13 Jan 2020

Lean Manufacturing Meets Industry 4.0

The increased demand for product customisation and shorter product life cycles have led to more complexities in the production process. Businesses operating in a high-mix, low-volume manufacturing environment, such as precision engineering (PE) companies, not only have to manage these complexities but also the costs that come along with it.

“It is not uncommon for a PE company to run 500 different customer orders per month but each order may be in small quantities ranging from 20 to 200 pieces per part. To optimise their profitability, the PE company needs to be able to quote the customer an accurate price, quickly and based on the optimal machine configuration possible for the lowest production cost,” explained Moses Tan, founder of LeanCost International, a Singapore analytics software solution start-up.

The software company provides manufacturers with accurate real-time product costing data for reliable product pricing decisions and to manage their cost reduction programmes. It was looking for a potential partner to further co-develop and integrate its technology into a manufacturing execution system (MES) for a complete ready-to-go solution.

Through IPI and the Singapore Precision Engineering and Technology Association (SPETA), LeanCost International was connected with SMT Technology, a local SME which provides industry 4.0 solutions for the manufacturing sector in May 2019. As a technology partner of SPETA, IPI introduces emerging and relevant technologies to the members of SPETA.

Recognising the benefits of leveraging each other's complementary strengths through partnership, LeanCost International and SMT Technology collaborated to embed the LeanCost software as a module into SMT’s Smartline software – a solution with similar functionalities to a MES but does not support real-time part costing and a ROI (return on investment management) function.

“The successful collaboration has resulted in an enhanced total solution that will enable manufacturers to monitor the actual cost of parts or batches in real-time from any location, and generate the most accurate part cost once a work order is completed. For many SMEs in the PE sector, such real-time monitoring is important due to the highly competitive and cost-sensitive market. It is also a better way to monitor production and reward employees,” said Gerry Ong, Managing Director of SMT Technology.

“We have since launched SmartCost system, a first-of-its-kind not just for the precision engineering industry but the manufacturing sector as a whole, at the Industrial Transformation Asia-Pacific (ITAP) exhibition in October 2019. This solution will help companies manage their pricing strategies and increase the profitability of their product portfolio through optimised machine configurations for the lowest production cost. For large OEMs (original equipment manufacturer), their suppliers’ part costs can become transparent thus increasing mutual business trust and co-operation” he added.

“Working with the right technology partners like SMT Technology is critical to our start-up’s success. IPI took the time to understand LeanCost International’s business and technology needs and opened up new opportunities for us,” said Tan.


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