What Is the Smart Factory and Its Impact on Manufacturing?

Guest post by MHI Member Company, Otto Mottors

You don’t have to look too closely to see that technology is having a profound impact on how factories operate today. The application of technology is making the process of manufacturing ever increasingly intelligent and dynamic – allowing the concept of a Smart Factory to become a reality.

What is a Smart Factory?

The term describes a highly digitalized and connected environment where machinery and equipment are able to improve processes through automation and self-optimization. The benefits also extend beyond just the physical production of goods and into functions like planning, supply chain logistics, and even product development.

Yet, the core value of the smart factory still happens within the four walls of the plant. The structure of a smart factory can include a combination of production, information, and communication technologies, with the potential for integration across the entire manufacturing supply chain.

All these disparate parts of production can be connected via the IoT (Internet of Things) or other types of advanced integrated circuits (IC’s), which enable sensing, measurement, control, and communication of everything that’s happening throughout the manufacturing process.

Sensor Technology Enables IoT

OTTO 1500 and 100 self-driving vehicles’ sensors on a production floor.

Central to the smart factory is the technology that makes data collection possible. These include the intelligent sensors, motors, and robotics present on production and assembly lines that the smart factory puts to use.

Sensors make it possible to monitor specific processes throughout the factory which increases awareness about what’s happening on multiple levels. For example, vibration sensing can provide a warning when motors, bearings, or other equipment need to be maintained. These types of subtle warnings become alerts for preventative maintenance or other actions that head off larger production problems if left unattended.

Similarly, sensing technology on SDVs (Self-Driving Vehicles) used for material handling improves efficiency and safety as products are moved around the factory. These types of robotics have the ability to sense and avoid people, as well as unexpected obstructions in the course of doing its work. The ability to automatically avoid these common disruptions is a powerful advantage that keeps production running optimally.

Connecting the Shop Floor to the Top Floor

Photo credit: Popular Mechanics

Communication and the ability to use manufacturing data is what puts the ‘smart’ in ‘smart factory’. New technologies are emerging as Industry 4.0—or the next industrial revolution—are converging to enable the smart factory.

Ultimately, it’s the application of intelligence at the factory level that creates a dynamic production environment and the desired results—reducing costs while improving quality and reliability. Consider how smart equipment makes it possible to automate much of what’s required to accommodate product variation and smaller-sized production runs during the manufacturing process. The future of manufacturing is more customization, so by minimizing downtime for retooling and resetting equipment, manufacturers can operate efficiently while staying flexible.

The Impact on Jobs

As the smart factory slowly emerges, the roles that people take on will evolve from what they are currently doing in today’s factories. People will take on more complex roles while automation will conquer the tasks that are repeatable, mundane, dangerous or currently impacted by labor shortage. In fact, labor shortage is one of the most common challenges manufacturers are continually facing, with 56% of companies saying it is difficult to hire new employees.

While it’s true that automation is viewed as a threat to existing manufacturing jobs, there is also new trend that is emerging called “the digital talent gap” — there is a rising need for digital skill sets as more companies choose to implement digital technologies. According to MHI’s Annual Industry Report, companies are severely hampered in their ability to implement digital technologies due to the shortage of workers with the necessary skills to run them. This means that companies will need to start investing in talent development as the adoption of Industry 4.0 technology will require a greater need for skilled workers.

“Organizations in the early stages of digital maturity face a chicken-and-egg problem where they have a tremendous need for digital talent, yet their hesitancy to embrace a digital culture makes them less attractive to such talent.”

— MIT Slogan and Deloitte

The investment of building a smart factory benefits manufacturers by creating a safer, efficient and more reliable operation. Companies will need to adopt digital technologies in order to meet consumers’ rising expectations of faster delivery times, free shipping, options to customize products, more transparency, and lower costs. When GE Healthcare began their transition to a smart factory, they saw a 66% increase in productive floor space.

The demands on the manufacturing industry will continue due to the trend for more on-demand production and ever present drive to reduce costs. The smart factory is a direct way for manufacturers to excel in a competitive and dynamic marketplace as they’ll use digital innovation to improve supply chain efficiencies.

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