A client asked us to help with an I4.0 project. Their factory and warehouse looked well organised. They showed me the raw materials in boxes, organised neatly on the shelves. There was clear labelling for each different raw material.
On the wall was a material movement board that listed all the different parts, together with how many boxes were in stock, the daily requirement, minimum and maximum stock levels etc. When a box was removed from the warehouse and delivered to the shop floor for assembly, the number was changed on the board. It wasn’t the most efficient system, but it worked.
Our first suggestion was to implement a simple card or ‘kanban’ system to replace the hand written board. I will not go into how it works here.
We were told that was not acceptable as they wanted to use technology to solve the ‘problem’. We were told that the regional director, who managed seven factories wanted to see what was in stock every hour.
We then suggested another very simple solution that and could be implemented free of charge, and be up and running by lunchtime the next day. Set up an instant messaging group: Whatssapp, Line, Teams, whatever. Then, the supervisor on duty would take a picture of the board and post it into the group every hour. Anyone in the group could see the amount of stock on hand.
We were told that this was not acceptable, because they wanted to use I4.0 technology.
We then asked, what if we set up a simple IP camera, focussed on the board. These cost about $40 then anyone could see, using their mobile phone or computer. They told us that was not acceptable either.
They needed a dashboard.
We called in the big boss to ask EXACTLY what he needed as they were changing their requirements all the time.
The boss said he wanted an RFID system to help manage the stock. The vendors would put a RFID tag on each box of raw materials that they delivered. When the boxes were delivered, they would be checked in. As boxes were taken from the warehouse to the shop floor, they would pass under a gantry and be deducted from the stock in the warehouse. The dashboard would then tell them how much stock was on hand at any given moment.
We told them that:
- The cost could be 10s of thousands of dollars with no return on investment as there were no cost savings to be had. By using RFID, the cost of finished goods would probably increase.
- They had nearly 80 vendors covering 400 or so raw materials. That would mean that every vendor would be responsible for putting the right RFID tag on the right box. How could this be managed?
I asked the regional director directly why he really needed such a system. He told me that the company policy was to use technology to help run the business. They wanted to “get into Industry 4.0.”
He said that when he received a call from a customer late at night, to find if their order was on time, he could look at the dashboard on his mobile phone and see how much stock was there in real time.
The ‘problem’ had nothing to do with RFID, I4.0, dashboards or anything else.
The problem was that they did not have a system in place where the customers could trust the customer service team when they were given delivery dates.
The point of this story is twofold. First, you don’t always need technology to solve a problem. Sometimes a simple solution will work fine. Businesses need to have solid systems in place before they introduce technology – according to report after report, up to 80% of all technology installations fail.
The second point is one of management. Should a regional director, managing seven factories be on the phone to customers at night confirming that they have enough stock on hand to fulfil their order? You can answer that question.
