Smart factories are here to stay. Often called Industry 4.0, they are going far beyond mere automation: they are changing the manufacturing landscape.
A new study from Capgemini, a global information technology consulting company, says 76% of manufacturers either have an ongoing smart factory initiative or are working on formulating one. More than half of them, the study says, have designated $100 million or more toward smart factories. It estimates the smart factories could add $500 billion to $1.5 trillion in value-added to the global economy in five years. These manufacturers predict overall efficiency will grow annually to 2022 at seven times the rate of growth since 1990.
More than 75% of manufacturers either have an ongoing smart factory initiative or are working on formulating one.
For at least one tech company, the shift has paid off. The Changing Precision Technology Co., in Dongguan, China, which produces mobile phones, replaced 90% of its workers with robots, reports ZME Science newsletter. Now just 60 people are doing the job that 650 once did — with an eventual goal of only 20. Luo Weiqiang, the factory’s general manager, told ZME Science that the factory is producing 250% more product with better quality.
It’s a global phenomenon, as these examples show:
Semiconductor giant Infineon is pumping $105 million over five years into its Singapore plant to turn it into a smart factory. The company already has deployed the first robotics and automated guided vehicles in the plant.
Chemical giant BASF incorporated a smart factory system in Kaiserslautern, Germany, to manufacture fully customizable soaps and shampoos. When an order is placed, the automated factory line adjusts its protocols to make the product and packaging as ordered by the customer. Radio-frequency ID tags attached to the soap containers send wireless signals that tell the machines on the production line about the customized order.
At GE’s Advanced Manufacturing Works in Greenville, South Carolina, engineers are working on new ways to streamline smart factories using artificial intelligence (AI) and Internet of Things (IoT) technology. This $75 million plant is next to the site where GE makes the world’s largest gas turbines — products manufactured on a huge scale with incredibly intricate pieces. They have introduced smart factory systems and are working to provide more to its other plants around the globe.
What is a smart factory?
A new paper from Deloitte University Press, The Smart Factory: Responsive, Adaptive, Connected Manufacturing, defines the smart factory as “a leap forward from more traditional automation to a fully connected and flexible system — one that can use a constant stream of data from connected operations and production systems to learn and adapt to new demands.”
It goes on to say that a true smart factory “can integrate data from systemwide physical, operational, and human assets to drive manufacturing, maintenance, inventory tracking digitization of operations through the digital twin, and other types of activities across the entire manufacturing network.”
Something in common
Successful smart factories share five key characteristics, Deloitte says. They are connected, optimized, transparent, proactive and agile. They are not dissimilar from a successful supply chain.
Connected, says Deloitte, is the most important feature of the smart factory, as well as a crucial source of value. Assets are fitted with smart sensors, allowing systems to continuously pull data sets from sources, ensuring data is constantly updated and reflected current conditions.
An optimized smart factory allows operations to be executed with minimal manual intervention and high reliability.
The data captured in a smart factory must be transparent. A transparent network enables greater visibility across the facility, ensuring that the organization can make more accurate decisions by providing tools such as role-based views, real-time alerts and notifications, along with real-time tracking and monitoring.
A smart factory can integrate data from system-wide physical, operational and human assets to drive manufacturing, maintenance and inventory tracking digitization.
Deloitte University Press
In a proactive system, Deloitte says, “employees and systems can anticipate and act before issues or challenges arise, rather than reacting after they occur. The ability of the smart factory to predict future outcomes based on historical and real-time data can improve uptime, yield and quality, and prevent safety issues.”
Finally, being agile allows the smart factory to adapt to schedule and product changes with minimal intervention, the report says.
Addressing the talent crunch
Supply chain events provide ample opportunities to gain expertise and learn new ways of operating — tricks of the trade from best-of-breed organizations. One question that has been common in recent years is, “Where’s the talent?” For manufacturing, at least, smart factories may provide a solution.
With an aging workforce, a competitive job market and younger workers not really interested in manufacturing, many traditional manufacturers are struggling to find both skilled and unskilled labor to keep operations running. Deloitte has estimated that the U.S. manufacturing industry could face a two million worker shortage over the next decade.
“Many companies are making investments in smart factory capabilities to mitigate the risk associated with this possibly pervasive labor shortage,” the paper reads. “However, this move can create a new set of talent-related consequences, as automated assets typically require highly skilled personnel to operate and maintain, even the location of manufacturing facilities would need to take into account factors such as these.”
No one company has a patent on why or how to shift to a smart factory. Deloitte says that such a journey generally addresses broad categories like asset efficiency, quality, costs, safety and sustainability. “These categories, among others, may yield benefits that ultimately result in increased speed to market; improved ability to capture market share; and better profitability, product quality, and labor force stability.
“Regardless of the business drivers,” the report summarizes, “the ability to demonstrate how the investment in a smart factory provides value is important to the adoption and incremental investment required to sustain the smart factory journey.