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Yanfeng pushes ahead on Industry 4.0


Chinese-U.S. joint venture Yanfeng Automotive Interiors has put some serious work in to building Industry 4.0 capabilities over the last two years.

The global auto components supplier has many motivations for jumping in, including requirements from customers and a desire to better deal with shortages of skilled labor around the world, including in China.

A senior executive developing the company's Industry 4.0 programs talked recently with sister publication Plastics News Europe. A key early decision was to centralize implementation, he said.

"We needed to put the topic very high on the agenda, above the functional silos to overcome friction and disputes about cost allocation, among other things," said Michael Schachler, executive director of operations and global lead Industry 4.0 transformation at Shanghai-based YFAI.

The company, which is 70 percent owned by Yanfeng, one of the largest automotive suppliers in China, and 30 percent by Plymouth, Mich.-based Adient, also decided to start implementation in its production departments, a decision driven by the Chinese partner, he said.

"China is already grappling with a dramatic shortage of skilled laborers," Schachler said. "They are very consistent in implementing the highest standard of MES [manufacturing execution systems] and shop floor automation."

"They have an extremely high level of automation, integration and collaboration and are therefore highly efficient," Schachler said. "Their labor productivity is higher than in Europe, and they work with very highly skilled and motivated people."

Historically, the company followed a decentralized approach to implementing digital technology, with each department largely going its own way, he said: "As a result, point solutions evolved, creating disconnected data."

YFAI, which has 33,000 employees in facilities in 20 countries, worked with the Boston Consulting Group to help develop its 4.0 plans, and that firm provided a framework.

"They also identify the key challenges to a company's operation and provide exhaustive examples, 'use cases,' for implementing advanced automation technology," Schachler said. "It was extremely helpful, as it gave us a complete, working picture of what it could look like holistically and helped in prioritizing the 4.0 areas to be focused on going forward."

MES solutions were key, and the company did a data-based prioritization of MES functions, he said. It's also had to work to build links between different MES systems within the company.

"We have more than 100 systems in operation that cover MES-type functionality. It's the connectivity that's the problem," Schachler said. "Everyone is already digital. What happens is that we take out old systems and replace these with new ones that are connected, connecting feedback loops for faster execution and better decisions. This is a virtual revolution, not a digital revolution."

Another hurdle is the risk averse and conservative nature of the plastics industry, as well as having to deal with stringent compliances issues in sectors such as medical or automotive manufacturing.

While customers sometimes push the technology, regulations and customer requirements can also sometimes inhibit implementing new technologies.

"Once the customer has signed off, any process change would require revalidation and corresponding cost," he said. "So not much can be done once a production program is launched."

Essentially, what this means is that the implementation of 4.0 technologies occurs either in greenfield projects or when installing new lines, instances where the company can start from scratch.

"It is difficult to completely overhaul brownfield sites to be integrated at all levels," Schachler said.

YFAI established four lighthouse plants, which serve as pioneers: two in China, one in Luneburg, Germany, and one in Belvidere, Ill.

"The latter is wall-to-wall MES, a highly automated plant, where very contextual instructions are provided in time for every production step, so that everyone can work with it," he said.

YFAI production lines are replaced roughly every seven years as the customer's car programs are changed, and eventually all the old lines will be replaced based on the experience gained from the lighthouse plants. Once the lines are integrated, the hall will follow and then the plant.

"We don't have the capacity to replace everything at once," Schachler said.

As the lighthouse plants function somewhat as applied automation laboratories, other rules apply, as well.

"They can take slightly longer to prove themselves, and the new technologies are given a little bit more time than the regular investments before they have to turn a profit," he said.

While Schachler said the homework to implement was more than anticipated, he said the company has seen tangible benefits, such as with automation not being so much in silos.

"Now everything is being integrated. The next step will be artificial intelligence," Schachler said.

The costs were slightly higher than originally anticipated, and "the learning is still there; we are still facing challenges," he said.

Schachler said the workforce has responded positively, with workers seeing the investments as validation of their value to the company.

"The lack of qualified workers, absenteeism, the costs of poor quality are huge problems that we want to address with a higher level of automation," Schachler said. "We are not destroying employment. It is challenging to find people to do simple physical work eight hours a day without fault."

The labor shortage is an issue at all levels, he said: "There's a war on for talent. Any way we can make this issue more manageable, we will."


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