Leveraging AI for Manufacturing Success 

The market for AI applications in the manufacturing sector is set to grow astronomically in the coming years. Market research and consulting group Precedence Research predicts that AI manufacturing market size will double by 2025 and grow from $5.7 billion in 2022 to $63 billion in 2023. These predictions reflect the enormous potential of AI for manufacturing.

While most of the talk about business applications of AI have been in the realm of generative AI (that is, text and image generators), the real power of these technologies lies in areas like inventory management and manufacturing. From process optimization to predictive maintenance, AI is poised to transform manufacturing in the next decade.

What Is AI?

It might be easier to begin by stating what AI is not: it is not Skynet from the Terminator films, and it is not Hal 9000 from 2001: A Space Odyssey. It is not intelligent in the way people are; it does not have a will of its own. It doesn’t now, and it probably won’t ever.

The basis of the type of AI that exists in reality involves machine learning. To quote our book on AI implementation, Beyond Profit: Responsible Adoption of AI for Business Growth, machine learning consists of show[ing] a computer program lots of examples of something—let’s say pictures, including pictures of dogs and names of dog breeds—and [telling] the program which pictures are dogs and which ones are not. Just as a dog may make mistakes at first when learning a new trick, the computer will also make mistakes when learning to recognize dogs. But over time, using more examples and consistent feedback, the computer gets better at recognizing dogs, until it recognizes dogs correctly every time. And that’s all that machine learning is—teaching a computer program to learn by showing it lots of examples and giving it lots of feedback.

Machine learning algorithms not only work with vast quantities of data, they also work extraordinarily fast, achieving in hours or days what might take a human analyst months or even years to sort through. This example should illustrate that we’re a long ways away from machines that think and act autonomously, if such a feat is even actually achievable. Nevertheless, machine learning is remarkable as it is, and the above example should already have you imagining the potential of AI for manufacturing.

Quality Control

Take the quote above and switch out dog breeds for machined parts like, say, aluminum expansion slots for a computer case. By analyzing thousands of examples, an AI model can “learn” to identify what a well-made expansion slot looks like and determine which ones coming off of the line are bent, cracked, scratched, or otherwise flawed. AI can do this much faster than human inspectors can. The program can then flag them for further inspection by a human inspector.

Predictive Maintenance

The best medicine is preemptive: taking care of yourself before a problem arises. The same goes for manufacturing equipment. Waiting until something breaks is much more expensive than taking preemptive action.

The same method used to train an AI to assist in quality control is used in AI-powered predictive maintenance. Predictive maintenance combines real-time monitoring with analysis of historical cases. As these case studies show, machine learning algorithms and artificial intelligence are already helping manufacturing companies predict equipment and electrical failures before they happen by comparing historical examples to the current status of a particular machine, part, or resource. Plant engineers can then use this information to make repairs or prepare for maintenance shutdowns in ways that don’t disrupt production.

Process Optimization

Efficient, thoughtful processes are where businesses succeed. Businesses put a great deal of effort into refining their processes because optimal processes allow employees to focus on doing their jobs rather than figuring out (or just remembering) how to complete each step of their job. This is one way in which UK-based startup DAFO is working to develop AI for manufacturing.

In this short video, DAFO co-founder Daniela Gonzales explains their Modular Operator Guidance Suite, an AI system designed for use in assembly plants. Using a form of AI called computer vision, the system helps the operator pick the correct component from the components on the table and then place the component in the correct position. The system will then let the operator know if they’ve completed the task correctly. It’s a great example of AI not replacing a worker but helping a human laborer focus on the task itself rather than on the steps of the task, enabling workers to work more efficiently with fewer errors.

Supply Chain Management

The events of the past few years have highlighted the need for a more robust, efficient, and flexible supply chain. Many large companies like Amazon and Walmart have been using AI to manage their supply chains for years, but this technology isn’t just for the biggest businesses anymore. Modern supply chains are vast and complex, and AI can help identify trends that human analysts might miss, such as shifts in consumer demand or raw material availability. AI trained on the right data can also optimize delivery routes and times and suggest the best ways to use available truck capacity, according to a recent Smart Industry case study of a large shipping carrier. The case study highlights the benefits of AI-supported supply chain management for manufacturers, including “significant increase in first-tender acceptance” and “a significant decrease in total transportation cost.”

Integrating AI into Your Business

The initial wave of hype surrounding text and image generators is dying down and businesses begin to realize the true strengths of AI lie elsewhere. Despite AI’s potential, the manufacturing sector has been slow to adopt these new technologies. A measured approach is a smart move given the amount of marketing hype surrounding these technologies, but you also don’t want to miss out on something that can give you a competitive advantage.

Before adopting any new AI-powered systems, know what you want to get out of them. Like any other tool, just having it around isn’t going to solve problems. You have to first identify where your current processes are failing and understand exactly how AI-powered tools can help improve them.

Also note that replacing a human workforce is not the ultimate goal of manufacturing automation. People live and interact in a physical world of the senses. We understand context, history, relationships, emotion, and how both employees and customers actually operate, all in a way machines just cannot. AI can augment the work of human safety inspectors, customer service agents, and QA specialists, but until we can get self-driving cars to stop mowing down pedestrians, it might not be a good idea to put people’s lives in the hands of AI or to believe that AI is a magic word that will solve all of our problems. Like any other tool, AI will only ever be as good as the human beings in control of it.

We are in the midst of a technological revolution that will affect all sectors of the economy. That’s not an overstatement. While there is an element of marketing to all the hype surrounding AI, we are beginning to see how AI and other cutting-edge technologies can actually be useful in business. It’s not all about text and image generators.

These new advances have led to applications in all sectors, including manufacturing. When you think of AI for manufacturing, you might imagine autonomous robots doing complex tasks on an assembly line. While those concepts are still several years away from being a reality, there is so much new tech for manufacturing that has the potential to increase productivity, equipment uptime, and supply chain transparency, among other benefits.

Manufacturing is changing in profound ways. Manufacturers—even small organizations—that stay on top of changing technological trends will claim competitive advantages. Technology that was once the purview of the largest, richest corporations like Amazon are now available to everyone. Adopting the right ones and implementing them intelligently are the keys to future success. Let’s take a look at some of the tech that is at the heart of manufacturing of the future.

Internet of Things

While the “Internet of Things” was supposed to usher in the era of the smart home, it hasn’t quite taken off in the realm of consumer goods. Where it has found its most powerful expression is in the manufacturing sector. IoT is about devices and systems with onboard sensors communicating with one another over Wi-Fi networks. Integrated into manufacturing equipment, such sensors can monitor the status of different parts, aiding in cost-saving preventative maintenance efforts. IoT-enabled equipment can also monitor factors such as temperature and speed, ensuring that employees are using machines safely.

Blockchain

For years, blockchain was a technology looking for its use case. It may just find it in supply chain visibility. 

In manufacturing, blockchain technologies can bring clarity to a major point of uncertainty: the supply chain. A blockchain is basically a fancy spreadsheet that anyone can view. New entries must be approved by everyone with access to the spreadsheet, but once entries are made, they can never be edited or deleted. Because everyone involved has access to the same information, and because entries cannot be changed, the issue of trust is removed. It is a transparent system.

That brief description might already give you an idea about blockchain’s usefulness to the supply chain. Traceability, visibility, and provenance are all hurdles for businesses at every level of the supply chain to overcome. Tracking raw materials and individual parts through multiple countries and different shipping companies, from the mine the metals were extracted from to the final product on a store shelf, is a time-consuming, cumbersome, and costly task, but it is of vital importance to businesses and consumers alike. Blockchain technology can get every business involved on the same page, sharing the same information, with no opportunity for fraud along the way. This is especially important in industries where provenance and sustainable practices are causes for concern.

3D Printing in the Cloud

3D printing is another technology that has become increasingly affordable for smaller manufacturing companies. The latest innovation in 3D printing is cloud-based software. In the past, 3D printers were not typically connected to the internet and had to rely on their own onboard operating systems. Now, manufacturers using 3D printers can easily send designs to all of their printers and operate printers from one place. This capability is particularly useful when testing new designs, which might work perfectly on one machine but not another. Cloud-based software also allows for more complex designs that require greater CPU usage and storage.

Manufacturing Automation Using Robots and Cobots

Automation doesn’t have to be about deskilling or even replacing human workers. A growing manufacturing technology trend is the use of “cobots,” or collaborative robots. Like Ripley in Aliens, workers at Ford are using robotic exoskeletons to help get the job done, though in this case the job is reducing repetitive stress injuries, not throwing a murderous alien into space.

More commonly, small manufacturers will use small, multipurpose robots to assist workers in completing a variety of tasks. Tabletop robots are more powerful and affordable than ever, providing maximum utility without taking up too much precious floorspace. Imagine a single worker has to assemble a printed circuit board. A multipurpose cobot might assist them in placing surface-mounted devices on the board and then tightening tiny screws on other components.

Staying Ahead of the Curve

These technologies have already given large manufacturers an advantage, and as they become more affordable to smaller organizations, the ones that understand the technology, determine which tech is right for them, and implement new tech will get those same advantages before their competitors.

Technological progress is necessary to stay competitive. It is also very possible, even for a small manufacturer. StrategyWerx is here to assess your business’s technological needs, from manufacturing automation to AI for manufacturing, and help you get those systems running.

If you want to live a satisfying, rewarding life, you have to play to your strengths. You have to know who you are, what you’re good at, and what you’re not so good at. You’ve got to put yourself in positions that bring out the best in you. Sometimes we just have to get through the day, and the next day, and the next day, but if you don’t have some broader plan or vision for yourself, you end up directionless and stagnant.

It’s the same in business. Too many businesses only plan for the short term and don’t think beyond the current quarter. As important as those short-term goals are, they must be mapped out and executed within the scope of a long-term strategic plan. Setting goals and making plans is vital to the success of any business, as we’ve been saying for years. In this blog post, we’ll focus on strategic planning.

Strategic Planning for Sustainable Growth

Successful growth requires laying the track before the train. The way you do that is with a clearly articulated strategy—a plan designed to achieve a specific long-term goal. Strategic planning involves understanding what you will need to learn, develop, and invest in to accomplish that goal. While this seems like something only larger businesses would have to worry about, strategic planning is even more important for small businesses because they have fewer resources to work with.

Strong planning leads to more efficient and effective allocation of limited resources, which in turn gives you a clear understanding of what you will need in the future. Growth planning is a vital component of strategic planning.

The Steps of Strategic Planning

1.       Where Are You Now?

Strategic planning is a fluid process, but there are some steps every business must take to assess its current capabilities and identify areas for improvement. First, take a look at where and what you are right now. Ask yourself the following questions.

• What is your competitive advantage?
• What makes you different from other businesses offering similar products or services?
• Who are your current customers, and why do they work with you rather than another manufacturer?

You will also want to assess your business’s current capabilities: your personnel, processes, and production.

• What is the capacity of your current staff and facilities?
• What is your current unit cost and market share?
• Are you operating at close to capacity or do you have built-in room to grow?

Take, for example, a company whose employees are at their limits in terms of the hours they can work and the productivity they can provide. You have employees doing multiple jobs. You’re having to turn away new clients. You’re managing the floor while also doing the marketing and trying to run the company. Your strategic plan is going to look a lot different than the strategic plan of a company that is actively seeking out new clients because its employees and facilities have so much unused capacity.

2.       Where Do You Want to Go?

After assessing where you are, it’s time to think about where you want to go. What are your growth goals? At this point, you’re looking at a roadmap and planning your route. You could just get on the road and follow the signs, but you might end up spending more on gas, food, and lodging along the way as you spend time correcting wrong turns, sitting in traffic, and diverting around construction. Good strategic planning gets you to your goal faster and with fewer resources expended.

• Where would you like this business to be one, three, five, ten years from now?
• What are some model businesses who have already achieved that kind of growth? How did they do it?
• How will you conduct sales and marketing with growth in mind?
• How will you raise sufficient capital to invest in growth?

3.       How Do You Get There?

With your destination in mind, you can begin planning your route, so to speak. Note that the first question below is about your staff. Every employee of the company should be involved in strategic planning. They should be aware of the company’s plan and understand the role they will play in its future.

• Will your current staff need any additional training in order to scale up?
• What new problems will growth bring?
• How can you adjust your processes to accommodate adjustments?

One company that successfully implemented strategic planning for growth is Oakland Fortune Factory, owned by Alicia Wong and her mother Jiamin. Jiamin needed her daughter’s help with translation, but Alicia arrived with a vision of what the company could become. There are plenty of fortune cookie manufacturers, but Alicia saw a niche for gourmet fortune cookies with customization options.

It’s not just a vision for cookies that guided the company’s strategic planning, but a vision for the company’s place in the world. “My passion and my purpose are to use the cookies to help nonprofits that work for social justice,” Alicia told The Oaklandside. Finding a niche, understanding the company’s purpose, and analyzing available capital, staffing, and capacity all came together through a plan that allowed the company to grow and thrive.

Accommodating Scalability through Flexible Infrastructure

Scalability refers to the ease with which business functions can be expanded. One person making custom jewelry in their garage could be an expensive hobby or a profitable business, depending on the goals and business acumen of the one person in question. But what it is not is easily scalable. Without major organizational changes, a business like that has a definite ceiling. Ask yourself these questions when evaluating your business’s scalability.

• Do you have enough floor space to expand? Is your use of space optimized?
• Is your workspace optimized for workflow so that no time or effort is wasted as products move through different phases of production? How will this workflow change as you expand?
• Are you running at capacity? If so, how can you best increase capacity?

It’s not just physical infrastructure that needs to be flexible. Your IT infrastructure must also be flexible enough to scale up with your business. You’ll need a CRM system that is scalable for businesses of any size, providing as little or as much as you need as your business grows.

Begin Your Growth Journey Today

Laid out like this, it all seems easy. But each of these simple steps requires a lot of thought and research—and often, an expert voice in strategy, management, and organization. You’ve built the train, and you know how to operate it, but you might need help from a specialist in laying down track and blasting through mountains, so to speak. Strategic planning, growth planning, and investing for growth is our specialty. StrategyWerx is here to guide you through your growth journey.

The tried-and-true methods of selling are still being tried, but they’re not so true anymore. Plastering social media everywhere and hoping for a response becomes less effective the more everyone does it (and the more algorithms change to boost paid content). It’s becoming impossible to find good on-the-road salespeople. If you’re able to put salespeople on the road, the process is frightfully opaque, as there’s no good way to know exactly what they’re up to.

Just generating more leads is not the solution. According to HubSpot’s 2021 Sales Enablement Report, half of all leads generated are not a good fit for your company. We need new sales methods for manufacturing that can more efficiently target, cultivate, and close more customers. That method is account-based marketing (ABM), and the key to ABM is sales targeting.

Targeted Marketing for Manufacturing

With an account-based approach, you’re not just throwing money at ads and hoping to see a return, or writing blogs just to have some SEO content on the website, or posting on Instagram and waiting to watch the follower count go up. That kind of untargeted marketing leads to lower returns, more time spent trying to convince leads of your value, more competition from companies that might seem more attractive to some leads. You don’t want to waste your time going after every lead. You just want the best leads. How, then, do you find the “best” leads? You start by identifying and then segmenting the market.

Segmenting the Market

Segmentation involves dividing a broad market according to some identifying factors. But first, you need to know what kinds of leads you want to chase. The most precise way to do this is with data, and you already have some valuable data on hand: your current client list. This can become a slow and complex task, but managing complexity of this kind is a lot easier when you have the right team with the right technology at your disposal. Identify the highly satisfied high-sales customers you are already serving and think about what they all have in common.

This is exactly what American Express did in the 90s to grow their business. They identified their high-sales customers—business executives who travel often—and created rewards programs for frequent flier miles and hotel points that would attract more of this type of customer.

Not all of those leads will have the same level of awareness of your company, so you won’t be able to reach out to them all in the same way. It’s the difference between asking for a bite of your spouse’s sandwich vs. asking for a bite of an acquaintance’s sandwich. One will take no convincing at all, while the other should be approached carefully. So take those leads and segment them into three categories:

• Little or no awareness of your business
• Some awareness of your business
• Much awareness of your business

Since you’ll be making appeals to potential customers at different stages of the buyer’s journey, you’ll have to craft marketing and sales messages that resonate with each segment’s familiarity and relationship with your business.

Crafting Personalized Messages and Solutions

Just because a lead has little awareness of your business doesn’t mean you should write them off as being a poor fit for you. You might be the perfect partner for them—they just don’t know it yet! These low-awareness leads just need to be nurtured. You have to craft messages that move them through the customer journey, from discovery to purchase and beyond. That means making a solid first impression on the low awareness group while getting down to the business of selling with the high awareness group.

Take for example a semiconductor manufacturer who identified its ideal customer and took the time to understand the traits their highest-value customers have in common. In the process, they learned more about distributors’ capabilities and motivations, two vital components of a successful manufacturer-distributor relationship, according to this McKinsey report. They then zeroed in on a few potential customers who were most similar to their ideal customer: distributors that can help with demand creation and that have global connections in the medical device industry.

One of the companies on the manufacturer’s shortlist had attended a webinar hosted by the manufacturer in the past. They go into the “high awareness” category. The others have never interacted with the manufacturer and are put into the “low awareness” campaign, which consists of a series of introductory emails. Those emails have nothing to do with sales and do not end with a call to action asking the receiver to book a meeting with a salesperson. Instead, they introduce the company, with a little bit about what they do and what their values are.

This is the power of sales targeting as a sales method for manufacturing: sending the same email to high-awareness leads as low-awareness leads will likely either feel too aggressive for low-awareness leads or leave high-awareness leads asking, “I already know who you are, so what?” More personalized messages, on the other hand, demonstrate that you’ve taken time to address each lead’s needs. It’s like taking that acquaintance out to lunch a few times and establishing a friendly relationship before asking them to share their food with you. The best part is that juggling all of this information is easy when you have the right technology.

The Way Forward for Manufacturing Sales

If the old ways of generating manufacturing sales aren’t working anymore, it might be time to try sales targeting. Rather than chasing after every lead, you’ll start zeroing in on the leads you’ll have the best chance of closing by reaching out to each of them with personalized messaging. With just a few simple new methods, you can meet your growth goals.