Published on 11/08/2016 | Operations
Smart Manufacturing transforms traditional factories from cost centers into profit centers that progressive businesses will strategically invest in to increase sales.
Traditional factories are cost centers. They make more and more stuff – while increasingly cutting costs. Consumers love buying all this affordable stuff. But to keep up with their demands, businesses have had to lean production to bare bones. Some relocated to lower cost regions, and others even totally outsourced their production capabilities.
A new era of 21st century Smart Manufacturing will optimize plants and supply networks by starting to transform them into profit centers. Progressive businesses have already begun gathering information and manufacturing intelligence by investing in highly automated and IT-driven production. This manufacturing intelligence enables the factory floor to become a profitable innovation center.
Are profound changes coming in the way goods are manufactured? A major shift to the next generation of highly-automated and IT-driven factories — or “Smart Manufacturing” is expected to occur in three phases.
In its first phase, smart manufacturing will interconnect and better harmonize individual stages of the production process to advance plant-wide efficiencies. A typical manufacturing plant uses a growing number of different information technologies (IT), with a microprocessor chip on nearly every sensor and motors/actuator, computerized controls, and production management software. Each one manages a specific stage or operation of a manufacturing process. However, each is an island of efficiency.
Smart manufacturing must first bridge and integrate these islands, enabling data sharing throughout the plant. The convergence between machine-gathered data and human intelligence will advance plant-wide optimization and enterprise-wide management objectives, including substantial increases in economic performance, worker safety and environmental sustainability. The emergence of this “manufacturing intelligence” will usher in the second phase of smart manufacturing.
Connecting the multitude of different in-plant data sources with high performance computing platforms will make it possible to develop significantly higher levels of manufacturing intelligence to optimize factories of the future. Complete production lines and entire plants will run with real-time flexibility — which is not feasible now — in order to conserve energy and optimize outputs. Businesses will be able to develop advanced models and simulations of manufacturing processes to improve current and future operations.
The second phase of smart manufacturing also will connect factory-specific information to data throughout the supply chain — from raw material availability and customer demand through the delivery of finished goods. It will facilitate the use of smart grids to schedule energy-intensive activities during low-demand periods and slow production during peak energy demands. It will enable greater product customization, new product simulations and new, more efficient processes. It will support the production of safer products and precisely defined, faster product tracking.
The companies and countries that strategically start this journey toward smart manufacturing and are first to reach the third phase — “manufacturing knowledge” will earn long-term competitive advantages well into the 21st century. As that manufacturing intelligence grows into knowledge, it will inspire innovations in processes and products that comprise smart manufacturing’s great promise — a major market disruption such as a $3,000 automobile or a $300 personal computer
Smart manufacturing’s third phase will transform industry in a similar way to how the strategic use of information technology transformed the business model — and consumer shopping behavior — at Amazon.com. Amazon began 15 years ago as an online bookseller. By capturing extensive data about consumers’ book-buying habits, Amazon developed extensive knowledge about its customers’ lifestyles that enabled a “disruptive” shift in its business model. Within a decade, Amazon expanded its product offerings to span many new categories. It is now the largest U.S.-based online retailer. Books and other media represent only 52 percent of its $24 billion dollar net sales. As anyone who has ordered from Amazon knows, its Web site will suggest products you might like and tell you what other consumers bought when they considered a product you are viewing. In short, Amazon makes smart use of its industry knowledge to bolster its competitive advantage.
Smart manufacturing will deliver a similar, extraordinary shift in the competitive landscape of American industry. It will reverse the flow of the 100-year-old industrial supply chains that forced consumers to accept whatever was mass produced. Flexible factories and demand-driven supply chains will change manufacturing processes to allow manufacturers to customize products to individual needs, such as medications with specific dosages and formulations. Customers will “tell” a factory what car to manufacture, what features to build into a personal computer or how to tailor a pair of jeans for a perfect fit.
This most dramatic — and competitively vital — third phase of implementing smart manufacturing will come from innovation spurred by this growing body of manufacturing knowledge. These will not be incremental or gradual changes — they will be game- changing, market-disruptive innovations in products and processes. Changes at this phase will push down prices, open new markets and offer a broader array of choices to a wider range of middle class consumers.
This comes at an incredibly unique period in the history of human civilization. According to a McKinsey report on global forces, the global middle class will double to be roughly 40 percent of the world’s population and will generate $8 trillion in consumer spending power by the end of the decade. This will accelerate demand for cars, packaged goods and personal care products in places like China, India and Latin America. Smart Manufacturing is ideally suited to support this rapid surge in global consumer products production.
Early adopters foresee a smart manufacturing model flexible enough to respond to global consumer demand and bring to life innovations such as the electric-powered car or other game-changers. Flexible factories can be more quickly reprogrammed to provide faster time to market today and the next generation of mass customization. Smart manufacturing marries information, technology and human ingenuity to bring about a rapid revolution in the development and application of manufacturing intelligence to every aspect of business. It will fundamentally change how products are invented, manufactured, shipped and sold. It will improve worker safety and protect the environment by making zero emissions, zero-incident manufacturing possible. It will also enable an interconnected, efficient global industrial ecosystem.
This website is dedicated to taking you on the manufacturing industry’s transformational journey as smarter processes and sustainable practices deliver greater efficiency and excitement – whether you are a consumer who wants better stuff, a manufacturer who wants to learn how to make more money, or a talented individual who wants a great 21st century career. You’re in the right place!
