Why Smart Manufacturing Is On The Rise
Digital transformation is occurring across a broad spectrum of industries, and manufacturing is no exception. In fact, the transition to smart factories is rapid. Why is this major shift happening? Because the promises of smart manufacturing – including increased productivity, reduced costs, new capabilities and improved employee safety – are necessary to stay competitive in the years ahead, according to Industry experts.
What is a Smart Factory?
A smart factory uses an interconnected structure involving a combination of production, information and communication technologies that can integrate and improve processes across the entire manufacturing environment.
A variety of technologies, such as cloud computing, the Internet of Things (loT), artificial intelligence and machine learning, are being used in smart factories to analyze data and drive automated processes. With the intelligent and instantaneous nature of machine-to-machine communication, manufacturers gain faster processing, resulting in greater productivity, efficiency and cost savings.
Statistics show that manufacturers are increasingly integrating digitalization into their operations. According to a survey by Gartner, 74% of manufacturers have initiatives or strategies under way. Another study, by market intelligence firm Fortune Business Insights, predicts that the global smart manufacturing market size will grow from $277 billion in 2022 to $658 billion by 2029.
Trends Driving the Growth of Smart Manufacturing
Several factors underlie the rise of smart manufacturing. Most notably, the COVID-19 pandemic resulted in product shortages around the world due to manufacturing disruptions and supply chain issues.
Proponents of smart factories say the pandemic accelerated an already existing need to shift to digital factory technologies for greater efficiency and lower costs.
Other factors driving the wwitch to smart manufacturing include:
- Emerging Technologies: With vastly improved computational power and connectivity, data analytics capabilities, the rise of IoT devices and next-generation technologies like AI and robotics, the technologies now available in the manufacturing industry offer greater capabilities than ever before, prompting growing adoption.
- The Amazon Effect: Increased online shopping and its effects on brick-and-mortar stores, known as The Amazon Effect, has also affected the manufacturing industry in a big way. Consumers now expect faster, even one-day, delivery and cheaper products. For manufacturers, this has led to the need for faster production, lower costs and greater warehousing capacity to keep up with e-commerce demands.
- Greater Customization: Increased product personalization and customization is a growing consumer trend with game-changing potential for the manufacturing industry. Millennials, a generation fluent in the rapid-response cadence of social media and online buying, are leading the way in their desire for personalized products.
Customization presents special challenges for the manufacturing industry, most notably the need to tailor a mass-produced product to meet individual customer demands, without a significant increase in cost or delivery time. Digital manufacturing plays a crucial role in enabling customization to proceed successfully through the use of technologies like 3D printing, additive manufacturing and robotics.
Many Smart Factories Fail – So Choose Your Partners Wisely
Consider this startling prediction from Gartner: By 2025, three out of five smart factory initiatives will fail due to a lack of supply chain integration, resulting in significant cost constraints and customer service issues.
The analyst firm goes on to list the three most substantial challenges affecting smart factory success: access to skills, cybersecurity and competition for resources. Gartner also calls out organizational complexity, legacy processes/process reengineering and integration as potential obstacles.
Gaining an Advantage with LightEdge
To succeed in smart factory transformation, companies need experienced partners with services custom-made to fit their business model. LightEdge has already helped many manufacturers at various stages of their digitalization journey. With a wide array of specialties including cybersecurity, data backup, cloud strategy, analytics implementation and supply chain resilience planning, LightEdge is ready to help you chart a smooth path to digital transformation.
If you would like to learn more about how LightEdge can help your manufacturing organization advance in its digital journey, please download our “Smart Factories” white paper or contact us at lightedge.flywheelstaging.com/contact-us/.
