We recently presented a Webinar on “Taking Advantage of US Tariffs” which leverages Smart Manufacturing practices. In North America, we call it Smart Manufacturing which you know as Industry 4.0 in the EU or Made in China 2025 in China. The purpose of the webinar was to make manufacturers aware of the incredible opportunity that they have, to use these tariffs as a trigger to launch or improve their own operational efficiency initiatives.

Smart Manufacturing

Our presentation (see the link to the recorded presentation below) can be “boiled down” to the following:

Tariff Outcomes can be positive and negative

Tariff Outcomes are going to be both positive and negative. Some manufacturers will see the outcomes immediately while suppliers and consumers might see the outcome over time. It depends on their position in the supply chain and the ability to adapt to changing conditions.

For example, considering steel and aluminium tariffs, a domestic steel manufacturer might see outcomes as an increased demand which leads to added jobs and bringing “retired” assets on the production floor back to life. A supplier might look at these outcomes as a price increase in raw materials and the need to pass along that cost to the retailer. The retailer, in turn, might pass along the added cost to the consumer in the form of a higher price. If they are in a competitive market, they might elect to absorb some of that higher cost for the sake of profits.

The point is that each of these business entities has decisions to make and they must ensure that their operations are efficient so they can adapt easily in response to these outcomes.

It’s an Opportunity in disguise

It is very important for manufacturers to be ready for all potential outcomes. As production and demand at the raw material level increases, so will the demand for higher service levels from suppliers and customers. Manufacturers need to focus on delivering on the following challenges that customers will demand even more of in response to price increases.

  • Higher quality
  • On time delivery
  • Customer satisfaction

Manufacturers that can deliver on these challenges without expending a great deal of effort, will become stronger and more competitive. The key is to be prepared.

Smart Manufacturing is the “enabler”

Manufacturers should consider embracing Smart Manufacturing. Smart Manufacturing enables information across the entire supply chain, makes it available on demand and in real time, whenever needed. It gives us transparency & insights into our business. This is done through a combination of Analytics, IOT solutions, AI & AR which is the core of solutions provided. Smart Manufacturing will enable manufacturers to:

  • Create real-time operations visibility to eliminate inefficient production runs as orders increase
  • Leverage predictive maintenance solutions on production floor assets to eliminate lengthy downtimes
  • Create notifications and alerts that are triggered by changes in device connectivity within the factory

Start smart/Start safe

To start with, we advise our customers & prospects that the best way to start your Smart Manufacturing journey is to identify and adopt a use case that solves a common problem and is mature. This will lead to a quick ROI.

One such use case is Predictive Maintenance

Today, many manufacturers adopt & deploy a “reactive” maintenance strategy instead of adopting predictive maintenance. Predictive maintenance is important if manufacturers want to avoid unplanned production downtime and potentially huge revenue losses.

By analyzing real time data stored in production floor assets, maintenance teams can determine and calculate the risk posed when an event is detected like a predetermined threshold that is exceeded or a sensor on a specific part indicates imminent failure. By being made aware of the event, a proper proactive action is taken and potential unplanned downtime avoided by taking the asset down at an appropriate time with little or no effect on production.

Global markets are confusing enough in this day and age but if companies that feel the effects of tariffs are prepared with initiatives like Smart Manufacturing to help them react with little or no negative fiscal impact, this can turn into an incredible opportunity for growth.

You can check out our webinar video

Please contact us if you are interested in evaluating a Smart Manufacturing journey for your company and we’ll provide you with a roadmap to success.