Introduction

In today’s era of intensifying global competition, promoting Digital Transformation (DX) in the manufacturing industry is an urgent imperative for companies to achieve sustainable growth and enhance competitiveness. Particularly, the management of fasteners, including ‘screws,’ which are fundamental to production sites, is a critical element directly impacting product quality, manufacturing costs, and productivity, yet its digitalization is often overlooked.

In Japan’s manufacturing sector, DX investment reaches approximately 2.5 trillion JPY annually, with many companies focusing on adopting digital technologies. Meanwhile, Vietnam’s manufacturing industry continues to grow at an average annual rate of 6.5%, driving a strong demand for efficiency and sophistication. However, survey results indicate that screw-related defects account for 15-20% of all defective products in manufacturing sites, highlighting the urgent need for improvement in this area.

This article will detail the specific benefits that digitalizing screw management brings to manufacturing sites, from the perspective of Japanese companies operating in Vietnam. Ohta Vietnam, as a strong partner supporting our clients’ DX initiatives, offers extensive expertise and practical solutions to contribute to solving your challenges.

Current State and Challenges of Screw Management in Manufacturing

Traditional screw management in many manufacturing sites relies on manual processes, leading to various inefficiencies and risks. To understand the necessity of digitalization, it is crucial to first grasp these challenges specifically.

Inefficiencies of Manual Management

• Inventory Confirmation and Stocktaking Burden: Manually counting and recording vast numbers of screw types and MRO (Maintenance, Repair, and Operations) parts requires significant time and labor costs. For instance, manual stocktaking can consume 80 hours per month, potentially totaling approximately 1,000 person-days annually.
• Inefficient Ordering Processes: Ordering based on visual inventory checks or without historical data often relies on the experience and intuition of procurement staff, leading to reduced operational efficiency.

Risks of Human Error

• Incorrect Orders and Misplacement: Incorrect ordering of similar screws or misplacing the wrong screws onto the production line directly causes quality issues and production stoppages.
• Production Line Stoppages Due to Stockouts: Screw stockouts caused by inadequate inventory management lead to production line stoppages and significant economic losses. A single production line stoppage due to a stockout can result in an average loss of 4 hours and an annual opportunity cost of approximately 5 million JPY.

Lack of Traceability

• Difficulty in Identifying Root Causes of Defects: When product defects occur, it is challenging to trace which screw lot was used, when, and in which product, leading to delays in root cause identification and response.
• Delayed Recall Response: In the event of a large-scale recall, delays in identifying affected products and conducting retrieval operations can lead to a loss of corporate credibility and substantial costs.

Increased Costs

• Storage Costs Due to Excess Inventory: Holding excessive inventory to mitigate stockout risks leads to cramped storage space, increased management costs, and a higher risk of inventory obsolescence. The cost of maintaining excess inventory is said to reach 15-25% of the annual inventory value.
• Emergency Order Costs: Emergency orders due to stockouts incur higher unit prices and transportation costs than usual, driving up procurement costs.
• Scrap and Rework Costs Due to Defective Products: Product disposal and rework caused by incorrect screw insertion or defects result in significant costs, including material, labor, and time. A single defective product can lead to an average loss of 500 JPY, sometimes resulting in an annual cost increase of approximately 3 million JPY.

Specific Challenges in Vietnamese Manufacturing Sites

While Vietnam’s manufacturing industry largely consists of labor-intensive sectors, rapid economic growth necessitates increased efficiency and sophistication. However, many sites still retain traditional management methods, making it urgent to address the complexities of the supply chain and establish quality management systems that meet global standards.

Specific Benefits of Digitalizing Screw Management

Digitalizing screw management resolves traditional challenges and brings a wide range of benefits to manufacturing sites. Let’s examine the specific effects with numerical data.

Increased Productivity and Cost Reduction

• Real-time Inventory Management: Utilizing IoT (Internet of Things) devices and sensors enables real-time visualization of screw inventory status, eliminating stockouts and excess inventory. This can reduce inventory checking time by 30% and ordering process time by 50%.
• Automated Ordering System: Implementing an automated ordering system based on inventory data streamlines procurement operations and reduces human errors.
• Reduced Work Time: Accurate inventory information and supply planning significantly reduce time spent searching for parts and placing orders, thereby improving worker productivity.
• Optimized Storage Space: Maintaining optimal inventory levels can reduce storage space by 20%, allowing for more efficient use of facilities.

Improved Quality and Risk Reduction

• Accurate Screw Selection and Insertion Support: Digital systems assist in selecting the correct screws, reducing the risk of incorrect insertion. This is expected to improve the defect rate by 15%.
• Lot Management and Usage History Tracking: Digitally managing screw lot numbers and usage history enhances product traceability. This enables quicker identification of root causes when defects occur, reducing recall response time by 70%.
• Reduced Stockout Rate: Highly accurate inventory management reduces the stockout rate by 90%, contributing to stable production line operation.

Data-Driven Decision Support

• Usage Trend Analysis: Collecting and analyzing screw usage data allows for understanding usage trends and consumption patterns for each product, enabling more accurate demand forecasting.
• Supplier Evaluation: Objectively evaluating suppliers based on delivery performance and quality data enables the formulation of optimal procurement strategies.
• Supply Chain Optimization: Digitalizing screw management contributes to the efficiency and optimization of the entire supply chain, from procurement to production and shipment.

Strengthening Competitiveness in Vietnamese Manufacturing

Digitalizing screw management is a crucial step for Vietnam’s manufacturing industry to adapt to global supply chains and transition to high-value-added production. By establishing an efficient and high-quality production system, companies can strengthen international competitiveness and build a sustainable growth foundation.

Success Factors for Digitalization and Future Outlook

To successfully digitalize screw management, it is essential to have not only technological adoption but also an organization-wide commitment and a strategic perspective.

Leadership Commitment

DX promotion involves not just the introduction of IT tools but also the transformation of business processes and organizational culture. Therefore, strong leadership and commitment from top management are indispensable. Over 80% of companies successful in DX initiatives cite leadership commitment as the most critical success factor.

Phased Implementation and Small Starts

Instead of overhauling all systems at once, it is crucial to implement them incrementally, starting with high-impact areas, and building success through small-scale initiatives. This reduces resistance from the shop floor and encourages system adaptation. Surveys show that the success rate for small-start implementations is 30% higher compared to complete overhauls.

Employee Training and Engagement

When implementing new systems, thorough education and training for employees are essential. By deepening their understanding of the system and encouraging active use, the benefits of digitalization can be maximized. It is also important to gather feedback from the shop floor and incorporate it into improvements to enhance employee engagement.

Importance of Partnership

Digitalizing screw management requires specialized knowledge and experience, making collaboration with a partner like Ohta Vietnam, who possesses expertise and a proven track record, key to success. Leveraging external insights allows for efficient resolution of challenges that might be difficult to address internally.

Future Outlook

Digitalizing screw management is a crucial step towards realizing smart factories (factories incorporating advanced technologies). In the future, applications such as digital twins (technology that replicates physical space information in cyberspace for real-time analysis and simulation) across the entire supply chain and AI-driven predictive maintenance are expected. This will enable predicting screw wear and optimizing replacement timing, thereby minimizing equipment downtime. Digitalization will continue to evolve towards achieving sustainable manufacturing.

Summary

Digitalizing screw management in manufacturing sites is not merely about operational efficiency; it is a critical step in manufacturing DX, significantly contributing to increased productivity, improved quality, cost reduction, and enhanced traceability. To resolve the inefficiencies and risks associated with traditional manual management methods and boost corporate competitiveness, digitalization is an indispensable investment.

Conclusion

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