8 Signs Your Material Management Process Needs an Upgrade


Radu Diaconescu | VP, Business Development, Swissmic

Robotic assembly line

The heart of the electronics factory is in its machines. However, even the lines and factories with the smartest and most versatile machines rely on intelligent and consistent support received by the central processes to reach their maximum capability.

Material Management is one of the most critical processes for the success of an electronics factory. In the age of the 4th industrial revolution, many different components of increasingly smaller quantities must be procured, stored and then transported on the factory floor to wherever they are needed. The materials cost of goods sold (MCOGs) is between 75 percent and 85 percent for the average electronics product. There’s no doubt best practices in procurement and tight inventory turns helps electronics hardware companies compete in the marketplace, especially with launching non-unique devices where price and features/functionality drive purchase decisions over brand awareness.

In the environment of an electronics factory, the availability or lack of parts directly impacts what jobs can be run.  Additionally, the rate of production and related consumption of parts directly impact the production plan and aid in deciding a management policy such as overtime or time off. Manufacturing productivity can be increased if the supply of material runs smoothly and there is no shortage of material disruption.

This is not an easy task. Safety stocks, extended searching, material movement and material-related line stops are symptoms of weaknesses and missing tools in SMT-specific material management. The solution lies in integrated material flow solutions that don't just administer inventories, but actively support all material-related processes on the factory floor. Such smart material management tools deliver complete transparency from incoming materials to placement information and let you see where materials are located at all times. This gain in transparency reduces operator trips and material travel as components can be supplied where needed ahead of time. Any changes in order sequence is communicated in real time to the lines themselves, smart shelves, warehousing, etc. This information then makes it possible for an MES system to “order” just in time replenishment material. The result is a seamless material flow on the factory floor. A smart and integrated material management system generates tangible results by making the production agile and reducing the operations complexity.

If you see one of the following phenomena happening on your factory floor, this means that your process of material management desperately needs to be upgraded to Industry 4.0 standards.

 ▪ Lack of visibility regarding materials in storage and on the factory floor

If there isn’t enough transparency regarding the quantities and the location of material reels in a factory, this can lead to excessive buffers of materials.

 ▪ Mistakes during material issue/provisioning

There’s nothing worse than picking the wrong part number. This can ruin a whole production batch and results in significant costs associated with scrap of products, and rework costs as a best scenario.

▪ Inability to locate materials/partial quantities in setup preparation areas, on changeover tables, lines, etc.

If the material movements are not properly recorded and tracked, this can lead to a huge increase in the time it takes to locate the needed materials, or more significantly, missed customer deliveries.

▪ Material-related line stops

The delivery of material to the production line is too slow and inefficient and the production lines have to stop so that a certain reel to be found in the warehouse.

 ▪ Manual processing of printed order lists/bills of material

The lack of a standardized material labels leads to manual entry of parameters which in turn increases the incoming material processing time and decreases the efficiency.

 Placement machines not integrated, leading to major discrepancies between theoretical and actual stocks

If the production line is not properly integrated with the intelligent material management system, the actual consumption rates are not fed back into the system, therefore the actual level of stock of a certain part number is never known.

▪ Line staff must request fresh supplies manually

Without an automated system, line operators are continuously watching material levels, finding the appropriate stock location and retrieving or requesting the materials.  An automated system that monitors these levels and programmatically ‘orders’ them also eliminates the possibility of a part running out before being noticed (stopping your production) and also removes the time associated with these manual tasks – also freeing your operators to focus on improving machine performance and related process changes that will ultimately improve your production.

By using the Swissmic Agilink Smart Shelves, together with Aegis' FactoryLogix MES, your factory floor material flow becomes fully traceable, transparent and integrated with your production line. The benefits of using this bundled solution are:

  • Real time material management analytics. What materials are about to be needed on the SMT machines, what is the actual consumption rate of certain materials, is there enough stock of a certain material for the next job? These questions won’t bother you again.
  • Full traceability of materials on the factory floor. Seamlessly transfer the materials from the warehouse Agilink Smart Shelves to the Agilink Smart Mobile shelves and finally to the assembly line, without losing track of any movement.
  • Prevent errors and increase efficiency. Your employees will never pick up the wrong material reel ever again. More so, by scanning a certain BoM or work order, they will be able to pick up the exact materials needed, without wasting time searching for the needle in the haystack.

The Agilink Smart Shelf is the latest Industry 4.0 solution that combines the latest advances in IoT, AI and sensor technology to deliver a seamless material management solution for the smart electronics factory. More information can be found on http://swissmic.com or by sending an email to  [email protected]

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