Introduction to Glass 5.0
By Todd J. Seifried, President
Cost. Many times, cost is the driving variable in how we in the glass industry approach projects and initiatives. How much capital must be spent on raw materials, equipment, and manpower? What is the risk-benefit analysis of one process versus another process? Is it worth implementing new technology? Or should we stick with what we already know works? What are the fixed costs? What are the operating costs? What are the potential consequences? How can we avoid unforeseen issues that inevitably result in more of these costs?
Plain and simple, what is the short-term budget? What is the long-term financial commitment? And most importantly, what is the potential return on investment? The answers to these questions are central to almost every major decision that goes into developing, deploying and executing a project. And that’s where “Glass 5.0” comes in. With the launch of this eMagazine, one of its primary purposes is to focus on examining these questions and providing the glass industry with relevant and impactful answers, in effect, helping it even further along the evolutionary curve. Hence the name, “Glass 5.0”.
Just as industries worldwide are using Industry 4.0 concepts to drive change, we see “Glass 5.0” building on this and taking these issues to the next level in the glass industry.
“Glass 5.0” will challenge the contemporary narrative of both glass manufacturers and suppliers alike, which too often focuses on short term cost to the exclusion of Lowest Total Lifecycle Cost and is blind to such aspects as improved functionality that can enhance future profitability. While Lifecycle Cost can be defined in a variety of ways, the overwhelming majority of people in the business recognize that it must include both fixed costs and operating costs as well as other difficult-to-assess costs such as opportunity costs (including lost profitability), maintenance costs, periodic costs, non-reliability costs, and other costs which are a result of knock-on effects. This eMagazine will provide more insights regarding these aspects.
But it doesn’t stop there. We want to dig deeper. “Glass 5.0” will also look at the ability of these investments to adapt to changes, both anticipated and unforeseen, minute and large scale. For example, we will look at how environmental disturbances to the manufacturing process can affect the bottom line. We’ll examine how changes in the cost of inputs such as raw material or energy prices can alter the budget; and even how the ability to produce different products with the same equipment can have wide-ranging implications.
The capital-intensive nature of the glass industry, particularly in the hot end of glass melting and forming operations, is a defining feature. Most investment decisions entail trade-off of capital cost vs. operating cost. Similarly, both of these are affected by the capital and technology options, as visualized in the following images:
As with most major undertakings, typically the bigger the capital investment, the larger the number of variables to consider. Innovation is key, not only in technology, but also in the capital delivery processes that affect how well and how fast these technologies are deployed. We must take numerous aspects into consideration:
- Can the project delivery process affect the original design intent?
- What are the consequences of both the technology deployment and the capital delivery process?
- How can the capital delivery process be optimized to enhance Return On Investment?
Fortunately, there are a large number of tools at our disposal that can be employed during the lifecycle of glass-making assets.
Accordingly, “Glass 5.0” will feature articles that explore these variables with the definitive goal of improving the reader’s decision-making process, and ultimately, the return on investment.
Many of the innovations in technology and project delivery require that we rethink our organization and business process. For example, Front End Loading (FEL) and Design-Build project delivery methodologies are now frequently employed; however, many of the organizational and business processes in place are not set up to effectively take advantage of the wide-ranging benefits these methodologies provide. “Glass 5.0” will push the envelope and challenge conventional wisdom, with the hopes of helping to lead the industry into the future.
We hope you enjoy reading this and subsequent editions of “Glass 5.0”; we look forward to your feedback and contributions. To borrow from the past, for these articles about the future, we say ‘don’t touch that dial’!