BCG: the future of factories with AI
All over the world, companies are explor...
Supply Chain Digital discovers which industries are at the forefront of artificial intelligence (AI) adoption.
All over the world, companies are exploring the possibility of applying innovative technology into their operations, in particular organisations are striving to deploy the right combination of AI technologies to boost their efficiency and flexibility, as well as accelerate their processes and optimise their operations. Analysis has found that AI can reduce producer conversion costs by up to 20% with 70% of cost reductions resulting from increased workforce productivity.
In a recent study conducted by BCG, it was discovered that 40% producers expect AI to become crucial for improving productivity by 2030, while 29% consider it to be crucial for productivity today. Many industry leaders expect AI to transform end-to-end processes including engineering, procurement, supply chain management, industrial operations, marketing, sales and customer services.
The use of AI in operations:
Machine vision - sense production environments with visual, x-ray, or laser signals
Speech recognition - processing speech and acoustic signals
Natural-language processing - analysing text and interpreting its most probable meaning
Information processing - extracting knowledge from unstructured text as well as retrieving answers to queries
Learning from data - predicting or classifying values based on empirical production-related data
Planning and exploring - choosing a sequence of actions that maximises a specific goal
Speech generation - communicating with humans via written text or acoustic speech
Handling and control - manipulating and picking objects
Navigation and movement - moving through physical environments
With these use cases in mind, 37% rank production as the area in which factory operations will best benefit from improved productivity as a result of AI, while 25% highlighted quality and 12% picked logistics. Maintaining the consistency of the findings, industry leaders also regarded self-optimised machines, the ability to detect quality and predictive technology to be the most important uses of AI. Looking at each use case for AI, statistics ranged between 81% and 88% among industry leaders in regards to their importance by 2030.
Overall the study revealed that the transportation and logistics (21%), automotive (20%) and technology (19%) sectors are currently at the forefront of AI adoption, while process industry are lagging behind. This has been said to reflect the different expectation of the benefits that AI can provide. “If they are to achieve their ambitions for AI, industrial producers must significantly ramp up their implementation efforts.” The study details that the implementations of AI have not kept up with the pace of expectation due to the lack of four core pillars: strategy, governance, relevant competencies and a supporting IT infrastructure. Although 87% plan to implement AI into their operations, only 28% have a comprehensive implementation road map, the rest lacking detailed plans.
Study facts and figures:
Type of participants: executives and managers
Sector: automotive, consumer goods, energy, engineered products, health care, process industries, transportation and logistics, and technology
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.
Image source: BCG
Grupo Espinosa: 70 years of constant evolution
Founded in 1952, Grupo Espinosa has been relentlessly supporting the publishing industry with producing more than 100 million copies every year – whether its books, magazines, catalogues or single-order custom prints. No project is big or small for Grupo Espinosa, as the facility can scale up on demand and their turnaround times are highly competitive. Grupo Espinosa works with on-demand digital press or offset press, in paperback with glued softcover binding, PUR softcover binding, stitched paperback binding, binder’s board, hardcover, saddle stitched, Spiral or Wire-O. Equipped with the experience needed for a product to leave the plant ready for distribution, Grupo Espinosa delivers anywhere inside or outside Mexico. Traditionally starting off as a black and white printing press, Grupo Espinosa has experienced transformation first hand – from colour to digital offset printing. Currently, Grupo Espinosa is also looking at making capital investments into audio books to match with the increasing demand.
So how did a seemingly local operation in Latin America become a world-renowned printing facility trusted by hundreds of clients? As Rogelio Tirado, CFO of Grupo Espinosa for the last six years says “It all comes down to our market experience and our dedication to quality”. With nearly 70 years behind them, and located in Mexico City, Grupo Espinosa has two major locations – one spanning 75,000 square metres and the other about 45,000 square metres. Both locations are controlled by a single ERP (Enterprise Resource Planning) system ensuring speed, consistency and quality of work. Tirado says this isn’t their only competitive advantage. He adds “Our competitive advantage is the relationship we have with customers and the trust they put in us with their intellectual property”. Speaking of trust, global publishing giant Macmillan Education exclusively partners with Grupo Espinosa for their Latin America operations, as part of Macmillan’s decentralized hub strategy. Having a facility that offered the full spectrum of service – from storing digital content to printing and distributing – was one of the major requirements for Macmillan, and Grupo Espinosa was recognized as the leading printing hub for providing this 360 infrastructure. Another factor that has led to success for Grupo Espinosa is the absolute focus on quality and time. The staff are committed to providing the best quality in the best possible time, without causing wastage of resources. Sustainability is a huge factor playing into Grupo Espinosa’s operations, and they’ve created a healthy environment with the sustainable use of paper and energy resources as well as keeping their employees – most of them associated with the organisation for over 10 years – happy. He adds, “In order to be truly successful, you need to be good to the environment, employees, suppliers, and your customers. But most importantly, you need to be sustainable, you need to have proper working conditions, pay proper salaries, proper prices for paper, source the paper from sustainable sources, pay your taxes, basically be a good global corporate citizen and that's probably one of the biggest achievements that we have.”