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Smart Factory: What It Is and Why It Matters

Published: · Last updated: · 10 min reading time

When you think about or hear the word ‘factory,’ what usually comes to mind? Huge, automated, industrial manufacturing lines, large machinery, and an equally elaborate production process go along with it.

When the first industrial revolution turned the world on its head, the manufacturing process began to alter with steam seismic power. Since then, we have had a few more. The second was the most notable, namely, fossil fuels’ processing and the emergence of electricity as an energy source. The third was the rise of electronics, computers, and telecommunications, allowing for an era of high automation and the streamlining of processes in the supply chain.

But there is a fourth industrial revolution. In fact, the world has been watching it unfold as we speak because it’s happening right now, and it’s inescapable. It is also known as Industry 4.0 or Smart Factory 4.0 and has to do with The Internet and its impact everywhere you look.

The Smart Factory Definition

Smart factories are simply moving away from traditional automation production processes of the past and embracing data collection by highly connected and networked systems. The collection of big data is part and parcel of this brave new era that we find ourselves in. It allows for flexible, adaptable, and quick-fire changes to supply chain management and production processes. This also means that the artificial intelligence employed is constantly self-optimizing – meaning real-time results through machine learning that takes seconds to perform decision making that used to take days or even weeks to assess and implement. So that’s pretty smart. Getting connectivity at every touchpoint of the production process is now a unique tool for this complex, ultra-connected world of lightning-speed decision-making.

Another aspect of this is the possibility of connecting operations locally in one physical location or globally across a network of systems involved. The possibilities are endless. ‘Virtual factories’ are even possible and allow for testing new ideas in real-time with accurate data as a perfect simulator, not unlike pilots and Formula 1 racing drivers who need to react fast. The difference is that in their case, it can mean training for reflexes that can result in life or death. For industry, this can mean the difference between successfully outperforming the competition or being left behind.

What Advantages Do Smart Factories Have?

When you hear the term smart factory, it tends to conjure up images of many fancy electronics, bells and whistles, and tech that indeed has to cost a fortune. If it’s that smart, it has to be cutting edge and uber-expensive, right?

Possibly. But not all of the time. One of the critical things to remember is that they don’t necessarily have to be purpose-built from the ground up.

Transitioning towards a smart factory does not have to necessitate a considerable upfront expenditure with massive investment. Machinery can be retrofitted with sensors, so you can retrofit existing machinery where possible from your production process and source suppliers who can replace others with retrofitted solutions to fill gaps.

So why should you move towards a smart factory? Or perhaps more pertinently, what’s stopping you? The advantages of embracing industry 4.0, capturing big data, and smart manufacturing are numerous.

Let’s break these down.

Lower cost of production

Pure and simple. The self-optimizing facet of smart manufacturing means that artificial intelligence, machine learning, and constant big data feedback create an unmistakable streamline to the manufacturing process that is just not possible using traditional production methods.

Redundant processes and counterproductive steps can easily be sheared from production and improve overall output with less overhead while reducing the waste of resources.

Supply abundant information from big data

The sheer volume of analytics that becomes available at your fingertips when you have a smart factory makes management decisions much more straightforward. Data means an accurate picture. You might think you know best, but what big data reveals is black and white.

While open to interpretation, some complex numbers can make some decisions substantially more manageable to make calls on. In a world of Internet 4.0, this is par for the course and a huge part of why it forms this next wave and thus the fourth industrial revolution.

This will also support measuring performance and provide valuable information for implementation strategies.

Product quality improvement

Quality control can be monitored in smart factories via ‘virtual factories’ to see the immediate impacts of process changes in real-time before rollout to the real world.

Predictable maintenance

The monitoring of smart factories makes the ordeal of maintenance a lot more predictable. Often issues can be spotted and corrected before minor problems have ballooned into more significant and more challenging to fix problems.

This digital overhead view can also improve safety for employees involved with hands-on manufacturing and the production line. Accidents can potentially be significantly reduced when machines are maintained when alerts make themselves known. Intervention can then take place to correct and catch issues in their tracks.

What Are the Challenges of a Smart Factory?

The decision to move to a smart factory is highly advantageous. But it doesn’t come with some serious considerations before adopting its use.

There can be challenges when making that transition, which may impact your business’s reputation with your customers and your output speed and production rate.

Your supply chain has to be stabilized with backup plans and protocols for anything that might happen untowardly.

Big Data means big handling of data

Possibly the biggest challenge for any factory moving its manufacturing into a smart factory example is the sheer volume of data collection involved.

IT (information technology) and OT (operation technology) are merged in a smart factory, which means that overall there is more ‘surface area’ for cyberattacks, industrial espionage, theft, and hacking to take root. It is worth noting that this susceptibility requires an experienced and expert team to support the new smart factory.

Data security is paramount, and ignoring this key aspect is at your peril.

How To Build a Smart Factory?

Having looked at some smart manufacturing examples, smart factories are becoming easier and easier to transition to. The acceleration of growth of ‘diffusion machines’ taking into account digital and data needs means that a smart factory is becoming more accessible for even the most stalwart traditional factory to participate in Industry 4.0.

What are the seven steps you need to build the perfect smart factory?

Invest in security

We know security is a must. Sophisticated tech and IT and OT collaboration need to be realized with specialized safe connections and digital networks, even more so if a global multi-site strategy is a part of your enterprise resource planning.

Wireless connections

An investment in wireless connectivity is becoming the standard for the smart factory. This data capture allows for rapid decisions in the automation of production and autonomy of the factory. The connectivity is fundamental to supply chain adjustments made in real-time and is critical to the future of production.

Collaboration technology

With all of the automation development, the need for collaboration tools and technology becomes even more apparent. With departments not needing to be in the exact location, video conferencing, remote maintenance contracts, and the overall process of actualizing the project require that data sharing and processes are easily facilitated.

Remote connectivity opens up a whole new world for vendors who supply support to a smart factory. IT can be anywhere globally and resolve issues, so competition and pricing can be a significant cost saving. With a smart factory, the options are endless, and the world is your oyster!

IT and OT convergence

Transitioning to a smart factory means integration between two traditionally separate sectors. These would again be IT and OT. What is needed here is a close cooperative pact that will allow for smoother planning, reduce objections by interdepartmental parties, and follow through to implementation.

The relationship doesn’t end there either. It will need to be ongoing as continued development and company goals progress and require additional constructs and layers to the autonomous production.

Data management

Collecting such high volumes of data has had a drastic impact on the characteristics of the manufacturing industry. The connectivity of modern machines, the IoT (Internet of Things) ideology, and the adaptation of modern tech to existing manufacturing machines have allowed the smart factory to monitor and receive digital data in completely cutting-edge ways.

Building a skilled structure and network to manage this data from the ground up right from the start is essential for interpreting that vast digital output of information. It’s basically a case of “it’s no good collecting huge swathes of data if you can’t make heads or tails of it once it’s been delivered to you.”

Digital mindset

When you think about soft skills, they can be easy to dismiss as irrelevant or low on the ladder of a smart factory’s needs. But this is where they are needed more than ever in building the perfect smart factory. They are essential to creating perceived value for your business and your customer.

This means that all workers in a smart factory need to be on board with the digital mindset. That requires looking at old problems and old processes with a fresh new set of eyes.

With that being said, it highlights the attitudes needed for employees to embrace the new digital mindset because while machines can collect and collate mountains of data, we still need worker ingenuity and creative thinking to act on and push the boundaries.

Openness to change

The smart factory is a constantly evolving thing. Ever adapting, processing, gleaning new insights, and mining all important data to manage and optimize our manufacturing the digital way. By necessity, it requires a state of openness to change as it is not a static state of operation. Rather, automation at the next level of digital intelligence and the digital world is anything but slow.

Workers need to flow with change and have an open mindset so that market opportunities and manufacturing gains can be made quickly to either stay ahead of or meet the competition.

The acceleration of change in manufacturing thanks to the smart factory has revolutionized virtually every aspect of our world today, whether the layman sees it or not.

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