the average utilisation is between 20 and 30%. This represents a significant opportunity to offset inflationary pressures and reduce operating costs.

The use of machines is one of the many advantages that monitoring them can have on a manufacturer's production and operational efficiency. Below are some of the broader benefits that machine monitoring software provides to manufacturers:

• Production plant visibility Identify the time an operator spends working, idle times, and stoppage reasons. Focus continuous improvement efforts on specific machines, cells, shifts, or jobs where the greatest results will be achieved. Unlock production capacity and improve productivity to do more with the same resources, thereby reducing overall operating costs. Discover more about the Benefits of monitoring downtime of industrial machinery and equipment.
• Reduces the risk of shifts, such as the night-time operation of machines, thanks to remote supervision. It reduces supply chain, commercial, and reputational risks.
• Accurate information: Discrepancies in run time are more easily resolved, as data replaces opinion, which also allows for more competitive pricing by making true time costs visible. An informed decision reduces prejudices and allows for process improvements that might otherwise not have been made.
• Improving communication Across the entire company, between the production floor and the upper floors: Alert production managers to threats to on-time delivery by giving them a real-time view of work in progress. Good communication leads to a more committed workforce and more efficient ways of working.
• Improving plant culture of production thanks to friendly competition, which also improves motivation around productivity targets by getting the production plant and the upper plant to agree. It increases employee morale, improves staff retention rates, hiring, and overall business success.
• Trends and evaluation Comparative downtime for predictive maintenance using offline ratios: Manage the present and optimise the future. Proactively reduce the risk of things going wrong. For this, the following are important Aspects to consider for implementing predictive maintenance strategies in industrial plants.