What is a Smart Factory and What does it mean for the future of Manufacturing


Events of recent years have without doubt, witnessed an acceleration of volatility across the entire supply chain. A recent survey by Make UK highlights the knock-on effects from increased energy, transport and raw material costs, as well as transport availability, with 80% of companies saying that increased energy costs have caused disruption to supply chains.

For manufacturers, this shift has expedited a move to a smarter way of working which addresses some of the market dynamics we’re seeing play out, such as a lack of skilled labour in the workforce, sustainability goals, increased consumer expectations, cost increases and fluctuations in supplier reliability. Once a futuristic concept, there is now a very real and urgent need for smart factories which have the elasticity to cope with fluctuating capacity and demand, while demonstrating best practice in efficiency, safety and sustainability.

Entrenched in connected operations, and AI-led insights which converge to deliver a more intelligent, cohesive operation, the smart factory can be described as the end goal of digital transformation in manufacturing, a digitised facility that uses connected devices, machinery and production systems to continuously collect and share data.

Made possible by advances in the development of digital twins, sensors and the prevalence of the Internet of Things (IoT), AI, and methodologies such as Industry 4.0, smart factories are fast becoming a prerequisite for modern manufacturing. The smart factory sees predictive tasks evolve into prescriptive ones, and AI-centric data insights inform decisions on what to do next based on analysis. For example, insights can predict if a machine is about to fail based on analysis of past history and current usage, and then production planning can be re-organised, or certain processes re-mapped, to maintain on track with schedules, or to capitalise on a more cost effective, or profitable activity.

However, the idea of designing a truly smart factory to achieve these objectives can be overwhelming, and result in manufacturers not knowing which technologies to invest in and indeed, where to start.

More than one approach

Of course, building a factory from scratch, or moving to new premises which provide the relevant capabilities, represents the best means of capitalising on the opportunity. However, for the majority, this isn’t possible and a more incremental approach across existing operations must be deployed. In this instance, smart capabilities can be introduced within a process, using wireless technologies to facilitate the connectivity. Similarly, machine can be upgraded by installing new sensors, either to collect data more effectively, or to collect different kinds of data.  

While this might sound like it lacks the shiny newness of the kinds of smart factories we’re used to seeing in a VR environment or similar, in our experience, the real competitive advantage in a smart factory comes, not through the advanced machinery on the shop floor, production systems and sensors, but the applications which process resulting data in real-time.

Predictive maintenance applications in particular which can contextualise and extract value from the connected data, can make the most difference to production processes. Simply put, there is no merit in having a plethora of sensors collecting terabytes of data if there is no way of applying meaning to it, and it is just there for data’s sake.

Of course, any such decision has to be based heavily on a cost-benefit calculation so there has to be an understanding of the value of the asset and whether installing sensors will simply fend off new investment for a finite period, or improve throughput or quality.

Finding the value in the data

Some would argue that adoption of a smart factory is the only way to maintain competitive in what continues to be a tumultuous economic environment.

While intellectual property (IP) was once considered the dominant facet of a business’ unique selling points (USPs), the most valuable commodity in any business today, is, without doubt, data. When you consider that we produce an estimated 2.2 quintillion bytes of data every single day, harnessing and understanding this data in the context of a smart manufacturing facility, is paramount. In fact, some of the most intelligent approaches focus on a discrete number of areas or parameters which have the greatest impact on, say, throughput, waste, or profitability, and channel analytical efforts into these areas.

Intelligence, collaboration and empowering people

The smart factory is about much more than automation of processes and enhanced workflow. True smart factories prioritise intelligence and collaboration, and empower people to create value through leveraging the right multi-dimensional data to deliver valuable insights which can make or break the success of operations.

Only through adopting a carefully balanced strategy focused on these core areas, will manufacturers truly be able to derive the potential of the smart factory, utilising modern technology and capabilities to navigate both internal, and macro-economic volatility both today and well into the future.