Industry executives and experts share their predictions for 2023. Read them in this 15th annual VMblog.com series exclusive.
5G and the Transformed Manufacturing Plant
By Tom Roberts, Vice President, Global Customer Success Management, QAD
Of the many technologies arriving at manufacturing’s doorstep today, the one most likely to be overlooked for its value is 5G. For the automotive industry, 5G has the possibility of freeing the industry from some of the capital intensive reality that it faces, expanding the usage of data for root cause analysis, and driving better decision making. Unfortunately, many companies will be late in adoption as they are distracted by other events in the supply chain, and will lose a prime opportunity to cut capital investment and run-at-rate cost.
If one envisions the typical automotive manufacturing environment today, it would look like the following: Imagine miles of ethernet cable attached to routers, switches, and servers in the IT room, moving out through the walls and ceilings to manufacturing lines and office areas. Sure, there are some IT managers or companies that may have convinced their leadership to invest in WiFi components, like wireless routers and access points for offices, conference room areas, and scanning equipment, but the heavy lifting of a manufacturing plant still relies on good old fashioned CAT cable and a lot of hardware.
With the advancement of digital wireless technology to 5G however, as data speeds increase to 1-10GB per second, the need for all of those physical pieces of gear will subside.
What we are seeing now, with the convergence of cloud delivered Software as a Service (SaaS), Software Defined Networks (SDN), and 5G, is that the days of massive capital technology investment may be passing by. If software is served through the cloud, through SDN, broadcast into the plant from towers sitting outside of the automotive manufacturing plant, and received directly by the specific user devices and machines, then it may eventually eliminate the need for physical network gear, routers, switches, ethernet cable, and most notably, the entire IT room. The expense of those rooms can be enormous, with racks, servers, cabling, additional power requirements, HVAC requirements, raised floors, fire suppression systems, and additional FTEs to monitor and run that equipment. Under the converging technologies that I mentioned above, the day will come when all of those things may be able to be avoided.
For the consumer market, advancements in wireless technologies enable us to receive real-time, actionable information to make better decisions – whether that’s through monitoring our home’s security, HVAC system, or knowing our refrigerator contents while we’re away at the grocery store. This is precisely what we are seeing in manufacturing. In a story reported by CNN, a study conducted by Ericsson and Fraunhofer Institute for Production Technology in Germany provided a real world business example of this. The results indicated that there was a high rate of error in the manufacturing process of making metal bladed discs for jet engines, resulting in 25% of the blades having to be reworked. By placing sensors that use 5G directly on the tools, they were able to “detect faults in real time, and reduce the error rate to just 15%.” This improvement reduced the average production cost of a blade by more than $4,000. The system was able to detect this due to nearly zero latency in the 5G technology. With 5G technology, there is not only a significant reduction of capital investment within manufacturing facilities, there is also the capability to drive EBIT, by lowering the Cost Of Quality (COQ), enabled by increased capability in data flow in the organization.
Automotive OEMs are even developing their own in-house 5G systems to take advantage of the technology and assure bandwidth. Volkswagen’s Production and Logistics Chief, Christian Vollmer, advised the following, as reported by just-auto.com. “In implementing our Accelerate strategy we are working at full speed to transform our sites into smart factories. Our goal is to continuously optimise our production and make it even more efficient and flexible. We believe that 5G technology has great potential for innovation, from the use of intelligent robots and driverless transportation systems to networked control of plant and machinery in real time up to wireless software flashing of manufactured vehicles.”
As companies are considering the construction of new plants to serve the electric vehicle industry, and all of the supporting components, there should be a strategic vision created by the C-Suite to account for the technologies and capitalize on them. An IT room in a manufacturing plant is a sunk cost; leased servers and other hardware that one doesn’t need are a drag on operating cost, and purchased equipment races toward obsolescence the minute it is installed. Innovative automotive manufacturers that look ahead may find a technology that drives profitability and flexibility in their organization, through the exploration of 5G.
##
ABOUT THE AUTHOR
Tom Roberts is QAD’s Vice President, Global Customer Success Management. Tom joined QAD in 2018 after almost three years as Vice President & Chief Information Officer at Yanfeng Automotive Interiors. His more than two decade-career in information technology includes answering help desk calls for EDS, consulting for Accenture, and enabling Manufacturing, Procurement, and Shared Services Operations for Johnson Controls. He holds a Bachelor’s Degree from Southern Adventist University. He has held certifications in both ITIL v3 and as a Certified Business Analysis Professional (CBAP).
