A new survey of nearly 1,000 Canadian manufacturers, including several in the auto industry, finds those that invest in digital production boost productivity and save in operating costs and maintenance.
Business Development Bank of Canada surveyed 960 leaders of Canadian manufacturers with 10 to 499 employees. It found that 39 per cent of Canadian manufacturing businesses have started to implement digital projects as part of Industry 4.0 – the next phase of the industrial revolution – which is described as the trend toward combining automation and data exchange in manufacturing technologies.
Industry 4.0 includes:
- Using the internet, wireless sensors, software and other advanced technologies work together to optimize the production process;
- Adding internet-connected sensors to products that allow manufacturers to monitor their performance and provide information to customers, such as when parts need to be replaced;
- Offering customers the ability to customize orders online and see the progress of an order in real time and;
- Monitoring and controlling machinery and equipment in real time.
BDC found that 60 per cent of businesses that adopted digital production said it helped boost productivity. Almost 50 per cent said they saved on operating costs.
Digital production and higher automation can save on labour costs and improve on throughput, the amount of material or items passing through the system or production process.
"Our study clearly demonstrates that it pays to embrace the digital shift. The Canadian businesses that have been early adopters of digital technologies have increased their productivity, reduced their costs and improved the quality of their products,” BDC Chief Economist Pierre Cléroux said in a statement.
AGS Automotive Systems is a Canadian auto parts maker with four facilities in Canada and two in the United States. It’s already using high-tech sensors, monitors and data mining in its manufacturing. It plans to soon use 3D printers to develop prototypes for customers.
AGS Co-President Joe Loparco said digital production has huge benefits in areas such as production targets and optimizing equipment performance and preventative maintenance.
“The cost savings and productivity gains can be enormous,” Loparco said in a statement. “Automotive is a high-volume business. So every time you can flush out an issue an hour earlier than before, you’re saving big money. And if you can flush it out days earlier, you’re saving really big money.”
But according to BDC’s data, Canadian manufacturing generally lags behind the rest of the world when it comes to investing in digital production.
The majority of Canadian small and medium-sized manufacturers have invested less than $100,000 in digital production in the last two years compared with an international average of $261,000.
“The auto industry has done better, and that’s allowed us to focus and invest in this area right now,” Loparco said in a statement. “The technology is more affordable, user-friendly and robust.”
BDC found that 42 per cent of Canadian manufacturing businesses “have not yet initiated their digital shift.”
“These businesses will be at a disadvantage against their competitors,” Cléroux said.