How do we assess the financial benefits and ROI of digitizing production?
The 2024 State of the Digital Decade report by the European Commission highlights concerns regarding the EU's digital transformation efforts as the EU has yet to achieve full convergence on most targets and objectives. Thus, it calls for urgent actions to accelerate progress, especially for the areas with ample unexploited potential, like manufacturing.
However, research also shows that managers in industrial companies often doubt the financial benefits of digitalization and question how long it will take to recoup their investment.
This makes the question of how to assess the financial benefits and ROI of digitizing production more relevant than ever.
What is production digitalization?
Production digitalization can be divided into two key areas.
The first area involves the introduction of paperless operations, replacing traditional paper documents and records with a digital environment. The second area involves processing large volumes of production data and converting it into actionable information, enabling managers to monitor and effectively manage production in real-time as well as to plan and implement improvement measures.
Seven financial benefits of production process digitalization
While there are many benefits, these seven measurable factors contribute most to the positive (financial) benefits of digitalizing production processes.
Reduced production costs. According to a study by the World Economic Forum (WEF), digitalization reduces production costs by 15% to 30% in most industrial companies. This is primarily due to improved overall equipment effectiveness (OEE), shorter production cycles and faster, more efficient problem detection and resolution.
Increased plant productivity. The WEF study indicates that many manufacturers have more than doubled productivity through digitalization. This is achieved through better utilization of production lines, shorter changeover times between work orders or batches and more efficient elimination of brief line stoppages, improving production flow.
Increased worker productivity. According to a study by McKinsey & Company, digitalization significantly reduces manual tasks, allows for monitoring of each worker's performance and enables task scheduling based on their competencies. This leads to fewer production bottlenecks and errors, potentially increasing employee productivity by over 20%.
Simplified production organization. According to McKinsey, advanced production planning and scheduling systems powered by artificial intelligence and machine learning improve efficiency by aligning order execution with production capacity (raw materials, machines and workers) by up to 85%.
On-time and complete delivery. Many manufacturers incur high penalties for late or incomplete deliveries. The on-time-in-full (OTIF) indicator measures the ratio of orders completed on time and in full. Digitalization ensures that at least 90% of orders are completed on time and in full, reducing penalties.
Predictive maintenance. This modern approach monitors machine data to schedule maintenance before unexpected equipment failures occur, preventing production stoppages. A Deloitte study found that predictive maintenance can increase production uptime by 10% to 20%.
Reduced energy and water consumption. WEF reports show that digitalizing production reduces energy and water consumption by an average of 15% thanks to the use of energy management software that provides managers with actionable insights for improving operational efficiency.
Calculate your ROI for production digitalization
Although ROI is most commonly used to calculate the return on investment as a percentage, the concept can also be applied to determine how long it will take to recoup the initial investment.
ROI is calculated by dividing the expected investments by the financial benefits of digitalizing production, including cost reductions and potential revenue increases. These benefits may include higher production throughput, lower rejection rates and reduced labor, product, energy and spare parts costs. On the investment side, all necessary activities, software and hardware, are accounted for.
If the result is less than one, the investment is recouped in less than a year; if the result is 3 for example, the payback period will be approximately three years.
How can Metronik help you?
Contrary to popular belief, production digitalization involves much more than simply implementing software.
Its foundation lies in capturing, storing and processing production data into clear actionable information for monitoring and decision-making.
At Metronik, we offer our clients all the necessary services needed for effective digitalization, from planning to implementation of both technical and organizational measures, in addition to advanced software solutions from the MePIS family. This ensures that our clients can achieve their desired results more easily and quickly.
For more information on improving efficiency through production digitalization, please contact Vanja Tomažič, Director of Automation and Digitalization in Industry, at vanja.tomazic@metronik.si.
Benefit from the digitized management of production recipes
Manufacturing recipes are used in various fields such as pharmaceuticals, chemicals, food and other industries. They provide essential information about ingredients, processes and machine parameters to ensure product quality and safety. However, many facilities continue to use traditional recipe management methods, exposing them to risks such as errors, non-compliance and unnecessary expenses. Yet, with the right technological support, recipe management can offer an opportunity to improve compliance and competitiveness, as well as reduce production costs.
Drawbacks of traditional recipe management
The traditional approach to recipe management involves maintaining data on paper or in disjointed electronic records, manually entering data on machines and storing production data on individual machines, which has significant drawbacks.
Entry errors. The most common issue is errors in the manual entry of recipe data, leading to several negative consequences. Non-compliant products may need to be reworked or even discarded, resulting in loss of materials and additional costs. These errors often cause production delays and reduced productivity. Moreover, when discrepancies due to entry errors are not detected until after shipment, product recalls may be necessary, which can be costly and damage the company's reputation.
Time loss. Manual entry of recipes requires operators to move between machines, offices, archives and, in some cases, changing rooms, wasting valuable time. Experience shows that in such cases, operators can spend more than 30 minutes per recipe on each machine.
Data dispersion. Although production data on machines can be in electronic format, reports and archives often remain on paper or in simple spreadsheets. Relying on individual machines as primary data sources requires additional processing and checks, making it more difficult to ensure traceability and regulatory compliance.
Lack of version management. As production recipes evolve and are updated, traditional record-keeping hinders effective version management, making it difficult to ensure that the latest version is being used. Relying on the knowledge and experience of operators can result in the loss of critical information when they retire or change positions.
Lack of analytical data. The fragmented and disconnected nature of the data also hinders its transfer between different departments, such as production, quality control and development, complicating analysis and production improvements.
Traditional recipe management is not only time-consuming and inefficient but can also lead to production bottlenecks, reducing productivity and increasing costs.
The solution to these and other weaknesses is digitalization and centralization of production recipe management.
How digitalization of recipe management works
Digitalized management of production recipes covers the whole life cycle of a recipe – from developing, approving and transferring recipes to machines, to storing, reporting and archiving them within a single IT environment.
Preparation. During the preparation phase, it is easy to edit recipe parameters and add new operations and steps. This can be achieved using templates that specify the basic data or by copying and modifying the parameters of existing recipes.
Approval. Once recipes are ready, they undergo a digital approval process. An authorized person digitally signs the recipes, making them active. Since the process is digital, it can be done from anywhere, which speeds up the approval process. Active recipes can then be transferred to single or multiple machines and timings can be set accordingly. If necessary, an authorized individual can also deactivate or retire a recipe.
Transfer and activation. Once a recipe has been transferred, machines can operate autonomously without the need for additional recipe selection or confirmation by the operator. Upon production completion, all associated production data is transferred to a central database where it is available for analysis and reporting.
This entire process can be managed remotely from the comfort of your own office, without having to be present on the production floor. An audit trail is maintained for all actions, capturing who did what, when and why. Access and management rights to production recipes are also strictly limited to designated personnel, ensuring a high level of security.
Three key benefits of digitalized recipe management
Digitalizing the management of production recipes brings several important benefits:
Increased product quality. Eliminating errors in the manual input of recipe parameters increases product quality.
Reduced costs. Decreasing the amount of rework, scrap or product recalls, along with minimizing downtime, boosts productivity and cuts down on production costs.
Improved traceability and compliance. Digitization centralizes necessary production data, making it easier to track and report for compliance purposes. At the same time, the data is available for analysis and improvements in production efficiency.
How can Metronik help you?
Digitalizing production recipe management marks a substantial leap forward in manufacturing, delivering a wide range of benefits across various industries by improving efficiency, compliance and competitiveness.
All of these features and benefits are available in Metronik's MePIS RM (Recipe Management) solution.
For further details and to arrange a presentation, please contact Saša Sokolić at sasa.sokolic@metronik.si.
How does proactive management of employee competencies contribute to improved production performance?
Despite the high level of automation and robotics in modern industry, the influence of employees remains a key factor for production success. Although difficult to measure precisely, knowledge, skills, good management and a positive working environment can increase productivity by 10 to 30%. It is therefore important for manufacturing companies to monitor and manage these aspects, particularly by developing competencies, which are an essential element of employee impact.
How do employee competencies affect productivity?
Competencies – the knowledge, skills, abilities and experience employees need to successfully perform their work in production – contribute to success in several ways. These include better control of processes and costs, compliance with regulations and standards, and greater adaptability to internal and external changes.
Effective management of competencies in manufacturing is often hampered by dispersed data, a lack of visibility into employee performance and best practices, and insufficient time for managers to conduct analyses.
The Employee competency management module, part of Metronik's MePIS MES production management system, can assist in addressing these challenges.
How does the IT solution for competency management work?
The solution is based on competency transparency and offers several important functionalities:
Competency matrix. Thespecific needs of production processes include the tracking and management of competencies related to work on production lines, the use of equipment and machinery, and compliance with production regulations.
Staff allocation. In addition to normal scheduling, it allows for the automatic allocation of employees based on their competencies and production needs to achieve maximum productivity with the available workforce.
Notifications. At the start of each shift, it can verify the compliance of competencies for each production unit and alert managers t
o potential risks. It can also offer operators customized work instructions depending on the workstation, product in progress and the type of event that occurs.
Advanced analytics and reporting. It provides advanced analytics on production employee competency data, including performance reports, training tracking, risk assessments and analysis of employee performance on individual job tasks (KPIs).
Transparency and traceability. In conjunction with the HRMS, it enables tracking the validity of certificates for the use of production equipment, occupational safety, competence in production procedures, etc., as well as authorizations for working on machinery and equipment in production.
Metronik's innovative solution for managing employee competencies in production
At Metronik, we have integrated competency management functionalities into the MePIS MES manufacturing management system, enhanced them with AI algorithms specific to the manufacturing environment, and created an innovative solution designed for different types of industrial users.
It enables production managers to better plan work shifts, provides transparency of production processes with notifications of deviations in employee competencies, and offers the possibility to independently analyse and prepare development plans for employees.
For operators and maintenance staff, it provides support for faster onboarding, customized personal development plans, and performance feedback to improve skills and motivation.
With these and other advanced features, MePIS MES can make a significant contribution to faster and more fluid production processes, fewer errors, higher product quality and lower employee-related costs.
In addition, the solution is configurable, adaptable also to the needs of regulated industries, simple and user-friendly.
Key benefits of managing competencies in manufacturing
Cost reduction. Employees with the right competencies can better utilize production equipment, leading to higher product quality, improved yields and lower costs.
Fewer delays. They can also work faster and more efficiently, which in intensive industries helps to shorten cycles, reduce delays and increase production.
Employee satisfaction. More motivated, engaged and satisfied employees lead to higher productivity, less sick leave and better quality of work.
Regulatory compliance. In many manufacturing industries, the compliance of production processes and products is dependent on employee competencies.
Flexibility. Employees with the appropriate competencies are also better able to adapt to changes in production, allowing companies to respond more easily and quickly to market and technological innovations.
For more information on the IT solution for effective management of employee competencies in production, please contact Aleš Temeljotov at ales.temeljotov@metronik.si.
How can we increase production efficiency and quality with digital work instructions?
According to various studies, the human factor causes 35-45% of downtime and 70-80% of accidents in production. Therefore, it is one of the main causes of quality deviations and increased production costs. An effective solution to reduce the impact of the human factor on production processes is the use of digital work instructions.
What is the human factor?
The human factor is any impact on production resulting from the abilities, skills, knowledge, personality, behavior, and physical and mental state of employees.
Even in modern manufacturing operating according to Industry 4.0 principles, operators are still at the heart of the operation, ensuring that production processes run smoothly. This means that the strong influence of the human factor remains. Therefore, it is essential to reduce it to the greatest possible extent by introducing new technologies, enabling operators to work more efficiently for increased productivity, quality and safety of production.
What is the importance of digital work instructions?
Work instructions are usually paper documents that provide step-by-step guidance to users. Such documents are static, difficult and time-consuming to update, and prone to error and damage.
Therefore, an important part of the digitization of production is the integration of work instructions into production processes. Such instructions include not only text but also images, photos, videos and augmented reality elements that guide operators and other workers in operating the processes and machines for which they are responsible.
The key objective of digital work instructions is to increase production efficiency, which is achieved through the following improvements:
Real-time updates. Unlike paper documents, software for digital instructions allows real-time updating. This means that any changes are immediately reflected in the instructions, ensuring that employees always have access to the most up-to-date and accurate information.
Better accessibility. Employees can access instructions on a variety of devices such as tablets, smartphones and augmented reality glasses, making instructions available to them whenever and wherever they need them.
Fewer mistakes. Clear and interactive instructions reduce the likelihood of misunderstandings and errors, helping to reduce unforeseen production downtime and improve productivity, quality and safety.
Faster training. Digital work instructions simplify training, making it easier and faster for newcomers to grasp production processes and devices and become independent and productive at work. Digital records also make it easier for training coordinators and trainers.
Interactivity. Multimedia elements such as photos, videos and augmented reality help employees to visualize complex processes and devices and follow step-by-step instructions more accurately.
The use of digital production instructions also contributes to reducing paper consumption and environmental impact.
Digital work instructions and manufacturing execution systems (MES)
The greatest benefit to production comes from integrating digital work instructions with a manufacturing execution system (MES), which usually includes software tools to create and manage them.
The integrated system enables more detailed analysis and the opportunity to take additional measures to improve the efficiency of production processes:
Increase productivity. MES systems collect large amounts of production data that can also be used to monitor the performance of workers using digital instructions. By analyzing such data, it is easier to identify bottlenecks affecting productivity and improve the quality of instructions.
Quality control. This is a critical aspect of production, where digital work instructions can be designed to include quality checks and inspections at various stages of the production process.
Better traceability. MES solutions include traceability functions that allow manufacturers to trace the origin and history of every component used in a product. When combined with digital work instructions, traceability becomes more comprehensive, ensuring that all production steps are properly documented.
Digital work instructions and AI
Work instructions for complex manufacturing processes and machines can range up to hundreds of pages. Therefore, their review can be time-consuming, which can cause delays in elimination of non-conformities and increase of costs. Fortunately, the progress in the field of artificial intelligence enabled creation of copiloting tools, which significantly shorten the search for solution(s) – they allow operators, service technicians, maintainers, and other personnel to easily search for specific content in extensive documents, pose specific questions on how to solve various problems and obtain the answers.
The integration of digital work instructions into production processes in conjunction with MES is therefore a major leap forward for production efficiency, quality and safety.
Today, this is no longer just an option, but a requirement for manufacturers who want to succeed in competitive markets. The future of manufacturing is digital, and manufacturers who adapt, innovate and embrace digital work instructions will have an advantage over competitors who rely on paper documents and manual data.
How can Metronik help you?
At Metronik, we are developing and deploying our own manufacturing execution system, MePIS MES, which includes tools for creating digital work instructions and provides all the benefits described above.
If you are interested in finding out how this can contribute to increasing the efficiency and quality of production in your company, the contact person for more information is Vanja Tomažič, who can be reached at vanja.tomazic@metronik.si.
Key benefits and challenges of IT/OT integration for pharmaceutical manufacturing
According to a McKinsey study, around 80% of machines and devices in manufacturing represent isolated automation islands that do not communicate with each other or share locally stored data. This lack of connectivity reduces real-time visibility into production processes and hinders rapid response in the event of discrepancies. At the same time, it complicates the conversion of process data into usable information across various areas, including process stabilization, optimization, quality enhancement, compliance assurance and establishing comprehensive traceability, among others. This results in manual entries of process data into IT systems that generate production reports (e.g. MES), along with all the associated flaws. Therefore, it can be said that the disconnection of systems is one of the key challenges in modern manufacturing.
The solution to this weakness, which significantly impacts the production efficiency of industrial companies, is the concept of IT/OT integration – the process of converging operational technologies (OT) and information technologies (IT), bridging the physical and digital worlds. It enables companies to better manage production systems and facilities, respond more quickly to changes, optimize resource utilization and consumption, and enhance security.
What are OT and IT?
Operational technologies (OT) are designed to control and operate machinery and other production equipment. They have been in use since the advent of industrial electronics and automation.
As mentioned, in traditional setups, automation systems of different production islands are often not connected and thus the operators are responsible for local setup and management of production systems and data. This approach disrupts the flow of process information and has several drawbacks, mainly associated with human factors (e.g. errors and time consumption) and data integrity.
Information technologies (IT) encompass computer networks, hardware and software that are used to retrieve, store and process data to manage production processes. In the context of manufacturing, one of the key IT systems is the Manufacturing Execution System (MES).
What are the key benefits of IT/OT integration?
The term IT/OT integration refers to the convergence of operational technology (OT) and information technology (IT) into a unified environment where production control and management are based on a two-way flow of information. In this setup, operational systems/machines receive process parameters and their prescribed boundaries from the IT environment and, once the production step concludes, return (process) data for reporting and analytic purposes.
Such integration brings many benefits:
More efficient production processes. Bidirectional connectivity between the two worlds allows better control and management of production processes and systems, leading to increased efficiency by reducing the time, energy and resources needed for production activities (including support processes such as maintenance). In addition to time savings, the reduction in manual inputs also results in fewer human errors.
Increased flexibility. Companies become more adaptable and capable of responding quickly to regulatory requirements and changes in the market and the business environment in general, which is especially advantageous in dynamic industrial sectors.
Higher quality of products and services. Better management of operational processes ensures higher product quality, leading to increased customer satisfaction and strengthening the reputation of manufacturers.
Improved traceability and data integrity. OT and IT integration improves product and process traceability, which is important for compliance with regulations and standards.
Better decision-making. Integrating data from operational technologies (OT) with information technologies (IT) provides comprehensive and high-quality information for making better business decisions.
What are the main challenges of IT/OT integration in manufacturing?
Despite its many benefits, IT/OT integration requires proper planning, investment and security considerations, as new risks can arise when integrating operational and IT technologies.
Connectivity. Existing production equipment is often not adapted for connectivity to the information network (physical connectivity), including supporting bidirectional data exchange principles (logical connectivity). IIoT technology can help to collect and transmit data to the IT environment and receive and transmit commands to control production systems over wired or wireless networks. For this purpose, IT systems also need to be capable of processing the received data into useful information.
Training. IT/OT integration requires a shift in mindset and the merging of two traditionally separate worlds. Manufacturing professionals need training to understand IT, while IT professionals need a better understanding of manufacturing processes to establish trust and effectively utilize mutual knowledge.
Security. Separate operational and IT technologies reduce the risk to production facilities. However, by combining them, production is exposed to cyber threats. Therefore, security planning and appropriate safeguards are important to ensure operational security and production stability.
How can Metronik help you?
IT/OT integration is part of the digital transformation of manufacturing and the Industry 4.0 concept, areas that Metronik has been involved in for many years.
Our key solutions in this area include:
- MePIS UDG as a universal data connector for bidirectional exchange of (process) data between the physical and digital environments
- MePIS LS as a Manufacturing Execution System for Life Science, which integrates the shop floor with the IT environment, enabling the management of production processes and data
- MePIS RM as a central production parameter/recipe management tool and MePIS PDM as a manufacturing process data management tool. They can function as middleware for IT/OT integration with any MES system, not just Metronik’s system
In addition to our extensive engineering team with broad expertise, we have gained valuable practical experience from executing many successful projects. We have integrated IT/OT environments in more than 20 pharmaceutical production facilities, providing bidirectional connectivity to more than 200 different machines, systems and devices.
If you are interested in learning how IT/OT integration can contribute to production efficiency in your company, you can contact Dr. Saša Sokolić, Director of Marketing and Sales, at sasa.sokolic@metronik.si.
Implications of dynamic electricity tariffs on manufacturing companies
The growth of renewable energy, electrification of transport and phase-out of fossil fuels are impacting the entire power grid. Thus, systemic measures, such as load management (also known as demand-side management – DSM), are being introduced to balance electricity supply. These measures will also significantly affect the operations of industrial companies while offering incentives to optimize electricity consumption and reduce production costs.
What are dynamic electricity tariffs?
One of the key factors in increasing the share of renewables in final energy consumption and efficiently managing the electrical grid is active load management. It is manifested in dynamic tariff pricing, which aims to encourage proactive load management through a new methodology for charging for electrical grid use, known as grid fees, which is based on the Electricity Supply Act (ESPA) implemented in 2021.
The primary goal of dynamic tariffs is to influence consumer behavior and reduce electricity consumption, especially during periods of high demand, by charging higher prices. This is intended to encourage industrial consumers to adjust their production (-adjacent) activities to periods of lower demand, improving load distribution on the power grid and reducing the need for new infrastructure capacity.
One significant change is the shift towards a significantly higher cost weighting of the power tariff compared to the energy tariff, in contrast to the previous regime, which allocated a larger portion of network costs to the energy tariff.
Dynamic pricing also enables better utilization of renewable energy sources such as solar and wind, as production from conventional sources can be adjusted based on their availability.
Furthermore, it encourages the adoption of energy management technologies and energy storage systems, allowing companies and manufacturers to plan production in accordance with energy prices.
What do we need for electricity load management?
Electricity load management in manufacturing can be achieved through the use of advanced technologies, smart grids, modern metering devices and energy management systems.
Smart metering equipment. The basis for implementing dynamic pricing is the use of smart meters and metering devices that enable precise real-time monitoring of electricity consumption and the transmission of data to a central energy management system.
Communication infrastructure. Efficient communication infrastructure, based on robust data networks and IIoT technology, is required for transmitting data from smart meters and metering devices to the central system and for receiving and storing tariff information.
Energy management system. This system forms the basis for load management, allowing real-time monitoring of consumption for all key consumers in production, data analysis and consumption forecasting, and optimization of consumption in response to dynamic tariffs. This level of control cannot be achieved manually, but only through appropriate digitization and process automation.
Data monitoring and analysis. To effectively leverage dynamic tariffs, it is essential to accurately analyze energy consumption data to identify consumption patterns and adjust production (-adjacent) processes in accordance with tariff changes.
Automation of load management. Automation plays a key role in responding to dynamic tariffs, enabling consumption adjustments based on current tariff prices and adapting production (support system) schedules to time periods with lower tariffs, including through artificial intelligence algorithms.
Working with energy providers. Cooperation with electricity suppliers is also an important factor, as are agreements on the introduction of dynamic tariffs and determining best practices for consumption adjustments.
Education and training. Understanding dynamic tariffs and managing energy consumption in accordance with tariff changes also requires training for employees involved in the planning and implementation of production processes.
How can we help you at Metronik?
Metronik has developed the MePIS Energy software solution to monitor and manage energy consumption.
It is designed to monitor consumption in real time, detect and eliminate hidden losses through instant communication between key stakeholders in production events, and enable seamless adjustment to dynamic electricity tariffs.
MePIS Energy consists of several modules for energy monitoring and energy management, energy accounting and advanced analytics with artificial intelligence to forecast consumption based on various production and other factors.
It is also flexible in terms of data acquisition from machines, meters and other applications, serving as a reliable foundation for dynamic electricity tariffs.
It provides industrial companies with clear and understandable visibility into energy consumption in their production processes, helping them to identify improvement opportunities more quickly and manage energy load more effectively.
Key benefits of MePIS Energy:
- Comprehensive real-time overview of energy consumption in relation to various production factors
- Rapid detection and elimination of unnecessary energy consumption
- Proactive energy load management in production
- Clear KPI-based information for effective energy management at all levels of the organization, from operations to management
- Secure storage of all energy consumption data in one place
- Tools for monitoring and reducing greenhouse gas emissions and preparing energy reports
- Basis for setting targets and verifying the effectiveness of measures in accordance with ISO 50001, ISO 14001 and other standards.
For more information and solutions related to energy efficiency in production, please contact Vanja Tomažič at vanja.tomazic@metronik.si.
How can we effectively reduce the frequency and costs of unexpected production outages?
In the highly competitive modern economy, industrial plants are under constant pressure to avoid unexpected production stoppages that affect their productivity, profitability and customer relationships. Research shows that these interruptions result in annual productivity decreases of 5% to 20% and revenue losses of 3% to 8% for manufacturing companies.
Preventing unexpected production failures is therefore an area that requires dedicated attention through preventive and, where necessary, corrective measures.
What are the main causes of unplanned production outages?
Manufacturing is a complex interplay of equipment, personnel, raw materials and components used in the products, and thus the causes of downtime can vary.
Equipment failure. The most common cause is equipment breakdowns. Typically, manufacturing plants focus on the central and more expensive parts of machinery, often neglecting the failure of smaller items such as pipes, valves, rotating parts and similar components. Unfortunately, these smaller failures occur more frequently and can still result in significant losses.
Equipment malfunction. Production stoppages are not always caused by failures. Often, equipment is working but not properly, causing noise, strong vibrations, incorrect temperature fluctuations, etc. Such deviations indicate the possibility of a major malfunction, necessitating production halts to correct them.
Human factors. Production workers can make errors in machine settings or raw material mixes, overlook warning signs of malfunctioning equipment and much more. Many industries face shortages of production and maintenance staff. A significant part of this challenge arises from the retirement of experienced employees, who cannot be adequately or quickly replaced by younger staff.
Supply chain issues. Shortages of raw materials and critical components are also a fairly common cause of unexpected production shortfalls. In many companies, inventories have been eliminated in order to optimize financials, so any discrepancies in supply can lead to a standstill. In addition to general supply chain issues, there are also specific shortages of certain raw materials or components, such as chips, that arise for political, environmental or other reasons.
What are the consequences of unplanned production outages?
The consequences of outages are primarily financial but not limited to that.
Financial impacts. Even during production downtime, expenses continue to accumulate as companies must cover employee salaries, fixed costs, repair expenses and disposal costs for products that do not meet quality standards.
Customer relations. Production disruptions can lead to missed deadlines, affecting the reputation and trust of customers, who may switch to competitors. This is particularly sensitive in high-volume production, where even short interruptions can be problematic.
Impacts on employees. Frequent and unexpected outages also increase employee stress, leading to more frequent safety issues and workplace injuries during shutdowns and restarts.
How do we effectively reduce production outages?
While unexpected production outages cannot be completely avoided, their frequency and negative consequences can be significantly reduced with the help of advanced technological solutions.
The first prerequisite for improvements is the capture and central storage of quality data from machines. This can be achieved using Industrial Internet of Things (IIoT) devices and a process historian. The data generated provides real-time insight into processes and their history, which is transformed into actionable information through advanced analytical tools.
Systematic root cause analysis and elimination. Understanding the causes of outages is the key to preventing them. Key performance indicators and other valuable information assist plant managers in planning and implementing corrective and preventive measures.
Predictive maintenance. Predictive maintenance uses IIoT sensors and devices to continuously monitor the operation of production equipment in real time. By using artificial intelligence (AI) and machine learning (ML) analytics, a large amount of production data can be rapidly analyzed to identify malfunctions before a significant disruption occurs.
Early warnings also enable maintenance personnel to prepare, combine several interventions if necessary and carry out repairs at the optimal time. With useful information, engineers can better plan maintenance schedules to minimize damage to productivity.
This results in fewer disruptions, shorter production stoppages and lower adverse financial impacts. Experience shows that this can boost the overall equipment effectiveness (OEE) to over 90%, which is why experts call the predictive approach the "gold standard" of maintenance.
Predictive stabilization and process optimization. Through the use of modern software tools that include AI and ML, various activities can be automated to expedite processes, reduce the risk of human errors and increase safety. Typical examples are predictive simulations to prevent process issues before they occur, automated configuration and calibration of production equipment, and management of production recipes.
Using IIoT, process data and artificial intelligence, a virtual model (known as a digital twin) can be created, which synchronizes with the actual production status in real time. This provides engineers with transparency into production equipment to prevent downtime, enables remote incident analysis without the need to halt the entire process, and allows for some repairs directly through the digital twin.
How can Metronik help you minimize downtime?
At Metronik, we have been specializing in industrial automation and digitalization for more than 30 years. Recently, we have also been intensively incorporating artificial intelligence and machine learning algorithms into our solutions.
We help our customers to reduce the frequency and cost of production downtime in a variety of ways.
Our advanced software solution, MePIS OPEX, is designed to analyze downtime data with a number of KPIs to identify and address the causes.
The MePIS MES production management system includes a maintenance planning module, which also incorporates predictive approaches.
We also produce digital twins to monitor processes and the operation of production equipment in a virtual environment.
Although unexpected stoppages are a constant feature of production, their causes are quite clear: production equipment breakdowns, human factors and a lack of information to prevent downtime.
However, with the development of technology, more advanced solutions our now available. These solutions allow us to largely avoid such downtime, maintain high productivity and meet our customers' expectations.
For more information regarding solutions to reduce production downtime, you can contact Vanja Tomažič at vanja.tomazic@metronik.si.
How to ensure a reliable source of energy and environmental data forsustainability and reporting?
Sustainability has been an important topic for several years, although it has been somewhat
overshadowed in recent years by the coronavirus, the energy crisis and the war in Ukraine.
Nevertheless, it has now regained prominence with the introduction of the new European Corporate
Sustainability Reporting Directive (CSRD), which came into effect at the end of last year.
The European Green Deal
Sustainability reporting supports the European Green Deal, a package of policy measures aimed at
transforming the EU into a modern, efficient and competitive economy with net zero greenhouse gas
emissions by 2050.
The first Non-Financial Reporting Directive (NFRD) was already adopted in 2014, under which
approximately 11,600 companies in the EU started sustainability reporting in 2018 for the previous
financial year. However, despite the defined guidelines, the reporting and quality of the information
disclosed by companies under the NFRD have not significantly improved.
To address this, the CSRD Directive was introduced to help achieve the goals of the European Green
Deal more successfully by providing more concrete information about risks and opportunities
regarding sustainability in companies and their impacts on people and the environment as a principle
of double importance.
Commitment to sustainable reporting
The CSRD Directive expands the scope of the requirements for sustainability reporting to additional
obligees:
- Large companies that meet two out of the following three criteria: 1) have an average
number of employees exceeding 250 in the financial year and/or 2) have a net revenue of
more than EUR 40 million and/or 3) have more than EUR 20 million in capital. - All companies in the EU listed on the stock exchange, including small and medium-sized
companies, except micro-enterprises. - All companies based in third countries that 1) generate more than EUR 150 million in net
revenue in the EU and 2) have at least one subsidiary or branch in the EU.
In addition, companies are now also responsible for monitoring the sustainability information of their
subsidiaries.
Although the directive formally obligates only about 50,000 companies in the EU, its provisions will
affect most of the European economy. This is because additional disclosures by obligees will have to
include information on the most significant actual and potential adverse impacts and the measures
that mitigate or eliminate them throughout their entire value chain.
In practice, this means that all companies that engage with them as business partners, suppliers or
contractors will have to adapt to sustainable business practices and reporting.
Additionally, some companies choose to report voluntarily, as sustainability information is essential
for improving business operations and competitiveness, as well as for various external stakeholders,
such as owners and banks.
ESG sustainability reporting
The CSRD requires companies to qualitatively and quantitatively report on a wide range of
environmental, social and governance (ESG) issues.
Regarding the environment, companies will have to disclose information according to the new
standards, including:
- All major environmental issues, including dependencies and impacts related to climate, air,
land, water and biodiversity. - The level, scope and reduction of greenhouse gas emissions, including carbon offsetting
measures and the source of the envisaged measures. - Energy consumption and energy efficiency.
Technology also has an important role to play in this process, enabling companies to process and
prepare relevant data in a rational way, which is only possible with adequate information support.
How can Metronik help you?
The basis for sustainability reporting is the automatic collection, storage and analysis of data and the
preparation of corresponding reports.
At Metronik, we have developed cutting-edge energy information system MePIS Energy, which
serves exactly that purpose.
It consists of several modules for monitoring and managing energy consumption, energy accounting
and advanced analytics with artificial intelligence, which can calculate consumption forecasts based
on various production and other factors such as tariff classes. It is also flexible in capturing data from
machines, meters and other applications.
Compared to billing data that shows past periods, it enables real-time consumption monitoring and
faster detection and elimination of hidden losses.
It provides industrial, commercial and other companies with clear and comprehensible visibility of
the consumption of various energy products and water, the calculation of their carbon footprint, the
implementation of measures for improvements in individual areas, and the corresponding data for
sustainability reporting.
MePIS Energy is a reliable source of energy and environmental data and enables the following:
- Automatic capture and secure storage of energy and other environmental data in one place
- Automatic calculations of environmental KPI indicators for sustainability reporting, such as
carbon footprint - Quick and easy preparation of energy and sustainability reports
- Management of measures to improve energy and environmental sustainability
- Comprehensive real-time overview of energy consumption in relation to various factors
- Quick detection and elimination of unnecessary energy consumption
- A foundation for meeting the requirements of ISO 50001, ISO 14001, EMAS and other energy
and environmental standards
Although the obligation of sustainable reporting for new obligees will be phased in from 2026 to
2028, it is not advisable to delay until the deadlines, as was the case with the GDPR adaptation.
Taking action under time pressure tends to be more expensive and less well thought out than
preparing for the required changes in a timely manner.
For more information and practical solutions regarding the MePIS Energy system for efficient energy
and environmental management and reporting, please contact Vanja Tomažič at
vanja.tomazic@metronik.si.
Seven measures for effective improvement of production quality
In today's demanding industrial environment, production quality is one of the key factors for competitiveness and business success. Quality problems may lead to delays in deliveries, product complaints and rejections, and loss of customer confidence. Therefore, even minor deviations should not be overlooked, but should be corrected before they become major and significantly more expensive.
There are two aspects of production quality: process and material.
The process aspect depends on managing production processes, which includes outlining (process) workflows, securing and orchestrating resources with properly functioning machines, and actively managing all relevant data.
The material or product aspect of production quality is associated with the various measurements and inspections that are carried out during production for the early detection of deviations, and with the final inspection to ensure that products meet the required characteristics.
If we notice problems with production quality, the following seven measures can help us make systematic and effective improvements:
Identify deviations. The first step is to determine the quality objectives and analyze the deviations in the actual production processes. This is followed by identifying the causes, prioritizing non-conformities according to their importance and impact on customer relations, and taking action to eliminate them.
Automate processes. The human factor statistically plays a significant role in production quality deviations, so production processes should be automated as much as possible. This is not only about expensive and complex automated production lines, but significant improvements can be achieved with relatively simple and inexpensive measures, such as implementing barcodes or digital lists for materials, raw materials and products.
Eliminate paper. Paper is another important source of inconsistency in production. Paper records are lost or incorrect data is (mistakenly) recorded on them. Even a major stain on work instructions can cause an error. A significant engineering change on paper may reach production too late or not at all. All of these factors have an impact on production quality.
Provide real-time data. Accurate and timely data is crucial for the early identification of deviations and actions. Automating the collection of important production data and displaying them with real-time dashboards and reports enables better visibility and more accurate decisions for production quality.
Establish traceability. Addressing a single deviation may be beneficial, but may not address the root cause of manufacturing quality inconsistencies. For effective and lasting solutions, it is necessary to collect and analyze data from the entire production process.
Connect the data. Common causes of production quality problems are scattered documents and data. Gather all production-relevant data together in one place and make it accessible to everyone who needs it. This not only increases production quality, but also reduces the time spent by employees searching for the correct information.
Automate quality control. Automated data collection and verification accelerate the detection of deviations in production processes and enables their elimination before they affect production quality. Proactive alerts about stock shortages, possible machine problems or deviations in product quality can help.
As can be seen, most improvements in production quality are based on digitization, such as automated collection, processing and display of quality/process data, which requires an appropriate software tool.
Improve the quality and reliability of production with MePIS MES
The MePIS MES manufacturing execution system is designed to ensure the quality, transparency and efficiency of production. It includes the following essential functional modules:
• Workflow management enables higher-quality processes and products with fewer errors.
• Micro-planning of production optimizes the allocation of resources/work orders for higher production efficiency.
• Traceability of raw materials and products and the genealogy of products is supported by connecting the final product with input resources, production events and process values.
• Quality management ensures real-time (autonomous) monitoring of quality parameters and faster and better response to non-conformities.
• Production data management provides the integrity and completeness of production data in one place.
In addition to the above, MePIS MES also includes modules for managing the maintenance of production facilities, internal logistics for the provision of production raw materials and supplies, product labeling, energy management, achieving operational excellence through the elimination of bottlenecks, and comprehensive production monitoring with key performance indicators (KPIs).
However, since technology usually represents only part of the solution, we also offer our clients professional advice from experienced experts to help them improve production quality more easily and quickly.
For more information and to exchange experiences on possibilities to increase production quality at your facility, do not hesitate to contact Vanja Tomažič at vanja.tomazic@metronik.si.
Increase productivity, improve quality and facilitate regulatory compliance in life science manufacturing with MePIS LS
Competition in global life science markets is constantly increasing, customers are becoming more demanding and health reforms are putting pressure on prices. At the same time, regulatory requirements for medicine quality and safety are becoming increasingly stringent. Life science manufacturers are thus under increasing pressure to produce the highest quality products in the shortest possible time, at the lowest possible cost and safely.
For efficient medicine production that complies with all standards and regulations, classical methods no longer suffice. Utilization of advanced technologies is required to digitally support processes, ensure proper execution, secure GMP and regulatory compliance, and develop continual process improvement initiatives.
One of the decisive digital steps is the implementation of a Manufacturing Execution System (MES), which can contribute to production excellence in several areas:
Real-time production visibility. Central processing and review of production data enables real-time reactions based on performance and quality indicators and faster responses to prevent deviations.
Time savings. Integration of production systems and procedures into central software results in lower needs for manual inputs, much less paperwork and faster postproduction analyses, leading to optimized process times and faster product release to market.
Productivity and quality. Standardized production workflows lead operators through all the process steps, ensuring faster execution and minimizing human error. Proactive system management of key operational and quality parameters provides the basis for preventive action to avoid deviations before they occur, resulting in less waste and higher output.
Manufacturing flexibility. Quick adaptation to changing needs and demands requires flexible production, which allows faster introduction of new products; integration of new processes, production sites and personnel; and connection with the supply chain. Moreover, central MES enables the application of modern approaches such as review by exception/quality by design.
Compliance with regulations and standards. On-demand availability of electronic data on machines, process parameters, materials, procedures and people for every step of the production process facilitates compliance with regulatory and GMP requirements.
Tangible benefits in all these areas can be achieved with the introduction of MePIS LS, a modular MES adjusted for life science manufacturing.
For more information, request the MePIS LS brochure.