For any manufacturer, the idea of turning a traditional factory into a “smart” facility can be a daunting proposition. While it can be a boon for the manufacturer that invests time and money in this transformation, even the most ambitious plant manager has reservations about the real value of this transition—and how to get started.
While the complexity of achieving a smart factory may be a deterrent, many shops are considering the change. According to a 2023 survey of manufacturers in 13 countries conducted by Rockwell Automation Inc., the vast majority of respondents said they use or plan to use smart manufacturing technologies. The list includes digital twins, artificial intelligence (AI)-based data analytics and advanced information security, just to name a few.
The survey also revealed that many small-to medium-sized manufacturers (SMMs) feel “overwhelmed” by the options and solutions available, which is why guidance is necessary.
A key advantage of going smart is to access information and share that information across the entire factory, making everyone’s job more efficient and effective, while achieving the holy grail of optimal productivity.
For decades, departments and processes operated in silos, and information, data and insights were locked away inside them. While a treasure trove of information was gathered, it wasn’t shared across functions or among workers.
In fact, most SMMs have built out homegrown solutions that are specific to different groups, but they don’t have the capability to share that data with other departments. A smart factory deployment can minimize such silos and start to bring all functions together.
“A smart factory deployment is most effective because it can begin the process of breaking down silos in different departments,” says Doug Johnson, director of product management, Plex, by Rockwell Automation. Plex, based in Troy, Mich., makes software that connects, automates, tracks and analyzes manufacturing operations.
“This enables information to be shared in real time using a single source of information for those who are responsible for making manufacturing decisions,” Johnson explains.
Removing silos can help a company become more competitive. And, as the digitization effort ramps up, an organization shouldn’t be afraid of starting small with pilot programs that can be easily measured to ensure the technology functions as intended.
For any digitization journey, experts say the first step is a complete review of current operations to get a birds-eye view of the entire factory from a data perspective. This includes everything from the layout of the plant floor to the specifics of each machine. No piece of data is unimportant or should be ignored.
“This level of fidelity is going to show you how all of your operations run, and it is essential if you want to start down the path of becoming a smart factory,” says Rahul Garg, vice president of industrial machinery and SMB, Siemens Digital Industries Software, Plano, Texas.
Once the manufacturer gains the necessary visibility, it can start to evaluate and implement more consistent processes to gain a better and holistic view of what is happening on the shop floor. As a manufacturer plans its digitization strategy, it should start with solving problems that can demonstrate ROI as part of a crawl-before-you-walk approach.
A common misstep many SMMs take, for example, is to try to bite off more than they can chew. But starting with smaller projects can help justify spend when every dollar counts and downtime is not an option.
Instead of buying an entire suite of software products, for example, SMMs can opt for software subscriptions and add functionality as their needs change. For small companies that might not have ready access to large amounts of capital, this is especially attractive.
“Being able to house your solution in the cloud with a third-party provider will enable IoT applications and access to a cloud-based infrastructure that allows for a more seamless process that can give you insight into your data much faster,” Garg notes. “As technology continues to evolve, the product becomes more complex, so it’s useful to be able to lean on a technology partner to help you implement.”
Once in place, there are myriad benefits that a smart factory will reap, with efficiencies gained at multiple levels. These can include switching to small motors that yield energy efficiency improvements or line-level changes that improve throughput.
“It’s okay to start with a small pilot program when you’re ready to dive in,” says Matt Taylor, vice president of projects and engineering, MxD, the Digital Manufacturing and Cybersecurity Institute (Chicago). “But we recommend that a manufacturer has a strategic plan written first before investing time and money.”
As part of a pilot program it rolled out with 10 small factories across Illinois, Indiana and Ohio, MxD provided a simple, no-code solution for use cases, such as oil skimmer monitoring and fan vibration. The initiative saved time and money, while customers got a taste of the benefits of digitization on a small scale.
When starting small, an SMM should know what will take the least amount of time and energy to prove out a digitization investment. In other words, map out a specific set of problems to solve before getting started.
“Once your model starts to mature, then you will start to see more strategic value as you invest more time and money and begin to ascend the digitization ladder,” Johnson adds.
A strategic partner can help do a deep dive assessment and put forward the right strategy and product offerings to address needs identified through a pilot program. They can guide a small shop by sharing lessons learned from other manufacturers and apply them to relevant situations.
“We will help you build the right business solution and work alongside your team to ensure the process does what you want it to do,” asserts Plex’s Johnson.
Another good digitization resource is the National Institute of Standards and Technology’s Manufacturing Extension Partnership (MEP), a public-private partnership with centers across the U.S. and Puerto Rico.
MEP advanced manufacturing technology services help SMMs navigate technology options, develop an adoption strategy and define the scope of a project. They also can help find a local a supplier equipped to get the project up and running.
As the smart factory process is implemented, more data is generated. While this is one of the main objectives and benefits for manufacturers, Big Data also can bring unwanted threats. Digitization increases the attack surface for anyone looking to do harm, and there are a lot of bad actors adept at exploiting weaknesses in the manufacturing space.
According to the 2023 IBM Security X-Force Threat Intelligence Index, extortion was the most common attack impact on organizations, with 30% of attacks aimed at manufacturers.
“Manufacturers are an attractive target due to downtime and the fact that the information they house internally is extremely valuable,” Taylor says. “If someone takes you down, you will be incentivized to get back up and running as soon as possible, and the wrongdoer knows this.”
This is why cybersecurity upgrades should be a part of the smart factory process. With so much more information available, it invites hackers to see how they can’t use it to their advantage.
Much of what needs to be accomplished when deploying smart factory solutions focuses on creating more efficient processes and better decision-making across business functions. No smart factory process would be complete without examining how AI plays a role. AI in manufacturing is reaching a wider and wider level of adoption.
Retrocausal, a platform provider for manufacturing process management based in Redmond, Wash., uses AI to address the labor shortage crisis in manufacturing. Its Copilot software allows an untrained worker to become productive on a new process within minutes and deliver the productivity and quality of someone with months of training. This leads to greater first-time yields—calculates the percentage of items or products going through a process that are completed correctly, without the need for any rework or correction—and less assembly-related scrap costs.
Beyond individual performance, it can equip production supervisors and junior industrial engineers with the capability to overhaul workstation design and rebalance assembly lines, both of which are key components of a smart factory.
“Retrocausal’s Copilot software is not just an innovation; it’s a paradigm shift in manufacturing, ushering in a new era of operational excellence and profitability,” asserts Kleida Martiro, partner, Boston-based Glasswing Ventures, an early stage venture firm focused on data and security startups, where she specializes in data science and product management. “Their ability to address the industry’s most critical pain points and deliver measurable results is as transformative as it is visionary.”
In summary, proponents say smart factories are more efficient, cost-effective and more agile to address changing customer demands, enabling exciting possibilities for innovation, sustainability, resiliency and competitiveness. For small shops, taking best practices from large manufacturers that have proven out concepts and demonstrated use cases can expedite their journey to Industry 4.0 success.
A smart factory is a cyber-physical system—collections of integrated physical and computer components to operate a process safely and efficiently—using advanced technology, including AI, to analyze data and automate processes. A smart factory “learns” over time using the data it gleans and analyzes.
According to SAP, a leader in enterprise application software, the three main components of a smart factory are:
Data Acquisition: AI and modern technologies enable manufacturers to collect disparate sets of useful data across their operations and the supply chain. Sensors and gateways allow connected machines to gather data into the system, and AI-powered systems can compile datasets related to performance, trends and logistics.
Data Analysis: Machine learning and intelligent business systems use advanced analytics and data management solutions to make sense of data. IIoT sensors can warn workers when machines need repair or service. Workflow efficiencies can be studied over time, and datasets can be compared and analyzed to inform digital factory optimization and supply chain forecasting.
Intelligent Factory Automation: After data acquisition and analysis, workflows and instructions are sent to machines and devices within the system. Devices may be within the factory or in the supply chain. Smart workflows and processes can be continually monitored and optimized. For example, if a shipment of raw materials is delayed, a manufacturer can prepare with extra inventory to maintain business continuity.
In a 2019 study by Deloitte, respondents reported that their companies enjoy as much as 12% gains in manufacturing output, factory utilization and labor productivity after investing in smart factory initiatives.
Moreover, the authors predict that “manufacturers with smart factories will likely surpass traditional factories with 30% higher net labor productivity by 2030.”
Additional research conducted by McKinsey and the World Economic Forum estimates the potential value creation of manufacturers and suppliers that implement Industry 4.0 in their operations at as much as $37 trillion in 2025.
Talk about a smart investment.
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