Digital Factories Update

Mitchell Smith: Hello, everyone. My name is Mitchell Smith, I’m a technical consultant at aPriori, and I work in the implementation services here. Today I’m going to be going over a session on the advancements in Digital Factory training for advanced manufacturing. What we’ll do today is I’m first going to start with a quick introduction, explain what a digital factory is, what the Digital Factory Manager is, a specific use case and initiatives that you could use it for, I wanna go over the digital factory overlays. So talking about what an overlay is, how inheritance structure works in aPriori, and lastly, I’m gonna connect this all to a sourcing case study for specific use in aPriori, we would use the digital factory for that sourcing case study. From there, we’ll get into managing materials, so how you can add materials. We’ll talk about material factors, how you can actually apply certain factors to adjust to the material cost based off your purchase volume. And lastly, we’ll talk about wage grades, so how you can work with wage grades in aPriori, when you’re trying to adjust labor rates globally. We’ll end with some questions. So getting into that first section, the introduction to overlays and that sourcing case study.

Automation and the Digital Factory Manager

MS: So first, just want to answer the question, what is the Digital Factory Manager? Well, Digital Factory Manager is used to adjust data. You could modify, add or remove data, and when you save that data it will apply to all users within your aPriori environment. A little workflow of how you could actually use the Digital Factory Manager really starts with the assumption that we are already leveraging the aPriori should costs. So here I’m going to assume that a user of the Digital Factory Manager has been using aPriori, he or she has been getting aPriori should cost out of the aPriori system. And then we can use these should costs from aPriori with our suppliers. So this is tied into that sourcing case study. So based off the data you get from should costs, you’re now confident and comfortable going to your supply chain ecosystem to understand what their quote is for a certain part versus the aPriori should cost. And you’re just trying to understand what the gap is. Through these conversations, you’re able to get and extract pieces of information from that supplier. This can be things like the material unit cost that they’re assuming. This could be the labor rate on their machines, etcetera.

MS: When you get those tidbits of information from your suppliers, this is where you could use the Digital Factory Manager. So now that you have that data, you would enter it into the Digital Factory Manager for a specific digital factory that you’re trying to update. Once that data has been entered in a Digital Factory Manager, automation makes it now globally available. So one person has entered it, then assuming the Digital Factory Manager has, and now that’s available for all users within that aPriori environment. We have a little bit of a loop here. So now you can go back to leveraging aPriori should costs, go back to your suppliers and maybe you get a new tidbit of information, re-enter that in aPriori’s Digital Factory Manager, and again, making that globally available for all users within that aP environment.

Digital Factory Overlays in aPriori

MS: Let’s talk a little bit about the digital factory overlay structure. So first of all, what is an overlay? An overlay is a custom digital factory that has been created with a specific inheritance structure to allow for simple digital factory updates that populate to everything that is inheriting that same digital factory. So just wanted to break down what these different template digital factories are and how an overlay is set up. This is going to connect to the use in aPriori because there are dedicated digital factories where you want to update tidbits of information.

MS: But first of all, we have the logic template digital factory. Each box that you’ll see in this chart represents its own digital factory. In this case, we have a custom customer cost model template. This is a stand-alone digital factory that is just looking at logic, think backend calculations like cycle time, piece part cost, material cost, etcetera. And all of this is done in the cost model template. Next, we have specific template digital factories for machines and material data. So it’s gonna be split up into four different template digital factories. The first three we have are material databases. So the custom customer materials database world average represents material costs on a more world average base. Next, we have the materials database for Asia, and then the materials database for Europe. And these are all their own digital factories that are representing different material costs continentally. And the last one we have is a machines database. So this is typically a global machines database that just inherits and is used for machine data.

MS: Think certain limits, the size, the footprint of a specific machine, this is where that information is stored. Next, we have economic and tool shop data. So these are regional, this is regional information that may change depending on the region that you’re costing with. So this information is pulled directly from our aPriori RDLs, regional data libraries that represents things like labor rates that may change on a region to region basis. And then pulling this all in, this is where our overlay or costing digital factory is then created. So all of these template digital factories are inherited into a custom customer overlay. So depending on the region, we would want to inherit a different materials database and a different economic and tool shop data RDL, but these are building up an inheritance structure to try to make it specific to where you update certain information.

MS: Breaking this down a little more into one direct example, here we have similar but we have those three template digital factories as well as our aPriori RDLs that are all being passed into our costing digital factory or our overlay. In this case, we have our customer American digital factory or overlay, and it’s inheriting the logic information, material data and machine data from those three template digital factories, as well as the economic and tool shop data from the aPriori RDLs.

Next Generation Digital Transformation

MS: You might be thinking this is a lot of… We have five digital factories here that are being passed in as information for one digital factory that seems like a lot, but this is really powerful when we start to have multiple overlays. So let’s take an example where we actually have six different overlays in the USA. So we have a customer, Mid-Atlantic, USA Central, USA Mountain, USA Northeast, USA Pacific and USA Southeast. We have six overlays that we can cost with, and this digital factory inheritance structure remains the same with the template factories we’ve created. So now your logic materials database and machines database are still being passed in to these six different specialties overlays. The only thing that is going to change is the economic and tool shop data, which we would expect. There might be slightly different labor rates between the region that you’re costing in, in the USA. As we go down here and we can see again, all of this inheritance structure is staying the same, other than the economic and tool shop data which we expect to change. Optimization is very easy in these template digital factories, and then anything that’s changed in this one digital factory is inherited by all six, so we only have to update that in one location.

MS: You can also see this in aPriori main UI when we get into the Digital Factory Manager. In your cost guide, we have the customer USA Northeast, if you open that up in the Digital Factory Manager, we break out this inheritance structure. And so in here we can see that cost model, customer cost model template for the logic, the materials database world average for material inheritance, aPriori RDL for economic and tool shop, and then we have that machines database for the machine inheritance. This will become important as I’m going through certain demos and information of how we update digital factories, because I’ll be updating these template digital factories.

How Sourcing Stakeholders Use aPriori Digital Factories

MS: So tying this all back into that sourcing case study. So as a company, you have six suppliers in the US, those are the six that I just showed, Mid-Atlantic, Central, Mountain, Southeast, Pacific and Northeast. The sourcing, a sheet metal part that is a galvanized steel, ASTM A642, this is a material aPriori does not have all of the box, so this is a test material we’d be needing to add. We have an annual volume of our first year production at 50,000, and then we’ve reduced that in our year two to 12,500. And we know we need to make this in the USA. By leveraging aPriori should cost, you’ve reached out to your suppliers and the supplier in USA Northeast has given you the material cost for year one production and their labor rates for their machines. So you have some data points that you’re looking to add. But what happens to the material cost as your annual volume changes? We’re significantly reducing that volume between year one and year two, so we would expect that material cost to change as we are buying less. And then lastly, how do we input this in aPriori for everyone to use? We’ve gone to our supplier, had conversation, they’ve given us useful information that we want to make globally available for everyone. This is where that Digital Factory Manager becomes very powerful to update that for an entire aPriori environment.

MS: So, we’re going try to tackle these tidbits of information one by one. So we have a new material, that galvanized steel, ASTM A642. The first thing we’re gonna wanna do is add that material into our Digital Factory Manager. A couple of things to know when you are adding materials is first the process group. So material information is specific to a process group or commodity in aPriori, so you’ll need to add this on a process group level for any custom materials. Second is the data, so custom materials require the user to input the data. Anything that aPriori does not have will be on the user to input that information. Third is the digital factory selection. So I went through the overlay inheritance structure. So we wanna make sure we’re adding the information to the correct digital factory so that it is then inherited by all of the same or similar overlays in that region. And then lastly is just to make sure we publish. So all changes that you make in that Digital Factory Manager do need to be published and saved for all users to have access to that new material. Quick note on the data section, if you do have multiple materials that you’re trying to load at once, anywhere from 10, 20, 30, etcetera, we do have the ability to upload in bulk with Excel spreadsheets via CSV.

MS: But for this example, I’m going to show you how to add this one material through the main UI. So we have our material, ASTM A642, galvanized steel. Our supplier has given us a unit cost of 223 per kilogram based off the year one volume of 50,000. This equates to about 10 tons of material you’re buying in that year, so this is a high volume pricing that we would want to use. We also notice that aPriori does have some galvanized steels out of the box, so we’re going to utilize similar mechanical properties, comparable to the out of the box ones to make this a simple addition to the digital factory. So getting into aPriori, we have our sheet metal part that we are trying to source.

MS: And we’re adding a new material to the digital factory. So to get there, you go to Tools, Digital Factory Toolset. When we select Digital Factory Manager, we also want to open up the customer materials database world average, that’s the material base that is being inherited by all of our overlays. So adding it to this one digital factory will then allow that to be used in all digital factories for the USA. Within our Digital Factory Manager now, we wanna navigate to the sheet metal process group, this is a sheet metal part, and then we’ll select our materials folder. And here we can see all of the aPriori out of the box materials. To add a material, we’d wanna right click on that materials section and then add material. A pop-up will come up asking us for the material name. Here we have that galvanized steel speck, so we’ll enter in galvanized steel ASTM A642. From here, we wanna select a material cut code, this is a little unique to aPriori terminology, but the cut code is referencing what type of material is this. Next, we have two options that you can select from, you can define the material type yourself, is this aluminum, aluminum LLA, steel, etcetera.

MS: We have a number of options, or you can choose a source material. Selecting a source material will copy all of the inputs. The other thing you can do is keep… Include all stocks from that source material, so if any material does have specific sheets or stocks for machining, you can copy over all of those physical sheets or stocks as well. In this case, I’m going to opt to include all the stocks from the source material as well. Once you click okay, you’ll see that be populated automatically. So we have galvanized steel, A642 and the source material is that 1020 that I’ve selected. As you go through here, you can see that the properties for our new material are being pulled directly from that 1020. There are a couple of things I will wanna change because they are not the exact same, first one being that unit cost. So our supplier has given us a cost of 223 per kilogram, so that’s gonna be the first thing I change. Next, I’m going to change this data source, so you can see everything is an aPriori base line. But as we start building our own materials database, I’m gonna tag this as a custom material that’s been added. So for this example, I’m just going to add custom material.

MS: Once you’ve entered that information, you go ahead and save the digital factory in the top left. After that’s been saved, we can exit out of here and go back into our aPriori main UI. So my digital factory I’m using is that customer USA Northeast. I’ve updated a materials database with the inheritance structure we have set up, and we’ll apply it to this digital factory. I’m gonna go to my material selection, now we have that new material, A642 galvanized steel with that updated unit cost based off our supplier, and we can see that tag has also been pulled through for that data source. And we go ahead and re-cost this part and we are expecting a new material cost, one of 223 rather than that 151 that we have. Again, as we are costing this, we’re using our USA Northeast, but this has been applied to all of those six suppliers that we have in the USA.

MS: So we’ve successfully added this material. We’re done with that first tidbit of information that we needed to get in there to represent this costing. Next, I want to talk about material factors. Material factors can be used to adjust a material cost depending on the volume at which you’re buying. A couple of things to know about material factors is exactly that when aPriori costs a part, it adjust the material unit cost to account for the following of the volume of material purchased, and there’s a specific factor applied to that volume. So that’s that first section we have here. In aPriori, we have two by default, so we’re assuming a half ton of material and a 10-ton purchase volume for our sheet metal process group. The pricing we got for that first example was based off a 10-tonnage 50,000 annual volume parts.

MS: The next thing to know about material factors is the hierarchy. So a user can alter a material factor on different levels of the digital factory. So whether you’re trying to just adjust a specific stock of a material or a specific material with all the stocks, you can add purchase volumes and material factors to an entire process group, or you can add it to an entire digital factory. And depending on what level they’re trying to add a material factor, you can do so in that hierarchy form. And then lastly, we have a digital factory selection. So again, just highlighting here with that overlay structure, this is material information, so we’d actually be wanting to update this information in that same digital factory that we added our material. So in this example, we had a material cost of 223 that was based off a purchase volume of 10 tons, that year one annual volume of 50,000. With our year two volume, we have reduced that to 12,500, about a quarter of what our year one volume was. So though the supplier giving us that new material cost, we can still try to reflect that in aPriori using material factors. So we are going to create a two and half ton purchase volume, since we’re reducing that by a quarter, we’re gonna apply the material factor of 1.85x of our 2.23.

MS: Jumping back into aPriori, we now have… We now want to go to our Digital Factory Manager for this. In the material itself, we have purchase volumes already, so this 10 and a half ton is what is adjusting our unit cost of 23. So we do have half-ton material costs that we could use, but in this case, that’s a little too low, so I think that would inflate our material cost too much. You can see that change to 5.236 as we change that purchase volume.

MS: So here, I’m gonna go to my digital factory tool sets, I’m gonna open up that Digital Factory Manager, I’m gonna go into that same digital factory, the material database world average to add our new material factor. This is gonna be located here top, we have material factors, our own section for that. We have our customer materials database, and as we actually start expanding down this tree, this is where you can see that hierarchy structure I was referring to. So right now on the top level digital factory, we have a purchase volume and purchase factor related to this digital factory, so that half-ton and 10-ton we saw in the UI, we can see our half-ton as a 2.35 purchase factor related to our 10-ton unit cost. That 10 ton has been selected as the default, as you can see, and that default has been checked off. So any material cost and material we’re costing with is assuming a 10-ton purchase. For this example, I’m gonna go to my sheet metal process group and I’m going to add a new value.

MS: And here I’m going to add in that purchase volume of 2.5, again, this is in tonnage, so 2.5 tons and we’re going to assign the purchase factor, so that multiplier to 1.85. And this is going to be scaling the materials for sheet metal based off of the 2.5 volume and 1.85 material factor. We can see that’s now been have our half-ton and 10 ton that still remain since it’s been defined higher up, but for specifically sheet metal, we’re adding 2.5, so this is going to be a process group change. Once that information has been inputted, we can go ahead, save our digital factory. Once you publish that and it’s been accepted, we can exit out of here and go back into our material costs. We can see our volume has been adjusted to 12,500, and now we can select on that material, we have our unit cost of 2.23, but now we have a new purchase volume which is associated with that material factor to 2.25.

MS: Now it’s scaled to 4.125. It should be a better approximation of the amount of material or purchasing and how our unit cost would reflect that. So as I re-cost this I’m expecting my overall cost and material cost to go up. And you can see that is reflected in our cost suddenly, our previous 0.4 to 0.74. So now we’ve accounted for our material cost with a new volume using material factors. Last thing I want to cover is working with wage grades. Wage grades help you manage the labor rates associated with the various machines in a process group. You can assign the same wage grade to multiple machines at once, changing the labor rate associated with all of those machines. A couple of things that go into working with wage grades. First is our skill levels. So skill levels is a global change that is adding what is the required skill to operate this machine. In aPriori, we have a skill level chart already, we range that from one to nine, one being very easy to operate, nine being requires expert level skills. And as your skill level goes up, you expect that labor rate to go up.

MS: The second aspect is the industry sectors or wage grades themselves. So you can adjust or create wage grades specific to a supplier or region based off the skill level that’s been created. Once you’ve linked your wage grade labor rate to a skill level, you want to now associate that wage grade with a manufacturing process. Is this wage grade reflective of a fiber laser cut, a bend brake, etcetera? So we now need to tell aPriori in the Digital Factory Manager, where is this applied. Then lastly is the digital factory selection. So we want to ensure that the change is made at the correct digital factory. In this case when we’re working with these different pieces, skill levels will be a global change. So we want to add a skill level that’s then inherited by all digital factories so we can utilize that.

How Cost Models Affect Digital Transformation

MS: So this will actually be done at the cost model template level. The wage grade itself will be done on the overlay level. So the specific region. We think about labor rates, that is a very region dependent piece of information. It is tied to a machine, but we will not be adjusting that in the machine template or the machine database because all that one is interested in is machine information. Things like the size of the machine, the limits outta which it can produce, etcetera, not necessarily the labor rate. That is more an economic and region specific change. So tying this into our last tidbit of how we want to update this. We have collected the supplier material and the material cost and have updated the digital factory accordingly. They have now shared the labor rates for the machines that they’re making this part on.

MS: So they’re using a bend brake and a fiber laser cut, both with a labor rate of $51 an hour. Just with this information, we could technically go into aPriori and override on a scenario by scenario basis to reflect that. But rather than doing this and overriding the scenario, let’s add this to the digital factory so that it’s available for all users and they don’t need to have their own conversations or reach out to different people to find out this information. So going back into this example, we are going to go back into our digital factory toolset. First thing we’re gonna wanna do is add a skill level. So we’re gonna define that in our cost model template. Again, this is a logic change that we want to have inherited by all other digital factories, so we’re gonna open up our cost model temple. We’ll find a skill level section in aPriori. Again, we have a chart already that machines are based off of from a zero to nine scale, and the skill level is representing how easy or difficult or how many skills are required to operate.

MS: I want to add a new skill level. I’m going to right click on the skill levels and add that new skill level. My skill level is going to be a numeric value. I’m going to add this as 50. The skill name is going to be the customer skill level. This could also be the supplier skill level. And then my skill description in this case, I’m just gonna keep this as a custom description. So this should be very obvious. This is a custom skill level. This is different from aPriori out of the box.

MS: We’ll want to publish this change in the cost model template. So again, all of the digital factories are now inheriting this skill level and we can link it to a labor rate. From here, this skill level is now going to be associated with a wage grade. Again, wage grades and labor rates are region specific. So we’re going to want to make this change in the specific region itself. In this case, I know my Northeast supplier has given me this information, so I’m going to want to change it right in that overlay itself. We can see that skill level has populated through, through that inheritance structure. And now I wanna link this and create a wage grade based off this skill level. So industry sectors is where we controlled our wage grades. So all of those skill levels, we have a labor rate associated with it. You could have the same skill level for a different type of material you’re trying to do or different process. So a skill level of one can be applied to casting metal and plastic. This is separating those processes that are connected. So here in my world average industry sector, I’m going to add a new wage grade. My labor rate is going to be that information from the supplier, $51 an hour.

MS: I’m going to connect this labor rate with our skill level that we just created, 50. And our process type is going to be metal. We’re working in sheet metal, metal fabrication. So this is where we’re gonna want to type that metal. And you can see that’s been automatically included. Once that’s been added, we can go to now our sheet metal machines. Within our wage grade associations, this is where linking a wage grade, the one we’ve just created, two specific machines to use that labor rate. So this machine is being created with… This part is being created with a bend brake and fiber laser cut. Let’s go ahead and change our wage grade association to that new one we’ve just created, 50 metal. And for our fiber laser cut, we’ll have that same input for 50 metal. We’ll go ahead and publish and save these changes. Once that’s been saved, we can exit out of the Digital Factory Manager.

MS: Now, I’m gonna re-cost this part and we’re going to expect our new labor rate for this process to be using those labor rates we just inputted. So sheet metal, we have fiber laser cut and bend brake. We can see our current labor rate is 34.94. Those were the aPriori assumptions, and so we’re expecting this to go up resulting in a higher cost to manufacture this part according to our supplier and the rates they’re using. Now, we are arriving now at our increased and final should cost estimate for this part. So just trying to summarize what we did in this example. We are sourcing apart. We’re leveraging aPriori and we’re trying to update information as we go based off our supplier’s rates. So we’ve leveraged aPriori data. We’ve gone ahead and discussed with our supplier how they are quoting our part. And through those conversations, they’ve given us material costs and labor rates. We’ve entered this in the Digital Factory Manager. So we’ve added a new material, we’ve added a material factor based off our volumes and we’ve created a new wage grade to account for labor rates. In doing so through the Digital Factory Manager, we’ve published and made this information available to all users within the aPriori environment.

New Technologies, Digital Technologies, Digital Factories: Aligning with Your Supply Chain Ecosystem

MS: I want to summarize and recap what we did today. So the Digital Factory Manager is a very powerful tool where we can modify, add, delete and centralize database digital factories. Again, we’ve gone over adding materials, adding material factors and wage grades, but there is much more you can do within this Digital Factory Manager. The second thing I have here is this creates an efficient workflow for all aPriori users within your environment. There’s less manual overrides you have to check. By creating this in the Digital Factory Manager, all users are able to cost a part and worry less about the details. And the third and final piece is this is replicating and giving us the ability to replicate supplier factories as needed. As we get that information, this is streamlining our RFQ process so we are aligned with our supplier.

MS: Just wanna thank you for your time. I have a QR code here that will access our Digital Factory Manager survey and usage. This is gonna help us gather feedback to plan for future improvements to the tool. If you have any questions, please contact me at [email protected] with any questions. Thank you.