This RFID label is used on the ShelfAware platform to track inventory. (Photo courtesy ShelfAware)

Smart Manufacturing Experience speakers recommend manufacturers begin their Industry 4.0 journey immediately with small steps that offer a high likelihood of success

By Mark Langlois

“We’re eighth in the world in terms of industrial technology. That’s unacceptable. We should be number one and we should stay number one,” said Bob McWard, vice president of Raytheon Intelligence & Space (RI&S), Central Region Manufacturing, speaking at the Smart Manufacturing Experience conference in Pittsburgh in June.

McWard started his keynote speech at the conference by saying advances in smart manufacturing are being made by one- and two-person shops, such as the work Andrew Johnson is doing at ShelfAware, a Kansas City-based company at the conference with a vendor managed inventory product that oversees complex inventory chains. McWard heard Johnson speak at the conference about the vendor managed inventory (VMI) system Johnson and his family invented to help their father, Doug Johnson, manage the supply chain of O-Ring Sales and Service, his Kansas City firm. The family’s VMI system, created as ShelfAware, is now its own standalone company with its own customers.

Start the smart manufacturing journey with a small project. That’s the advice speaker after speaker gave at the 2022 Smart Manufacturing conference, backed by the Society of Mechanical Engineers (SME), the public/private educational partnership CESMII, the Association for Manufacturing Technology (AMT), and Advanced Manufacturing International (AMI), among others.

Pick the first digital step with care

The conference recognized that smart manufacturing, or Industry 4.0, is such a huge undertaking, the United States can’t digitize every machine, gather the data, and analyze it any day soon. That undertaking would cost billions of dollars, but nobody has the money. Attendees wanted guidance toward a good first step on the journey.

“I’d start small,” advised John Butler Jr., Ph.D., vice president of Arconic, a 125-year-old company that was originally called Alcoa. “You don’t want to boil the ocean. Spend some money. You need the discipline to pick the right project. You want payback for your smart manufacturing journey.”

Butler said Arconic (previously Alcoa) gathered data about its manufacturing processes for more than 40 years, and it analyzes that data to make its manufacturing processes more efficient. In many cases, it shares that data with customers to improve their relationship and the product quality.

As one example, when Arconic sends a roll of aluminum sheet to an auto manufacturer, it alerts the customer to where the customer may find an imperfection in the roll. The Arconic quality control cameras spot the possible imperfection, and software records its location on the roll. That information is passed to the customer. The customer is then alert and may remove that section from the roll, if necessary. Butler said that technology was too expensive to use company-wide 30 years ago, but today it is everywhere.

Smart Manufacturing has many definitions, but most definitions include the idea that modern manufacturing would improve if machines and other equipment could record and report digital data, as Arconic is doing in the above example. Manufacturers could analyze that data to improve quality and quantity of parts manufactured, to speed and reduce maintenance costs, and to reduce labor costs.

One goal is for the entire supply chain to be digitized from raw material suppliers and industrial distributors to customers. That data would give management the ability to oversee and monitor each process, receive its raw material on time, and deliver its parts to customers on time.

The problem with such a lofty goal, said Andrew Johnson, CEO of ShelfAware, in a telephone interview, is most suppliers and manufacturers have somewhere between 15 and 25 employees. They don’t have an IT department. They don’t have the time, staff, or money to embrace smart manufacturing company-wide. They can’t afford to attach sensors to old machines, and they can’t analyze the data those sensors provide.

Our customers are blue collar folks with dirty hands. They’re working out of pole barns in Kansas. I’m walking into places today that are using the same tools and lathes they were using 40 years ago. This is not a quick problem [to solve].”

Distributors, suppliers, and manufacturers working together

 ShelfAware’s business-to-business vendor managed inventory system offers manufacturers a small first step with a detailed look at their inventory and the inventory of their suppliers and customers, so a company can avoid stocking too much inventory on the one hand, and can avoid a “stock out,” on the other.

ShelfAware uses software and several pieces of hardware, including a small table-sized scanner and RFID tags on the inventory. The  scanner sits near the inventory. The inventory is bagged in appropriate quantities with an RFID tag identifying it. As people remove parts from inventory, they run the bags over the scanner, which subtracts them from inventory. To check the remaining inventory on the shelves, the RFID tags can be scanned with a second scanner during a walk-through. Each bag doesn’t have to be scanned individually for the inventory step. One customer of ShelfAware said his firm can scan its inventory once a month in five minutes, something that once took hours and, sometimes, days.

Before the ShelfAware digital system, a typical industrial distributor or supplier tracked its inventory and the usage of the inventory at its customer’s facility by sending a sales representative over several times a week or many times a month. That employee would count the inventory and report back. That is expensive and difficult to manage.

“In industrial distribution in the manufacturing world, whenever there is a stock out, it doesn’t really matter what the details are, the responsibility tends to fall on the supplier. If we can give them real-time visibility, you’re setting your supplier up for success by giving them a real-time look at your inventory consumption. It’s much more collaborative,” Johnson said. “You’re providing unprecedented levels of visibility and data in a real-time format that is visible, transparent, and accountable for everyone involved.”

Complex supply chains are common

“I’m a big fan of ShelfAware,” said Jason Lake, director of operations, Aster Brands, who described his inventory as being remarkably complex. The firm’s inventory includes tens of thousands of O-rings in different sizes, for use in pumps that carry a wide range of fluids. Each fluid requires distinct O-rings made from different materials. The inventory also requires nuts, bolts, and fasteners.

A pump that moves water requires one type of seal. A pump that moves hydraulic fluid requires a different seal made of a different material, and a pump that moves a fire-retardant material requires another O-ring.

“All this stuff can fit in the palm of your hand. That was difficult to manage physically,” Lake said. He has used ShelfAware at two different companies. “Did it lower our inventory? That was one benefit, but that wasn’t the main benefit. The benefit was less fire drills trying to find the seals we needed. It improved our throughput. We were able to manage our inventory more easily. We could manage customers better and manage that relationship because we knew what we had.”

Lake said the old system was costly, slow, and inaccurate.

“Our supplier would check our inventory in our manufacturing facility and bring us nuts and bolts every day. They were using all their time just keeping us in nuts and bolts,” he said. “We introduced them to ShelfAware. Now they know from the cloud what we need based on our mins and maxes, and they invoice us automatically. The timeliness is greatly improved. Now they can bring us stuff two times a week.”

Lake said that Aster Brands will expand its use of ShelfAware to include large pieces of steel used in making concrete forms.

“We’re in our infancy. We’re just getting started. In normal situations, you have to physically put eyes on each individual thing to count it. If you have a thousand in a box, with the radio frequency tag system, you scan it. We have two scanners, one for day-to-day inventory.

“At the end of the month, if we’re going to manage inventory, we use a different scanner, a hand-held scanner,” he continued. “It can read thousands of tags at 60 or 70 or 80 feet. You can take a walk through, and scan thousands of tags in five minutes. That’s radically different than going to each individual thing and counting it.”

Johnson said each company and each part is unique. Some companies have so few parts, they don’t need to use a digital system to keep track. Others might have hundreds and thousands of small parts that are bagged in quantities that seem appropriate. The parts the customer used most—those that are exhausted each week or several times a week—are bagged in larger quantities and are replenished most frequently. At the other end of the consumption range, parts that are used once a month or a couple of times a year are bagged in smaller quantities. They might be replenished once a month or less frequently. Keeping track of inventory to this level of detail lowers the cost of inventory because the quantities are more accurate. Why shelve 500 when you may only use six this year?

The same page means the same page right now

“What we’ve seen is customers and we have virtually real-time access to what is going on with the parts. We can look right now. We can look daily. I can call up and ask, ‘Hey Richard, these parts are on an uptick. Why is that?’ said Tim Roe, a manager at NIfast, a fastener distributer based in Kansas. Roe is a customer of ShelfAware, and he likes the system.

“Our customers want to know when their order will be fulfilled. They want integration,” Roe said. “Our customer wants visibility into our inventory directly. We’re super open about that. We have to be. I want them to trust us. I want them to see us.”

Roe said one challenge with the system is enforcing it on the shop floor. When a person takes a bag off a shelf, it must be scanned, and people need reminders. That might be signage, or it might be limiting access so anyone who takes a part must walk past the table scanner.

“It doesn’t take a long time. It’s literally slide it across the table and go,” Roe said. The sign might say, “If you go past this spot, scan here.”

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