Good, Bad & Ugly of Industry 4.0 Understanding what is possible with Industry 4.0, today, tomorrow and in the future

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1 Good, Bad & Ugly of Industry 4.0 Understanding what is possible with Industry 4.0, today, tomorrow and in the future Michele Sciuto Chief Commercial Officer ATS Global Headquarter Hofmanweg 5A, 2031 BH Haarlem, Netherlands ATS North America 1055 East South Boulevard Rochester Hills, MI 48307, USA

2 ATS Global Business ATS Canada ATS USA ATS Mexico ATS Netherlands ATS UK ATS Ireland ATS Belgium ATS Spain ATS Italy ATS Germany ATS Czech Republic ATS Austria ATS Macedonia ATS Turkey ATS India ATS China ATS Hong-Kong ATS Singapore ATS Indonesia 30 Years leadership in Smart Automation, Quality and IT Excellence Solutions Double digit growth year on year 900+ people (>75% Consultants + Technical) customers worldwide Selected by Gartner as Global MES/MOM consulting provider with system integration services ATS South Africa ATS Australia (2018 Gartner Market Guide for MES/MOM Implementation) Automation & IT MES / MOM PLM Quality Management Supply Chain Management Smart Manufacturing Industry 4.0

3 Agenda How do we see Industry 4.0? Good, Bad and Ugly of it Practical steps to implement an I4.0 strategy An outlook on the factory of near future

4 Value Industry 4.0: Strategy to Raise Maturity Digitalization Industry 4.0 How can an autonomous response be achieved? What will happen? Self-Optimizing What is happening? Being Prepared What happened Understanding Seeing Computerization Connectivity Visibility Transparency Predictive Capacity Adaptability FIR e. V. at RWTH Aachen University: Stages in the industrie 4.0 development path

5 The Good It is a Strategy, delivering strong financial benefit Triggers innovation and looking for new business opportunities Generate competition in the manufacturing market Industrial Standards are still very much valid (e.g. ISA-95, 88, 99)

6 The Bad A lot of Buzz-wording Technology for technology? What s the risk not to take that road?

7 The Ugly Business Case can be extremely challenging New Technologies are still under finalization Need to complete the digitalization phase first It is a long journey

8 Ad-Hoc Planning & Control Define the Ambition Standardized Processes Predictable Performance Continuous Improvement Excellence Need a Solid Strategy Technology People Structure Business Benefit Business Benefit Business Benefit Business Benefit Cyber Physical Systems Self-Organized Smart Factories Individualization of Mass Production Virtual to Physical World Internet of Services Processes New Business Models Strategy Raising the Maturity Level Industry 4.0 Digital transformation is about business transformation Most people overestimate what they can do in one year and underestimate what they can do in ten years.

9 Manufacturing Technology Landscape Enable collaboration among the different systems Break data silos Enable and foster innovation Effectively collect data from OT and IT systems Reduce Total Cost of Ownership

10 Bridging the IT/OT Gap Enable machine to machine and business to machine collaboration ERP Acquire all the relevant data to create digital product and process representations Digital Threads MES PLM Create a secure environment for data exchange Break data silos and unleash untapped potential Leverage on IT and OT investments already in place

11 Process Visibility Collect, Calculate and Visualize KPIs Use the ISO KPIs to find opportunities for improvement in manufacturing operations Process real time data stream to take decision when process or product deviations happen Make critical factory information accessible from anywhere and any devices Compare KPIs across multiple plants and find what make a certain plant successful Solution powered by Microsoft PowerBI Build and configure reports and dashboards to fit your business needs

12 Process Transparency and Prediction Explore asset performance data to learn the cause of failure Calculate asset health scores and predict life spans Provide optimized maintenance recommendations to technicians match existing defect image Solution and powered flag product by IBM Watson The Independent as defective Solution Provider for Smart Digital Transformation Reduce maintenance costs and improve asset health and performance

13 Dynamic Planning and Scheduling Import production orders from ERP and create the optimal detailed schedule for the plant Predict effects of change in production and react in real time to lack of resources Support major decisions of production capacity: extend workforce, resource capacity and factories match existing defect image and flag product The Independent as defective Solution Provider for Smart Digital Transformation Solution powered by Siemens Preactor

14 Production Management Dispatch the jobs to the right work centers Show electronic work instructions to operators Deliver part programs and recipes to shop-floor machines If any, plug your MES system into the ecosystem

15 Quality Management ATS CM4D - Dimensional Quality (Discrete Manufacturing) Validate accuracy of supplied parts Create the Digital Twin and compare product to Original Design Predict Assembly Problems and avoid production issues

16 Quality Management ATS Inspect, Visual Quality for Discrete Manufacturing Eliminate Paper Checklists Create a dynamic inspection process with the support of 3D models Improve Right First Time KPI and Prevent Defective Products from Leaving the Plant Minimize Costs of Rework and Scrap

17 Quality Management Cognitive Visual Quality for the Discrete Manufacturing Images captured Real-time monitoring Employ cognitive and human expertise to attain the highest confidence levels of defect detection Increase consistency of defect detection and classification Machine Learning system Reduce Inspection cost and time while improving throughput Defects compared Store Match existing defect image and flag product as defective Solution powered by IBM Watson

18 LIMS Laboratory Management for the Process Industry Improved lab efficiency through reduced administration, errors, scrap and rework Automatic data capture and centralized data consolidation for fast and easy quality data retrieval and reporting Full traceability of quality data resulting in improved regulatory compliance Improved lab efficiency through reduced administration, errors, scrap and rework

19 Realize the Factory of the Future Process Visibility Planning and Scheduling Quality Management Cognitive Quality Laboratory Management Predictive Maintenance Manage Production

20 What to do then? Create a step-by-step business case reflected in your Digital Roadmap and focus on gradual measurable improvements Leverage on IT and OT investments already in place Complete the digitalization phase first, the 4 th Industrial Revolution can only come later Start as soon as possible, it will be a long learning journey

21 Value Industry 4.0 Let s start the journey Digitalization Industry 4.0 How can an autonomous response be achieved? What will happen? Self-Optimizing What is happening? Being Prepared What happened Understanding Seeing Computerization Connectivity Visibility Transparency Predictive Capacity Adaptability FIR e. V. at RWTH Aachen University: Stages in the industrie 4.0 development path

22 Thank You Michele Sciuto ATS Global CCO mobile: michele.sciuto@ats-global.com ATS Global Headquarters A. Hofmanweg 5a, 2031 BH Haarlem, The Netherlands ATS North America 1055 East South Boulevard Rochester Hills, MI 48307, USA

23 Thank You Michele Sciuto CCO Discover more ATS Global B.V. A. Hofmanweg 5a NL-2031 BH Haarlem mobile: michele.sciuto@ats-global.com

24 ATS Maturity Pathfinder You Traditional Bronze Silver Gold Maturity Model Inherited local operational rules base on local key performance metrics Low Efficiencies Plant Scheduled Weekly Paper Based Solution Manual Reliance Push Philosophy Firefighting Mentality Making the hidden factory visible to enable informative decisions Electronic Visual Work Inspection Instructions WIP Tracking Production Scheduling Standard Accurate Reporting Manual Data Capture / OEE Taking control of manufacturing through standardisation Quality Management Order Management Machine Connectivity Auto Data Capture / OEE Changeover Management Resource Compliance World class flexible and responsive manufacturing operations Inventory Product Management Lifecycle Management Industry 4.0 Advanced Production Scheduling Supply Chain Management Predictive Maintenance Us Reactive... Monitor... Control... Vision...

25 Graphics from GKN presentation

26 Agenda What is Industry 4.0 about? It is financial benefit / new business models Industry 4.0 VS digitalization Good It is a Strategy It delivers Financial Benefit Triggers innovation and looking for new business opportunities Generate competition Industrial Standards are still valid (ISA-95) Bad: Buzz Wording and confusions (Gartner hype Technology for technology What s the risk not to take that road? Ugly: Business Case extremely challenging New Technologies still under finalization Need to complete the digitalization phase first It is a long journey How do we approach it? Need a strategy (VP slide) IT/OT convergence (Factory of Future) Next opportunities (Factory of the future) Food and Beverage and Pharma (Recipe Management and LIMS) SODA (innovation) 4:10 PM - 4:45 PM - Solution Spotlights Future Technologies & IoT Good, Bad & Ugly of Industry 4.0 Understanding what is possible with Industry 4.0, today, tomorrow and in the future Michele Sciuto, Chief Commercial Officer, ATS Global

27 How do we approach it? Need a strategy (VP slide) IT/OT convergence (Factory of Future) Next opportunities (Factory of the future) Food and Beverage and Pharma (Recipe Management and LIMS) SODA (innovation) 3 Waves Process (???) 1. Strategy 2. Raise Maturity Level with gradual Benefit Realization 3. Implementations???

28 Success Stories

29 Automotive OEM Automated Self Correction Process Problem Need perfect robotic welding and painting processes with an automated self correction process The Solution ATS ADOS Capture all the data generated, no matter the type or source Automated validation for the quality of welding and painting processes Enable manufacturing traceability for each component and validate vehicle variants at every gate Checklist Points Automated Decision Business Case 2% improvement in overall quality of robotic operations 10% reduction in scrap rate due end-to-end traceability and root cause analysis OK NG

30 Automotive OEM Improve Product Quality and Reduce Warranty Claims Sites: 10 Countries: 5 Inspection Points: 100+ Benefit: Quality Improvement Savings: Millions Problem A carmaker knew that not all the defects found in the quality inspections made it to the reports due to lost paper sheets and informal communication. They wanted to go paperless, provide KPI reporting to the plant floor and send real-time alarms for critical issues to the production supervisors for immediate containment to increase their FTR%. Real-Time Analysis The Solution ATS Inspect Business Case Number of defects decreased 84% in 18 months at constant volume. Paper removed from the plant Inspection Points Rework Points Ship / No Ship Decision

31 Quality defects behaviour

32 Leading Aerospace OEM chooses ATS Global for Integrated Production Tracking and Order Handling Problem Easily integrate IT and OT layer Send work order information between machines on shop floor and MES platform. Track location of each part on the production line. Collect all data through the production process The Solution ATS Bus Representative image Business Case Full process visibility and product traceability thanks to data contextualization All data are securely transferred Low TCO and ability to easily extend the architecture with new IT and OT components

33 ATS Integrates Advanced Planning & Scheduling System at a Turbine Blade Manufacturer in the UK Problem Simplified, system driven, Planning & Scheduling process Ability to present various short-term schedule scenarios to the planning team(s) Obtain medium-term forecasts to support internal forecasting requirements The Solution APS integrated in the application landscape Business Case 25% reduction in customer complaints relating to deliveries. >5% yield improvement through optimised scheduling 10% increase in on-time deliveries Improved Forecasting Ability that enabled scenario planning

34 Back Up

35 Electrical Vehicles OEM Problem Ensure production is in sequence, track vehicles and improve efficiency The Solution ATS Ignition Solution RFID tags are read at each work station and compared to the body sequence queue for vehicle tracking and process instructions Vehicle body spec are communicated to the offline work cell operators, PLC, and robots thus insuring the offline production is in sequence to the main line. Andon control: warnings or line stops are triggered if there is a quality problem (Pokayoke points). Automated conveyor is controlled based on the production schedule OEE is calculated and displayed along the full assembly process Business Case Zero mistakes on production sequence, every vehicle is built according to the specs with no quality issues, world class OEE

36 Leading Car Manufacturer chooses ATS Global to improve Quality Assurance and Traceability Problem Process innovation and built in quality with end-to-end traceability Mind-set shift, introducing excellent process with robust gatekeeper and zero outflow management The Solution ATS ADOS (phase-wise rollout approach) Phase 1 Trim & Chassis and Vehicle Quality Assurance (VQA) Using ATS Inspect and ATS Bus Phase 2 to encompass all earlier manufacturing processes Phase 3 to encompass all variable production data stored within ATS CM4D Business Case Unified European QMS Major advances in data availability and process reporting Reduction in re-work and production errors due to end-to-end traceability 8 Global plants where solution is being used

37 Ad-Hoc Planning & Control Define the Ambition Standardized Processes Predictable Performance Continuous Improvement Excellence The Digitalization Process Technology People Structure Business Benefit Business Benefit Business Benefit Business Benefit Cyber Physical Systems Self-Organized Smart Factories Individualization of Mass Production Virtual to Physical World Internet of Services Processes New Business Models Strategy Raising the Maturity Level Industry 4.0 Digital transformation is about business transformation Most people overestimate what they can do in one year and underestimate what they can do in ten years. The Independent The Independent Solution Solution Provider Provider for Smart for Smart Digital Transformation

38 Step-by-Step Process to Manufacturing Excellence WP1 Awareness and Strategy SUCCESSFULL A successfully proven process developed by ATS in delivering Manufacturing IT and OT solutions to customers WP2 Business Assessment STANDARD Based on the ISA-95 standard model WP3 Business Case WP4 Selection and Specification DEFINED It comes with a defined set of deliverables WP5 Implementation and Integration WP6 Support Packages EXPERIENCED It incorporates lessons learnt and best practices gained from ATS and other implementations WP7 Benefits Realization and Consulting FLEXIBLE It provides a guideline in implementing Manufacturing IT and OT solutions but it can be tailored to our customer needs

39 Receiving Area Trace delivery of external suppliers Quality of supplied parts On Time parts delivery Minimize Inventory Level

40 Fabrication Area Improve efficiency and equipment availability Optimize production schedule and allocation of resources Dispatch the right job to the right work center at the right time Ensure visibility of work in Progress (WIP) Ensure quality of produced parts

41 Painting Area Minimize setup and change over times Ensure quality of painted part Minimize consumption of utilities

42 Assembly Area Support customizations (MTO/CTO/ETO) Timely dispatch EWIs and recipes to the line Trace direct and indirect material consumption Synchronize sub-assemblies with the main line Be ready for quality audits

43 Shipping Area Deliver a perfect product on time Minimize inventory of finished goods Feedback to engineering any need of business improvement

44 Quality Management ATS CM4D - Dimensional Quality Validate accuracy of supplied parts Create the Digital Twin and compare product to Original Design Predict Assembly Problems and avoid production issues

45 The Good