Rise of the smart factory: Evolving at the speed of business

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Categories: ERP, Manufacturing
March 20, 2018
ERP solutions

The smart factory drives efficiency, accuracy, and better decision-making through automation and connected objects.

As new technologies dramatically shift the landscape of manufacturing the world over, industry is seeing rapid change in how things are made.

“Rise of the Smart Factory: Evolving at the Speed of Business” explores these changes and the many impacts on the way business is done.

What is a smart factory?

What makes a factory “smart”? What does it mean?

Smart factories represent a leap in recent innovations, such as automation, that presented major innovations and efficiency drives during the 20th century. The smart factory is deeply interconnected, with data streams from throughout the enterprise impacting how work is done.

Data-informed factories take inputs from systems, manufacturing components, human assets, and operational areas to drive better manufacturing output, productivity, maintenance, inventory tracking, supply chain management, and job scheduling and management. The smart factory allows for those staff who work off the production floor — such as accountants, sales and marketing staff, and c-suite leaders — to have shared information to drive decision-making and collaboration.

Impact of the fourth revolution

Industry 4.0 refers to the revolutionary impact of core technologies. The Internet of Things (IoT) creates dramatic new ways for objects outfitted with sensors, storage, and wireless capabilities to track, measure, and communicate. Massive analytics programs capture data from IoT objects and machines. Powerful analytics programs provide for the collection, reporting, and display of data that helps foster better decisions and information about performance and needs.

The growth of cloud computing also plays a key role, as companies can bring disparate systems together under enterprise resource planning, business intelligence, and customer relationship management functions that sit virtually, giving employees access to data and the ability to manage the business in a cohesive and collaborative way. New technologies are emerging — from 3D printing to virtual reality tools — that provide new opportunities to create parts, conduct maintenance, and assist customers and consumers.

Defining a smart factory

The smart factory has several nuanced components. First and foremost, it expands on the notion of automation, which has often been the mechanized completion of a singular task.

The smart factory takes that functionality to a far more sophisticated level. Artificial intelligence and sensor-enabled items allow for business processes and physical machines to be integrated in new ways. These new tools allow for machine learning to optimize performance and efficacy, in many cases faster and more efficiently than humans can.

Smart factories also can tie in production through the supply chain, developing deeper relationships with suppliers and enabling better performance and sourcing.

What’s so smart about smart factories? It’s the ability to insert more flexibility into production through self-optimization (where self refers to the factory itself). These factories learn in real time and can self-adapt and self-adjust, operating with autonomy through complete production cycles.

Manufacturers today face mounting pressures, not only from competitors but also changing and more demanding expectations from customers and the public. They face the near-constant threat of digital disruption from new players, many of whom were not previously in the manufacturing space, that can erode market share. Companies need to continue to innovate new products, improve existing ones, and identify new opportunities for products or services related to those products that can be commoditized.

ERP solutions

The smart factory collects, stores, and displays data that allows for better decisions in real time.

Five features

Here is a look at five fundamental features of today’s smart factories.

  1. Connectedness. The connected nature of smart factories is the most obvious, and most important, feature.  Connectedness begins with a reliance on existing data sets that can be integrated with “new data” generated from assets connected with sensors and communication tools. This new data can provide information on performance, temperature, maintenance needs, accuracy, and usage. Fusing together the new data and traditional data in real time allows for better decisions. Collectively, these data provide a holistic view of performance and operations.
  2. Optimization. The smart factory helps maximize performance and reduce waste. These efficiencies are the result of operations that can now be accomplished reliably with little to no manual work. Among the functions that benefit in a smart factory are the tracking and scheduling of jobs, automation of workflows, asset synchronization, and efficient energy consumption.
  3. Transparency. With real-time data flowing seamlessly into sensors and databases, operations and evaluation of those operations are transparent. Information is no longer inaccessible or unrelatable to other information. Instead, the entire organization can see and understand the data, taking that information and using it to develop insights and adjust procedures, policies, and even entire business models. With that transparency comes the availability of tools that protect that data, with role-based access, real-time alerts, and active tracking and monitoring.
  4. Proactivity. Anticipation is often a challenge in the factory setting. Inventory calculations can be off. Wastage can throw off production schedules and availability of materials or delay deliveries. Anomalies that can disrupt operations, require repairs, or throw off quality control are hard to detect. Safety and maintenance issues may go unnoticed. The smart factory allows for more predictability, with intelligent systems using historical data, real-time measures, and learned insights to improve productivity, yield, uptime, and safety.
  5. Agility. Change does not always come easily to the factory floor. Production issues, inventory gaps, or mechanical problems can cause major quandaries. The smart factory can adapt to those changes, often reconfiguring machines or material flows to adjust rapidly with minimal disruption. As schedules change, the smart factory can minimize downtime and speed up changeovers.

Smart factory benefits

Here is a closer look at the key benefits a smart factory provides:

  • Asset visibility. Workers and corporate leaders know in real time how assets are performing, helping inform decisions about usage challenges and productivity.
  • Asset efficiency. The smart factory generates massive amounts of data that inform operations, improve uptime, maximize capacity, optimize scheduling, and lower changeover time.
  • Cost reduction. Smart factories help reduce wastage, drive efficiency, and manage inventory acquisition and storage. Data can help inform decisions about hiring and purchasing. Better supply chain communication pushes organizations to better sourcing outcomes and relationships.
  • Quality. Products are made with precision, fewer flaws, less scrap, shorter lead times, and better yields. Improved quality also leads to fewer warranty and repair costs and fewer recalls as products have fewer defects and higher degrees of functionality.
  • Sustainability. Less waste, scrap, and inefficiency provides for a deeper commitment to sustainable manufacturing, and a smaller manufacturing footprint, which can be leveraged in community relations, public relations, and marketing efforts.
  • Safety. Smart factories help boost wellness as tasks are completed and monitored by machines, freeing up workers for safer and more critical work. There is less potential for human error, leading to not only safer manufacturing but also safer products.

For your consideration

For companies looking to move to smart factories, there are several factors that merit significant conversation and analysis. While not all of these areas are pertinent to every organization, they provide a framework for the work ahead.

  • Data management. Data are the lifeblood of the smart factory. Without the right systems to collect, store, interpret, and use data, the smart factory will never reach its full potential. Data storage and usage needs will inevitably expand over time, requiring dynamic, scalable systems that can grow as necessary.
  • Technology. For a factory’s components to “talk” with each other, with humans, and with databases, the right valves, sensors, machines, tools, and material handling components need to be in place. The technology needs are myriad and complex, which is one reason many companies use integrated platforms to address the many requirements for a robust smart factory. These platforms provide for enterprise resource planning, business intelligence, customer relationship management, analytics, and storage, and are adaptable to account for past, emerging, and future technologies.
  • Governance. Companies may be dazzled by the potential for integration and automation, but those tools need to be deployed and used with an underpinning of planning and processes. Decision-making, oversight, and processes may need to be radically overhauled to meet the complexities of the smart factory.
  • Personnel. People will still be needed, though some roles may be eliminated or rethought. Change management will be critical to help employees adapt to new tools, new roles, and new thinking about their work.
  • Security. While physical security has long been a consideration for factory leadership, the smart factory requires a significant investment in cybersecurity. As systems, objects, tools, and products become more connected and outfitted with data and tools, those items become susceptible to outside attack.

Having the right partner

The potential of the smart factory is evident, but having the right tools and partners available to help plan, implement, train, and use these new functions is important. At NexTec Group, we provide manufacturers with the insights and implementation needs that allow for rapid selection and implementation.

We work closely with top providers of the systems necessary to make the smart factory an effective, dynamic entity. Enterprise resource planning (ERP) platforms help bring the factory operations, back-office functions, and other systems, together in an integrated tool to allow for the collection, sharing, and use of data. We work with top ERP providers like SageX3 to deliver the right solutions to companies looking to improve efficiency.

Download the NexTec Corporate Brochure to learn more about how NexTec Group can help your manufacturing company find the ERP solution that supports today’s smart factories.