OPTISaw – IIoT: A Different Look at Factory Floor Automation Wednesday December 2, 2015

MEMEX Inc. (TSXV: OEE)

OPTISaw Montreal 1  

Agenda •  Introduction •  The Ford/Jobs “secret” •  IIOT connectivity “secret” •  Connected manufacturing –

Introduction to MTConnect •  Dispensing with manufacturing

buzzword bingo •  Big Data in manufacturing •  The connected manufacturing model

– What? Why? How? When? •  The Big Data value proposition •  Financial OEE – What is it? •  Summary – IIoT Innovation is

Achievable! •  Q&A

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The Ford/Jobs Secret – Innovation •  Innovation can come from anywhere

•  Henry Ford and the Chicago meat packers (the assembly line)

•  Steve Jobs and Xerox PARC (GUI) •  Sawmills and advanced

manufacturers •  Ford and Jobs grabbed the

opportunity and ran with it.

•  How about you?

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IIoT Connectivity – THE Hot Trend •  “According to research conducted by General Electric, enabling internet-

connected machines could add up to $15 Trillion to global GDP by boosting annual production growth by 1% to 1.5% in the U.S.”

PLANT Magazine cover article on The Internet of Everything •  “Companies are preparing to increase spending on data collection and

analysis. IDC estimates Canadian companies will spend $21 Billion on such projects in 2018.”

Forecast by IDC Canada and Telus Corp.

•  “It is extremely important that we explore the potential of connectivity. “It’s about connecting the machine to all the factory systems, the data systems, and systems used to visualize performance, efficiency, and quality.”

Victor Woo, General Manager of IoE Cisco Canada

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mainframes 1960

batch computing time sharing

minis

distributed computing

networked personal computing

micros / PCs

open systems & client servers

cooperative computing

universal computer connectivity

Connected Manufacturing Model

2000 1980 1990 1970

The technology is here today, the tools are readily available and cost-effective

2015

Internet Universal Machine Connectivity

Following the computer and the Internet, every machine tool will become a node on the network creating greater efficiency.

Your Ford/Jobs Innovation Moment

Connected Manufacturing

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The Current Tower of Babel in Factories •  Over 90% of manufacturing machines WORLDWIDE don’t

communicate with management in real-time •  20 generations, 60+ manufacturers, 8 unique controllers •  A factory Tower of Babel – 1500 different protocols! •  Disconnected from management’s decision making process •  Creating inefficiencies in the manufacturing process

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“MTConnect will be more important in the 21st century than the CNC was in the 20th century.” John Byrd, Past President The Association for Manufacturing Technology  

www.MTConnect.org

MTConnect Makes Connected Manufacturing Come Alive

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打開和免版稅將永遠贏得市場

ووممننففتتحح ووححرر االلممللووكك االلففووزز دداائئمماا ففيي االلسسووقق

Offene und immer gewinnen den Marktplatz

Ανοικτή και θα κερδίσει πάντα την αγορά

Åpen og vil alltid winthe markedsplass

Before MTConnect The Classic (N-1)2 – N Problem

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App B

App D

App E

App C

App A

打開和免版稅將永遠贏得市場

ووممننففتتحح ووححرر االلممللووكك االلففووزز دداائئمماا ففيي االلسسووقق

Offene und immer gewinnen den Marktplatz

Ανοικτή και θα κερδίσει πάντα την αγορά

Åpen og vil alltid winthe markedsplass

What information would you like from me?

What information would you like from me?

What information would you like from me?

What information would you like from me?

What information would you like from me?

   

App B

App D

App E

App C

After MTConnect

App A

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•  Today, it’s now possible to enable ALL manufacturing machines and related devices on the factory floor and/or multiple factory floors to communicate in real-time

•  You can turn ANY piece of discrete manufacturing equipment into a webserver that can deliver productivity metrics anywhere

•  You can connect EVERY machine and EVERY plant to management, increasing revenue and profit margins

With MTConnect you CAN Connect Factory Assets and Drive Productivity

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Manufacturing Buzzword Bingo •  Six Sigma, Deming Cycle, Hoshan Kanri,

etc.

•  OPC, MODBUS, BACnet, Profibus, Fieldbus, TCP/IP, SCADA, MQTT, INSTEON, ZigBee, XMPP, OSIAN, Z-Wave, DDS, 6LoWPAN, AMQP, etc.

•  Most companies have continuous

improvement initiative(s), manufacturing equipment producing data, and available communication protocols and methods to collect and store it

•  But that doesn’t assure success in leveraging big data to improve manufacturing efficiency and profit$

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1 in 2 business leaders don’t have

access to data they need

83%  of CIOs cited BI and

analytics as part of their visionary plan

2.2X  more likely that top

performers use business analytics

80% of the world’s data

today is unstructured

90% of the world’s data was created in the

last two years

1 Trillion connected devices

generate 2.5 quintillion bytes

data / day

Big  Data  –  Relevant  Sta/s/cs    

MC2 2013 Conference – John Meyer’s 2013 Keynote: Businesses are “dying of thirst in an ocean of data”

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Manufacturing  and  Scaling  Big  Data      

•  Manufacturing means accessing and creating the right data and equally important, the right metadata (data about data)

•  Scaling means using the right metrics and algorithms to separate the critically important data items from all the “noise”

•  It’s not the amount of data you collect, it’s what you do with it to create business value!

•  Inter-relationships between collected data items are the key to understanding WHAT, WHY, HOW and WHEN

Scaling Big Data

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Data Streams in MFG - Raw 10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  10101010101010101010101010101010101010101  01010101010101010101010101010101010101010  14  

Data Streams in MFG - Decoded 101010101010101WORKORDERS10101010101010101  010EQUIPMENTRUNTIME10101010101011010101010  10101010101010101EQUIPMENTDOWNTIME0101001  0101010OPERATORGENERATEDDATA10111010101010  10101010101010010PRODUCTIONSCHEDULE1010101  0101OPERATORID01010101010101010101010101010  101010101010101010101JOBCOSTING010101010101  0101010INVENTORY011010101010101010101010  1010101010101010101010PROCUREMENT101010101  0101MACHINESTATES01010101010101010101010  101010101010101HISTORICALPRODUCTRUNDATA101  01010101PRODUCTID01010101010101010101010  101010101010101001REALTIMEDATASTREAMS010101  01010101FINANCIALDATA01010101ERP101010101010  

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Manufacturing Operations Management Connected Manufacturing Model Work Order Scheduling and

Results Reporting Direct To / From ERP

Connecting the Shop Floor to the Top Floor affords many benefits such as Product production lifecycle visibility,

Accurate scrap and reject counts, Actual v. Planned production time, Costing, capacity utilization, etc.

Evidence Based Real time data collection at each machine and

Discrete Process on the shop floor

Drives all facets of Manufacturing Operations Management such as Scheduling, Costing, Root cause

analysis, On Time delivery, Production Efficiency, process

visibility, etc.

Process Improvement , Benchmark Analysis, Corrective Action, Repeat

Data collected can identify constraints and

drives the circle of continuous improvement and lean process changes, leading to greater

efficiency and profitability, affords immediate corrective action and vetting of results quickly,

objectively, and sustainably.

Cost containment / Reduction - Ongoing

Drive costs out of the manufacturing process, leading to higher capacity utilization and higher profits for the same level of effort.

WIP, Raw Material, Valuable Tooling, and Finished Goods

Tracking with RFID & ERP

Allows real time visibility of WIP, Raw Material, Specialized Tooling (Jigs and Fixtures), and Finished

Goods to all stakeholders via upload to ERP, and visibility in MOMS /

MES system

Horizontal & Vertical Integration

Vertical: Shop Floor To Top Floor, Integrating and optimizing all equipment and processes,

from machine sensors to the ERP system. Horizontal: Across the Complete Plant,

Integrating, communicating and optimizing the production operations. 16  

WHAT is the “Connected Factory”?

•  Increase throughput through collaboration and “Evidence Based Data” collection and review, feeding a culture of continuous improvement.

•  Increase awareness and visibility of equipment and personnel, leading to increased utilization of these important assets.

•  Increase Income From Operations (IFO) sustainably and objectively, for the short, medium and long term, 20% to 60%.

•  To develop AND maintain a leadership role in Manufacturing, adopting cutting edge technology and best practices to stay ahead of the curve, whatever the challenge(s).

©  2013  Memex  17  

WHY Create a Connected Factory?

•  Involve and empower the Operator by giving them the tools to be part of the solution, instead of simply pointing out there is a problem.

•  Initiate and sustain a culture of teamwork as it relates to continuous improvement by delegating resources, setting achievable goals, and vetting progress regularly, adjusting goals upwards over time.

•  Adopt technology that connects the top floor ERP system to the shop floor asset(s) (equipment and personnel) bi-directionally, affording unparalleled visibility and transparency of shop floor processes.

ERP  

SHOP  FLOOR  

©  2013  Memex  18  

HOW Do You Do It?

•  With a 10% to 50% sustainable increase in capacity utilization, which translates into a significant increase in IFO, companies who adopt the philosophy of the connected factory experience investment returns usually measured in months.

•  Utilizing a proven solution, and with management setting the course for systemic cultural change, the risk of project failure is virtually eliminated.

•  The time is now….. Money is being left on the table (locked / lost in the past) each day that the connected factory remains a concept, not a reality.

©  2013  Memex  19  

WHEN Do You Do It?

•  Identify Constraints •  Production Counts •  Scrap & Reject Counts •  Run/Cycle Times •  By Shift, work order, product

•  Improve Throughput •  Hidden capacity

•  accurate start/end times •  uptime analysis - cutting/idle •  breakdown analysis

•  Quality improvements •  Increase Profitability

•  Focus on bottleneck throughput

•  Accurate data allows for Improved employee decisions

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Where are my bottlenecks?

How can I improve my bottom line?

How can I produce more?

3

1 2

If you can MEASURE it – then you can MANAGE it

TOC = Theory Of Constraints

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TOC Productivity Analysis

•  Improve Uptime •  Minimize Downtime due to unforeseen breakdown •  Predict when a machine will fail •  Online diagnostics for machine up and running faster

•  Reduce Costs •  Embed Maintenance Records & Alerts

•  Improve Profitability •  Analyze uptime for hidden capacity •  Identify Bottlenecks to improve throughput.

•  Improve Quality •  Links to Quality Control •  On machine inspection & In-line Correction

•  OEE (Overall Equipment Effectiveness) •  = Availability x Performance x Quality •  = % Utilization x % Std Rate x % Yield •  Shows group or plant output as a % of maximum

capacity •  World Class = 85% (= 95% x 95% x 95%)

85%59%

0%

20%

40%

60%

80%

100%

TheoreticalAvailability

ActualAvailability

UPTIME ANALYSIS

MaintenanceSetupIdleFeed HoldDial BackProductive

Maximize Equipment Utilization, Maximize

… Is there more? “Gut Feel”

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Find Your “Hidden Factory”

•  Production improvements in the 10% - 50% range* •  Financial Profit - EBITDA

•  10% Operational improvement •  20-60% Profit improvement •  Sales @ current & full capacity

•  Breakeven ROI in < 3 months

•  Real-time machine visibility + OEE numbers •  Operator Productivity increases •  Reduce Downtime •  Minimize Rejects, Improve Quality •  Root Cause analysis •  Value stream analysis •  Labor productivity tracking •  Benchmark scheduling & value streaming

21%  

62%  

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The Big Data Value Proposition

Three Manufacturers That Leveraged Their Big Data and Won •  Héroux-Devtek •  Mazak •  Magellan Aerospace

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Case Study: Héroux-Devtek •  Challenge was to increase efficiency in all areas of machine productivity, wanted

solution to be implemented across all manufacturing plants in North America

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•  MERLIN has now become the corporate standard across 10 Plants

RESULTS: •  Operating at a 90% increase in OEE –

a huge competitive advantage •  Revenue has increased, expenses

have decreased •  Saved on buying new machines – able

to utilize existing assets with improved results

Case Study: Magellan Aerospace •  Pilot installation of MERLIN on 3 machine assets in one plant that may lead to new

corporate standard (600 machines across 14 plants)

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•  $20,000 investment in MERLIN resulted in $480,000 of additional production in the first year

•  Breakeven: 20 days

•  MERLIN identified idle time to its root cause and converted it back to production

RESULTS:

•  Magellan increased revenue per asset and margin per part.*

* Published in Plant Engineering Maintenance Magazine, April 2014

Case Study: Mazak •  Mazak is the world’s #1 machine tool OEM, a 100-year-old Japanese manufacturing

company and from the CEO on down committed to data-driven manufacturing

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•  MERLIN installed in Mazak’s 800,000 FT3 plant in Florence, Kentucky

•  Originally focused on achieving

productivity improvements of 1% •  In April 2014, Mazak published a 42%

increase in utilization of equipment RESULTS: •  Mazak has MERLIN on its price list.

MERLIN critical to Mazak’s iSMART Factory Initiative and a new offering called SmartBox with Cisco

Maximize Equipment Utilization, Maximize

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Financial OEE

FOEE = ratio of Current Profits (IFO) at Current OEE relative to Theoretical Profits at World Class    

Shop Floor Financials

MT/OP  

Financial Overall Equipment Effectiveness (FOEE)

MTC   MES   Financial  OEE   Shop  API   Prod/WO   ERP/Assets  

0101PRODU

CTIONRDATA101  

0101SHOPFLO

ORDATA101  

0101COSTIN

GRDATA101  

0101OPERATO

RDATA10

1   0101REALTIMEDATA101  

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Turn Big Data in manufacturing

into BIG dollar$

•  Connected manufacturing exists today!

•  Data relationships exist today on your shop floor that can be translated into increased productivity and profit$ right now!

•  Your challenges in collecting and context-ualizing Big Data are not unique, they are similar to other MFG businesses.

•  There is a path forward and a proven solution!

Connected MFG Model

•  The last metre problem has been solved. Data can be cost effectively collected from ALL

MFG equipment and processes!

•  Metrics require data to function, real-time data is the most accurate!

$ummary: IIoT Innovation is Achievable

$$$  

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Merci! Questions? David McPhail | 905-635-1536 | davem@memex.ca www.MemexOEE.com

MEMEX Inc. (TSXV: OEE)

OPTISaw Montreal 29