Bridges vol. 42, December 2014 / Feature
By Dr. Friedrich Bleicher
The economy of Austria is widely based on small and medium-sized industrial business and manufacturing companies. These companies contribute significantly to Austria’s employment and wealth by creating innovative products, high-end technology, and interdisciplinary process improvements. While the relevance of production in highly developed industrial nations – not only those in Europe – has significantly decreased, Austria’s production economy has remained in a solid and reliable position. Based on the Gross Domestic Product over the last decade, Austria has been able to keep the fluctuation between 19 and 21 percent, while other previously strong industrial nations like France and Great Britain, as well as the European average, have underperformed. Due to the globalization of markets, the need for innovative products and resource-efficient manufacturing processes increases constantly. Nowadays the energy costs must be counted as an important factor in the overall manufacturing cost structure. The following figure depicts the situation of the 25 most important exporting countries.
Figure 1: Manufacturing costs of the 25 top export-oriented nations, Boston Consulting Group
Current trends indicate that the decline of production will slow down and, in some regions, finally reverse. Austrian companies have enabled those developments, thanks to their ability to react to changing market environments and to create innovative and unique selling propositions. While these companies have operated extremely successfully in past decades, changing global market trends and increased competition, especially from Asia, are forcing companies to manufacture customer-specific products and to continually reduce lead times. As industrial production becomes even more complex and dynamic, companies will have to focus on the challenging goal of producing customer-oriented, high-performance products at the same cost as today in order to satisfy tomorrow’s market needs: high-mix/low-volume manufacturing. As a result, interdisciplinary optimization of innovative product design, new technologies, equipment, organization, production management, and employee know-how must be understood, improved, and expedited for successful operation in the future.
The purpose of future production systems is to provide intelligent resources that enable and support decentralized, reaction-driven, and flexible production systems. This can only be realized if the available and sensor-aided information is collected and analyzed, the situational local feedback loop is utilized, and alternative decision options are ensured through using virtual models of physical reality. Those elements create a new, interactive, situational relationship and cooperation between human beings and machines – a vision that is summarized by the terminology of Industry 4.0.
Fig. 2: The paradigm change in manufacturing.
The first three industrial revolutions came about as a result of mechanization, electricity, and IT. Now, the introduction of the Internet of Things and Services into the manufacturing environment is ushering in a fourth industrial revolution. In the future, businesses will establish global networks that incorporate their machinery, warehousing systems, and production facilities in the shape of Cyber-Physical Systems (CPS). In the manufacturing environment, these Cyber-Physical Systems comprise smart machines, storage systems, and production facilities capable of autonomously exchanging information, triggering actions, and controlling each other independently. These systems facilitate fundamental improvements in the industrial processes involved in manufacturing, engineering, material usage, and supply-chain and life cycle management. The smart factories already beginning to appear employ a completely new approach to production.
Smart products are uniquely identifiable, may be located at all times, and know their own history, current status, and alternative routes to achieving their target state. The embedded manufacturing systems are vertically networked with business processes within factories and enterprises, and horizontally connected to dispersed-value networks that can be managed in real time – from the moment an order is placed right through to outbound logistics. In addition, the systems enable and require end-to-end engineering across the entire value chain. Smart factories can meet individual customer requirements and allow even one of any item to be manufactured profitably. Smart assistance systems release workers from having to perform routine tasks, enabling them to focus on creative, value-added activities. In view of the impending shortage of skilled workers, this will allow older workers to extend their working lives and remain productive for longer.
Global competition in the production-engineering sector is becoming fiercer and fiercer, and Austria is not the only country to recognize the trend toward deploying the Internet of Things and Services in the manufacturing industry. “Industry 4.0” is a comprehensive term for already available IT technology that represents a suitable approach to supporting production systems in their transformation into a flexible, connectable, instantaneous, decentralized, independent Cyber-Physical-Production-System (CPPS). CPPS are defined as production systems containing a significantly high number of implemented and embedded software, sensors, and actuators for the purpose of collecting, analyzing, and saving information of the whole system. The collected information is shared by the CPPS elements through standardized communication interfaces. Thus, due to connectivity between the different CPPS elements, the availability of information increases globally and allows several employees and services to make further use of their knowledge. As a result, CPPS not only provide important information for production systems but also enable innovative interactions between humans and machines. The ability to compile the required information and communication technologies, related tools, and support systems is widely available today. Hence, a new paradigm consisting of highly sophisticated, plug-and-play-capable machines, intelligent IT systems, as well as highly skilled employees, is going to be established and will lead to a continuously changing and fully connected working environment.
Today, companies and their production systems face challenging issues including a complexity derived from a high variation of products combined with reduced lot sizes. Those high-mix/low-volume environments represent a very difficult and challenging situation for production companies. Established production systems are predominantly shaped by derivations from the original Toyota Production System (TPS). The disadvantage of those high-mix/low-volume environments is that not all of the proposed high-volume-oriented elements are applicable and transferable in the newly oriented industrial concepts. When using a typical TPS in a high-mix/low-volume environment, small and medium-sized companies encounter problems, as they typically deal with small lot sizes and fluctuating customer demands.
As shown in Figure 3, fewer than 99.7 percent of all Austrian companies can be categorized as a small or medium-sized company. They employ 67.1 percent of all personnel and are responsible for 61.4 percent of total value added in the economy.
Fig. 3: Number of small- and mid-sized companies (%) based on employment and value-adding operations
In today’s practice, the requirements of a high-mix/low-volume environment and the advantages of proposed Industry 4.0 solutions are not fully aligned. Small and medium-sized companies are confronted with the challenge of small lot sizes, different product lines, and low budgets for automation investments.
By developing flexible, consumer-oriented production systems, and through the integration of already available, innovative information and communication technologies (Industry 4.0), the gap experienced in today’s Austrian economy can be filled and combined with highly productive manufacturing processes, appropriate machining, and automation technologies. Therefore, the management of described technological challenges in a high-mix/low-volume environment can be considered the core competency for Austrian production companies.
In order to support small and medium-sized companies and their different strategies for preserving and increasing productivity in today’s production systems, research and development in the field of advanced manufacturing systems can be regarded as highly reasonable. By the support of the Marshall Plan Foundation, an endowed professorship dedicated to the research field of production engineering and advanced manufacturing systems will be established at the Institute of Production Engineering and Laser technology (IFT) at the Vienna University of Technology. The research will be based on the central scientific question: How should a future production system for small and medium-sized companies be designed? Based on the research capabilities already available at the IFT, an Austrian Center for Advanced Manufacturing Systems (ACAMS) will be developed and established at the Vienna University of Technology (TUV). ACAMS is an interdisciplinary operating network of companies and researchers with the competence and aims to optimize manufacturing for the highest adaptability in high-mix/low-volume-driven production environments. Usable elements from TPS will be transferred to a usable environment in a demonstration factory and extended by required methods, as well as by tools and systems, to provide the companies with a more suitable approach for their production. The significance of those elements, especially for Austrian companies, leads to a clearly defined focus on small and medium-sized enterprises. In summary, the research chair and the pilot center will be established to address a growing need for a strong interdisciplinary organization that can conduct research and development, as well as provide education and training in high performance and flexible manufacturing systems. Further aims will be automation technologies, and implementation of advanced sensors and robot integration – especially adapted for the needs of Austrian´s small and medium-sized enterprises.
The endowed professorship ensures the establishment of a highly knowledgeable, international research team, an elementary part of the ACAMS initiative, which is encouraged in order to increase knowledge in the definition, design, development, and implementation of manufacturing systems. Scientific knowledge gained in developing production systems will be spread beyond the project partner consortium and used to strengthen Austrian companies.
In addition to the described mission, the institutionalized research team specifically targets intensified integration of information technology, sensors, and actors in the developed production systems in order to establish visions, ideas, and innovations for automating manufacturing processes in a high-mix/low-volume environment. Therefore, beyond the economic and social challenges of industrial production, the developed concepts need to consider comprehensive application of currently available information technology. As information technology becomes the focus of attention, the vertical integration delivers a different view of production, as well as its processes and controls. The vertical integration ensures consistent information flow from the actuators and the production processes up to the control level, with the main purpose being to gather information generated by the modern machine controls, make highly usable information accessible over programmed interfaces, and analyze these data with appropriate algorithms in order to consolidate the level of information. Using that information, machine tools can communicate with each other, exchange information concerning process effects, and adapt to specific process-related needs. The execution level in production, which is highly dependent on those information layers, will make processes, machining conditions, and environmental parameters more transparent, and thus create improved quality and economic efficiency in manufacturing..
Manufacturing costs : Boston Consulting Group , https://www.bcgperspectives.com/content/interactive/lean_manufacturing_globalization_bcg_global_manufacturing_cost_competitiveness_index/
Change of paradigm : IFT
Number of small and medium sized comp .: see EU