How Manufacturers Can Cut Costs With Advanced Technologies
Enhance profitability by leveraging AI, ML, predictive analytics, and computer vision solutions.
Sunil Kardam of Gramener sheds light on how AI, ML, predictive analytics, and computer vision empower manufacturing companies to reduce expenses and elevate profits in a challenging business environment.
Manufacturing firms are grappling with mounting expenses, from increased interest rates to rising raw materials and energy costs. However, even in this cost-intensive business environment, manufacturing companies are not cutting back on one particular expense: investments in technology.
The reason is that innovative technologies like artificial intelligence (AI), machine learning (ML), predictive analytics, and computer vision help manufacturers boost internal efficiencies and profitability.
Let’s examine how cutting-edge technologies can enable manufacturing companies to reduce expenses and boost profit.
Predictive Analytics: Preventing Unplanned Downtime
According to a report by Siemens, the expense associated with downtime has notably risen in recent years. Unplanned downtime costs Fortune Global 500 companies 11% of their annual turnover, almost $1.5 trillion.
Predictive analytics can be part of the solution to this expensive problem as it helps understand the root causes of potential issues. By analyzing historical data, manufacturers can determine what factors led to downtime in the past. This information becomes pivotal when implementing process improvements, equipment upgrades, or operator training to prevent similar issues in the future.
Additionally, manufacturers can use predictive analytics to optimize their maintenance schedules. Instead of performing maintenance on a fixed calendar-based schedule, they can schedule maintenance tasks based on equipment health and predicted failure risks. Consequently, they can maintain consistent production schedules, minimize the need for emergency rush orders, reduce energy consumption, and save on repair costs.
Computer Vision: Solving Problems Before They Escalate
If AI is the “brain” of manufacturing operations, computer vision solutions are the “eyes.”
Computer vision falls under the umbrella of AI, enabling computers to understand and interpret visual information from various images and videos. The process involves using data, processing input images, labeling objects on these images, and finding patterns within them.
This ability allows manufacturing organizations to generate insights, analyze historical data, and identify early warning signs. When computer vision systems detect problems, they can trigger automated responses or alert human operators. As a result, teams can develop strategies to address issues before they result in costly defects, recalls, or rework.
For instance, fiber breakage during production was a constant hurdle to cross for a glass-fiber product developer. When 3B Fiber-Glass implemented computer vision technology, they started to identify and forecast breaks 75 seconds in advance, enabling them to reduce delays.
See More: How AI and Computer Vision Shape Our World
ML: Optimizing Inventory Management
ML is crucial in inventory management, enhancing the process’s accuracy and effectiveness. By harnessing algorithms, ML can analyze data, detect patterns and trends, and offer forecasts regarding future demand.
For example, most manufacturers usually experience a significant surge in product demand during the holiday season. Nevertheless, this year’s dynamics may be different. With inflation, the risk of recession, and uncertainty about the US economy, logistics companies do not anticipate the usual spike in demand during the peak holiday shopping season, according to the CNBC Supply Chain Survey.
Given that ML algorithms take into account a wide array of variables—including past sales data, market trends, and external factors like changing economic conditions, weather, and social events—they can help manufacturing companies make more informed decisions. With all this information at their disposal, they can make real-time adjustments to inventory levels and reduce expenses related to storing excess inventory, including warehousing, insurance, and depreciation.
See More: Four Top ML Trends to Adapt to for the Future
Making the Most of Your Tech Solutions
Admittedly, investing in hardware and software and deploying an innovative tech product will only sometimes help manufacturers automatically reap the benefits. The key ingredient for success is having a strategic plan to maximize the impact of innovative solutions and prevent financial losses.
First, manufacturers must understand what specific business problems they are trying to solve or opportunities they aim to unlock—reducing downtime, improving quality, or optimizing processes. Developing a data strategy tailored to these priorities can help maximize impact.
Second, remember that AI, ML, predictive analytics, and computer vision technologies rely heavily on data. Therefore, manufacturing companies must consider whether they can access accurate, relevant, and sufficient data. If needed, they can explore options to improve their data collection and storage capabilities.
Third, evaluate your current IT infrastructure. For instance, deploying a computer vision system requires cameras and data-gathering tools. If you are not equipped with these tools, it is time to budget and plan for the required upgrades. Moreover, a comprehensive understanding of your IT infrastructure helps manufacturers assess new tool compatibility with an existing setup, preventing unexpected expenses.
Strategic Technology Investments
Even though the business landscape is becoming more expensive for manufacturers due to increased interest rates and rising costs of raw materials and energy, trimming technology-related expenses is out of the question. Advanced solutions like AI, ML, predictive analytics, and computer vision can help manufacturers enhance their operational insights, proactively address issues, minimize downtime, and optimize inventory management, resulting in noteworthy cost savings.
How has technology impacted your manufacturing processes? Why is embracing advanced tech crucial for cost-cutting? Let us know on Facebook, X, and LinkedIn. We’d love to hear from you!
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