Kirby Risk Summer 2022_Digital

INDUSTRIAL

INDUSTRIAL

complications when it comes to supply and demand forecasting. With an unreliable and sporadic supply chain, constant material shortages and increased prices have directly impacted a company’s ability to predict and plan. AI plays a significant role in improving accuracy of demand forecasting by anticipating changes in demand and identifying emerging patterns. McKinsey Digital reports that, “AI-based approaches to forecasting are expected to reduce forecasting errors by 30 to 50% in some settings… Costs related to transport and warehousing and supply chain administration are expected to decrease by 5 to 10% and 25 to 40%, respectively.” 3 Protected Profit Margins High rates of inflation and supply chain shortages not only impact a company’s ability to forecast, but it also takes a toll on company profits. During these tough economic times, protecting company profit margins is extremely vital. A study conducted by Boston Consulting Group shows that companies utilizing AI are more likely to thrive during crisis. BCG also reported that nearly 14% of those companies were actually able to increase both sales growth and profit margins. 4 Improved Quality Traditionally, quality inspections had a high-level of human involvement and product deviations often went undetected. These product defects have led to recalls and unnecessary waste and they reflect poorly on a company’s reliability. By integrating AI into manufacturing machinery, this autonomous technology examines products, identifies potentially defective parts and removes them from the line. AI effectively prevents flawed products from reaching customers, improving overall product quality and reliability. 5 Predictive Maintenance AI enables a manufacturing facility to move from preventative maintenance to predicative maintenance. Rockwell Automation characterizes preventative maintenance as a routine and scheduled action that is based off historical data, whether a machine requires it or not. This requires an extensive inventory for replacement components, increased planned downtime and addresses problems that may not even

exist. Predictive maintenance occurs as needed and is based on real-time operational data collected by a machine’s AI. This identifies potential machine issues early on, reduces planned downtime and improves inventory efficiency. Incorporating AI allows facilities to move to predictive maintenance, improving maintenance approach and strategy.

AI AND DIGITAL TRANSFORMATION

Compared to similar industries, manufacturing has had a low adoption rate of new digital technology, like AI, and minimal transformation endeavors. However, innovative manufacturing company, DENSO Robotics, has been leading the way in the industry with their integration of AI-based technology and increasing digital transformation efforts. Since implementation, DENSO has seen a significant increase in production efficiency, eliminated bottlenecks and improved processes. Vice President of DENSO North American Production and Innovation Center, Raja Shembekar comments, “The potential we now see to achieve significant process gains while simultaneously helping our workforce add greater value is precisely why DENSO is so committed to exploring and implementing innovation.” Rockwell Automation and Power to Create (PTC) have partnered together to provide a company with the ability to accelerate an operation’s digital transformation, improve efficiency and ensure future sustainability. PTC describes this collaboration as, “Joint expertise, technology, and resources to simplify your industrial transformation and innovate with greater agility.” Manufacturers that integrate new digital solutions and transformation reach maximum efficiency, accurately forecast demand, protect company profits, improve product quality and have predictive maintenance. The implementation of AI technologies is necessary for the future of manufacturing.

ARTIFICIAL INTELLIGENCE SHAPING THE WORLD OF MANUFACTURING Artificial Intelligence (AI) plays a critical role in the future vitality of the manufacturing industry. Artificial Intelligence, or AI, was first introduced to the manufacturing industry in the late 1960s. The implementation of the first mass-produced industrial robot arm joined the assembly line at General Motors, lifting hot pieces of metal and placing them in cooling liquid, according to PwC.

AI has since grown to incredible technological heights, from the complete automation of production lines to robots self-producing and testing themselves. Utilizing AI has proven economical, with productivity and efficiency benefits unmatched by any other technology. Even with unlimited positive outcomes, manufacturing companies’ implementation and migration to AI is shockingly minimal. A study conducted by PwC shows that of 1,155 manufacturing executives across 26 countries, only 9 percent have implemented AI in their processes to improve operational decision-making. The vitality and sustainability of manufacturing companies rely on adapting to new technology. With its unlimited benefits, here are five prominent ways that AI has transformed the manufacturing industry:

1 Self-Optimization ScienceDirect defines self-optimization as a production line’s ability to adapt to complex situations and unforeseen disturbances within supply chains, machines and processes without being prompted. Automatic adjustments to production lines are determined by gathering data on production, inventory and operating rates. For example, an operation is facing a significant decrease in demand — a self-optimized production line has already gathered this data, reduced product quantity and eliminated unnecessary production. 2 Accurate Forecasting Manufacturing companies have recently faced major

In a world of constant technological advancements, don’t get left behind. Connect with Kirby Risk to learn how you can stay at the forefront of your industry.

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