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Focus On Lights Out Processes and Not Lights Out Factories

by Simon Jacobson  |  June 4, 2020  |  2 Comments

Factories are volatile environments.  Varying utilization rates, staffing levels and staggered shifts, and the new demand to create a consistently safe working environment each have their own challenges that require attention so demand can be reliably serviced.  Meanwhile, as evidenced through client inquiry, my work with CESMII, and the 20 interviews with global manufacturing strategists my colleague Dana Stiffler and I just completed, it is extremely clear that no one is hitting the pause button on their smart manufacturing plans any time soon.  Investments are however being pivoted towards the worker experience

This is encouraging. 

This isn’t discounting the discussions on factory automation and “lights out” manufacturing. They have intensified.  Interest in “lights out” manufacturing where factories can run with extremely minimal intervention has re-appeared.  Are we any closer to lights out than we were 6 months ago?  No.  Even before the pandemic, promises of fully automated, hyper adaptable production were suspect.  Only 17% of the respondents in our 2019 Realization of Industry 4.0 Study, believe they will run completely on digital, lights out production setups by 2025. Whereas the majority (79%) see their manufacturing operations as being composed of human driven, manual processes augmented with digital ones. On a more cynical note let’s face it: for some companies removing paper or eliminating a manual process would be a revelation.

Let’s not misinterpret the data.  Automation is a necessity in manufacturing and there are ample opportunities.   Yet when combined with the current state of affairs a judicious strategy versus a “reactive” or “defensive” approach is sensible for the long term.  Trade-offs still need to be made.  Labor versus automation trade-offs persist and aren’t a discussion for economies with high labor cost or dwindling factory skill sets.  In addition, ongoing reshoring and location shifts must be factored in.  

Some things have not changed.  The rise of artificial intelligence is still a perceived threat to factory employment.   Physical automation will remove and replace some roles and skills.  Applying digital tools like computer vision will lessen the need for close inspections, while robotic process automation (RPA) promises to eliminate the busy work for engineering and quality control roles.  While some of these investments can be perceived as “improving the worker experience” and are sold as the “elimination of non value add” we need to look at the long game.  Will today’s liberation of a worker to “do more with less” inadvertently create tomorrow’s overhead reduction target?   

Today’s environment makes automation even more personal.  Similar to removing restrictions and coming out of quarantine, automation investments need to be tactical and gradual. Balance is necessary. It means suppressing “knee jerk” or reflexive investments and diligently identifying where your opportunities are. We cannot control our reflexes, but we can control the ability to continually adapt towards an uncertain future by approaching factory automation this way:

  • Focus on lights out processes not lights out factories.  The supply chain’s demand for factory flexibility and speed will increase as activity picks back up.  Where can processes be at least 75% lights out? Managing the movement of materials becomes a ripe target.  Eliminating dwell time between stages or shortening the time to replenish kits and materials line side improves production rates and positively impacts controlling inventory levels and supplier interactions.
  • Right-size the approach.  Where can the operator’s experience be improved with a digital tool?  Immersive experiences (AR or VR) provide a “coach and advisor” capability that marries data and intuition. This creates and shares knowledge–versus removing it–without compromising certain methods and procedures.  Changeovers are ripe for this approach.  
  • Don’t react.  Today’s “nonvalue add” is tomorrow’s “inadvertent overhead”.  Will automation a set of tasks to lessen the burden on a worker today create tomorrow’s overhead reduction target?
  • Prepare for what lurks in the financial shadows.  Factories are far from updating technology with the same frequency as an application on your phone.  Technical debt is consistently overlooked, and integration costs are always (significantly) underestimated.  Be prepared to spend money modernizing OT (programmable logic controllers, drives, and other technologies that control a process). 
  • Look beyond cost and quality. Use nonlinear thinking to pursue a “next level” of benefit.  Consider this:  investing $3K to automate a single unit operation has spot value for cost and quality improvements.  Yet when combined with other investments, like predictive analytics, could have significant payback downstream by either removing bottlenecks in the factory or eliminating quality issues at the customer.  

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Category: driving-cost-optimization-across-the-enterprise-supply-chain  leading-the-next-generation-workforce-supply-chain  manufacturing-operations-strategy-and-performance  supply-chain  supply-chain-strategy-leadership-and-governance  technology-and-solutions-for-supply-chain-and-operations  

Simon Jacobson
Research VP
19 years at Gartner
19 years IT Industry

Simon Jacobson is a Vice President in Gartner's supply chain research organization and covers manufacturing operations. Mr. Jacobson advises clients responsible for manufacturing strategy and performance. His research helps clients develop transformational roadmaps and implement their strategies for smart manufacturing and Industrie 4.0.. Read Full Bio

Thoughts on Focus On Lights Out Processes and Not Lights Out Factories

  1. says:

    really Good i enjoy it.

  2. Subba Rao says:

    Very nice depiction of current realities. Across industries the maturity level of landscape varies, so does the practicality to digitize towards smart manufacturing. For many manufacturers lights out processes & technologies behind will be driver in coming years.

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