Nearshore Americas

Industry 4.0-as-a-service: BPO Solutions in the Age of Digital Manufacturing

The dawn of Industry 4.0, or the fourth industrial revolution, has come about through advanced manufacturing, which involves automation, simulated environments, data exchange between interoperable systems, and autonomous local decision making. Digital manufacturing is a key element of Industry 4.0, as it presents the ability to create a virtual copy of the physical world for simulation.
According to a recent study by PwC, which surveyed 235 industrial firms in Germany, Industry 4.0 is the top area of investment. The average spend annually is estimated to be 3.5% of the revenue, totaling €140 billion per year in Europe by 2020. This priority level is similar in other developed economies. But according to a recent BCG report, the primary challenge in this journey is the lack of qualified employees, followed by data security and investment.
There are multiple technologies involved in the Industry 4.0 implementation journey. Firstly, Internet of Things (IoT) enables machines used on the shop floor to share real time data and builds a closed loop, representing a paradigm shift from the traditional technique of acting on past data. Secondly, affordable computation and advanced software is enabling the creation of “digital twins”, not just for products, but also for factories, equipment, and even human operators of machinery. A digital twin is a virtual representation of elements in a factory, enabling the simulation of operations without any physical setup. Finally, machine learning as part of Artificial Intelligence, can find patterns in vast amounts of structured and unstructured data; learn from it, and then make informed decisions when faced with new situations.
With all of these aspects of Industry 4.0, information technology is the common thread that cuts across the enterprise – seamlessly connecting products, processes, people, and assets.

So how do IT /BPO service providers fit in?

IT/BPO service providers have traditionally been seen as drivers of efficiency and effectiveness. The vast majority of business processes outsourced to nearshore or offshore locations have typically been back office operations including engineering services.  Engineering support offered by BPO players has now extended beyond the traditional areas to digital manufacturing.
New technology in core manufacturing has been witnessed on the shop floor with better performing products and the advanced processes used to make them – from numerically controlled machine tools, automated material handling equipment and robots to their associated information flow. This was not the typical back office work. But digital manufacturing supported by affordable computing, infrastructure and BPO players skilled in this domain has extended this critical function to back offices.
Digital manufacturing is an integrated approach to manufacturing that places computers at the center of operations. This trend has been happening in pockets before, with enterprise IT systems such as ERP and PLM for planning and management, CAD software for product design and programmable CNC machines on the shop floor. But today, the BPO industry supports digital manufacturing by seamlessly integrating the above systems with 3D visualization, simulation, and analytics-based decision making in a collaborative fashion for the entire plant operations. This provides the capabilities to manage multiple global factories from one central location.
There are multiple benefits to digital manufacturing, including productivity and cost savings (driven by optimized operations) improved quality of products and services, safety, and an increase in the velocity of informed fact-based decision making.

Manufacturing Engineering Services

The ongoing day-to-day activities required by Industry 4.0 to accomplish digital manufacturing are referred to as Manufacturing Engineering Services (MES). This approach is used to create a digital mock-up of all the activities that happen on the shop floor, from a product’s design to its shipment out of the factory gates.
With MES, 3D models of products, machine tools, material handling equipment, assembly lines, and humans are created. They are then animated to simulate the execution of operations as close to real life as possible. Through this approach, safety can be proactively ensured by looking for collisions and near-misses for an ergonomically safe man-machine interaction. Key manufacturing parameters such as yield, quality, and productivity can be estimated before any equipment is switched on. Simulations such as these help to reduce errors and wrong decisions in actual manufacturing before the shift starts, and the assembly layout and day-to-day operations can be optimized to save cost.

Simulating Product Realization in the Life Cycle

The overall life cycle of a product can be broadly split into three phases: product creation, product realization, and product sustenance. Product creation is carried out by the engineering department where new products or enhancements are designed. Product sustenance takes care of post-shipment services, maintenance and the aftermarket phase. Product realization is the conversion of a design into a physical product using manufacturing processes.
MES digitizes the spectrum of activities that happen in the product realization phase before the actual manufacturing happens. This means that several “what-if” scenarios can be tested to ensure the operation is as smooth as possible.
The following chart shows specific activities under product realization. The list is not exhaustive and can vary from industry to industry, but also depends on a specific firm’s internal processes. Commercially available software is used for each of these activities, resulting in minimal coding and only a small amount of configuration and customization is required, based on the need.mes-benefits
The Key Benefits of MES

Implementing MES will provide manufacturing companies with significant benefits.

  • Productivity – The layout of factories and material flow routings can be optimized by identifying and removing bottlenecks. Human and machine movement will be minimized through time & motion studies leading to cycle time reduction, improved machine utilization and productivity. An improvement of 15-25% operational efficiency can be realized post Industry 4.0 implementation.
  • Cost savings – Proactive measures can be taken for optimized usage of resources from energy to materials, consumables and human effort leading to cost savings. According to BCG, improvement in conversion cost excluding the cost of material will be in the 15-25% range varying by industry type.
  • Quality Assurance – MES will improve the first-time-right ratio for new setups, tooling and operations by performing a simulated dry run before the real implementation. A 10-20% decrease in costs due to sub-optimal quality can be achieved. Predictive maintenance decreases machine down time typically by 30-50%, improves machine life by 20-40%, and reduces maintenance cost by 10-40%.
  • Informed decision making with information transparency – Analytics based insights with visualization backed by real-time status updates, if available, will lead to fact-based decision making. Audit-readiness can improve with backed- up historical information. Costly mistakes in long-term decisions such as a green field plant or major changes to existing layouts can be avoided by carrying out a simulation before the actual implementation. According to PwC’s Industry 4.0 study, 83% of companies globally expect data to have a significant impact on decision making in five years, which is a sizable growth from the current levels of 50%.
  • Employee Health & Safety – MES supports organizations to proactively implement ergonomically safe environments in the factory. This will lead to a reduction in unsafe hazardous situations, near misses, risks, collisions, and up to a 90% reduction in fatalities. Faster response times can be achieved during emergencies.

Applying MES as a BPO Service

MES for Industry 4.0 can be offered as an outsourced activity from offshore or nearshore delivery centers. Depending on the volume of activity, a dedicated team in a traditional time and material-based model can be set up. A shared service offering can also be designed for catering to multiple customers from a similar industry. The initial set-up of factory digital mock-ups can be completed as a one-time activity, and partnerships with software vendors can ensure that the latest available modules and features are leveraged. If available, IoT will make the shop-floor closed-loop to provide real-time status updates and make the implementation more impactful. Furthermore, gain share models based on business outcomes can also be put in place to go beyond SLAs and basic metrics.
Infosys BPO has been offering MES for a global farm equipment OEM out of one of its offshore delivery centers for the past seven years. The scope of work covers 30 niche sub-competencies across pre-production planning, digitized execution of assembly, machining, tool design, fabrication, and welding operations. The engagement is driven by metrics-based execution, achieving economies of scale for cost efficiencies, performing standardized, repeatable work packages, and achieving 15% year-over-year productivity, with continuous improvement initiatives.
Industry 4.0 services like MES have the power to completely evolve the process of engineering and production, thrusting the engineering world into the new age of digital manufacturing. And with BPO companies like Infosys now offering Industry 4.0-as-a-service, the outsourcing industry is primed to become an indispensable part of the future of manufacturing.

Sign up for our Nearshore Americas newsletter:

Infosys Limited

Infosys Limited is an Indian multinational corporation that provides business consulting, information technology and outsourcing services. It is headquartered in Bangalore, Karnataka.

Add comment