Industry 4.0: Northern NV companies working to keep up amid fourth industrial revolution

ITS Logistics CEO Scott Pruneau says the company has to leverage technology in order to have better business processes.

ITS Logistics CEO Scott Pruneau says the company has to leverage technology in order to have better business processes.

RENO, Nev. — Standing inside Vital Systems, an electronics manufacturing company in Reno, a robotic machine emits a soft buzz as it makes swift micro movements — dips, shifts, lifts, repeats.

“This is ‘Bob,'” says Hamid Zaidi, founder and CEO of Vital Systems, watching the robot in action. “This is a soldering robot. Would you want to say soldering robot every time? So, we call it ‘Bob.'”

This robot, Bob, is not assembling anything — not yet. But, in a few days, Bob will be on the clock in earnest, soldering together bite-sized 18 millimeter-by-9 millimeter electronic stacks for a regional company that develops gas sensors.

“We've been working with them for about two years to develop their product,” Zaidi explains. “Now they've come to a point where they've got their orders and next week we go into production with their product.”

Before Bob, employees at Vital Systems were manually soldering together the miniscule stacks, “which is a very time-consuming and costly process,” says Rebecca Henry, operations manager at Vital Systems.

Zaidi succinctly puts it another way: “This thing is a nightmare for us to assemble.”

Hamid Zaidi, left, founder and CEO of Vital Systems, shares a laugh with an employee as she uses a hand solder to assemble a unit.

Henry estimates that manually soldering together each unit takes 10 minutes — a lifetime in manufacturing.

“In order to reduce that and be able to compete with (manufacturers) overseas … that's where Bob comes in,” said Henry, who estimates the soldering robot will take roughly 3 minutes apiece. Moreover, “The consistency is there, as well. With hand soldering, if you missed a pin, it has to go back. The machine's not going to miss a pin; you're not going to miss a soldering point; you're going to hit it every time.”

No, this is not a robots-will-replace-us-all, “Rise of the Machines” PSA. This is a glimpse at a Northern Nevada company that is using cutting-edge technology to stay competitive amid the latest industrial revolution: Industry 4.0.

“For us to compete,” Zaidi shrugs, “we have to stay up and keep up with (technology). That's the reason why we constantly upgrade.”


For some, Industry 4.0 may just be a buzzword floating in the ether. So, what is it? The industrial trend focuses heavily on using machine-to-machine communication, artificial intelligence and real-time data to “improve your quality, lien out your process or eliminate waste,” said Rhea Gusafson, project manager at Nevada Industry Excellence (NVIE).

In the Reno area, using all of these technologies simultaneously to create a connected workplace — or smart factory — is “not happening to much of an extent,” Gustafson said.

However, there are companies in Northern Nevada moving with the current trend, using pieces, big and small, of Industry 4.0 technologies to improve their processes.

Just ask Scott Pruneau, CEO of ITS Logistics. The Sparks-based logistics company uses API (Application Programming Interface) connectivity to “link its multiple operating systems,” he said. Simply put, the technology enables fast and secure data exchange across software systems.

ITS Logistics CEO Scott Pruneau says the company has to leverage technology in order to have better business processes.

“We have three different companies — all of our companies are on different operating systems,” Pruneau explained. “API allows us to still get one version of the overall truth from best of breed software packages without compromising the individuality of each business.

“Our business requires fast decision-making, so being able to connect and assimilate data from multiple sources easily not only enhances the quality of the decision, but the speed of the decision.”

Vital Systems also uses real-time data to its advantage with its unique enterprise management system called B2, which Zaidi developed.

“This system makes us run lean and able to catch mistakes before they happen,” said Zaidi, who offered an example of its functionality. “Let's say a product is running through five stages. Stage 1 is done, it skips Stage 2 and goes to Stage 3 … it will get rejected over there and goes back to 2.”


Other companies like NOW Foods, a natural foods and products company with a manufacturing and distribution warehouse planted in Sparks, have not yet taken a bite out of Industry 4.0 technologies. NOW, however, is blueprinting multiple 4.0 projects, with its first being in the area of “Big Data” and “Cyber Systems,” CEO Jim Emme wrote in an email to the NNBV.

“Although we are conservative in our approach to adopting new technologies, we fully understand that it's imperative to change when the time is right,” Emme said. “Doing otherwise can put our operations at a competitive disadvantage.”

Emme, though, said transitioning too soon to Industry 4.0 can presents its own set of disadvantages for a company.

“Being too early of an adopter presents the possibility of a difficult implementation and also the risk of the technology becoming obsolete earlier than planned,” Emme said. “The implementation of any major technological process requires a lot of change management oversight within the teams that are affected.”

This, Gustafson said, is why companies in Northern Nevada and beyond need to take a “steps approach” — in other words, not sprint — into Industry 4.0.

He noted that NVIE is currently in the process of identifying manufacturers in the region and across the state that the organizaiton thinks are ready and willing to take the next step.

“The step is huge if you try to do it all at once,” Gustafson said. “We want to identify incremental steps for them, so that they can make a small time investment, small financial investment, to see how they can gather data and use that data to improve their processes.”

Tom Simpkins, also a project manager at NVIE, said some manufacturers are not as willing to ride the new tech wave. All told, many are still shaking off the effects of the economic downturn.

“In many ways,” Simpkins said, “they haven't had sustained growth yet where they can say, we've got a big ole pile of cash, let's go automate our shop floor.

“The tough part is manufacturers are just working on their day-to-day,” he continued. “They've got numbers to hit … they're like, we just got to get this week done with. That's where we can come in and help them start to think about this stuff further on down the road.”

To that end, Simpkins said companies may not realize it can make small improvements that go a long way using 4.0 technologies.

From tracking forklifts with a GPS module to tracking the hours a tool head has been used to installing automatic doors in the warehouse. These are all “smaller investments” manufacturers can make to make a difference, according to Simpkins and Gustafson.

“There are really tiny things they can do that are lower cost that will allow them to kind of absorb into this IoT world and capture data,” he said. “We can start shining a light on some real applications that make sense, and not just this pie-in-the-sky stuff or what's going to require a quarter-million-dollar capital budget.”


Simply put, companies in Northern Nevada that don't eventually pick up to speed with tech's evolution in this Industry 4.0 era are going to be left behind, Simpkins said. Maybe not now, maybe not in five years — but eventually “they're going to get beat.”

The companies that are embracing tech's evolution and recalibrating their operations accordingly already have a leg up. But, as Gustafson points out, the factories and warehouses pumping out products day in and day out are “not competing against each other … we're competing against the rest of the world.”

Most especially, China, which has the world's largest industrial output. In 2016, China produced $4.566 trillion of industrial output, according to World Atlas. The European Union ranked just behind China at $4.184 trillion, followed by the U.S. at $3.062 trillion.

“If we don't have the efficiencies, our costs aren't going to be in line to be able to sell the product at market rate,” Gustafson said. “If we can automate what we're doing here and keep the costs down, then we'll have more American made products.”


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