Digital Factories – A Potential Approach For Efficient Manufacturing Systems

The manufacturing industry is undergoing rapid advancements in technology, changing customer demands, and an endless supply of data. These factors have not only made digital transformation possible but a necessity for survival and growth.

Manufacturers must remember that technology alone is never the solution. The companies that successfully transform are the ones that embrace change in all aspects of their organization across all departments. Coupling technology with organizational, operational and business model innovation is the way companies will remain competitive in the future.

Digital Factories - A Potential Approach For Efficient Manufacturing Systems

What is Digital Transformation?

The profound change in business activities, process, competencies, and models to fully leverage the opportunities of technology is the process of digital transformation. Digital transformation has already had a significant impact on industries. Financial services, for example, have seen innovations such as online and mobile banking, contactless payment method, automated investment platform and digital currencies.

In retail, technology has impacted both in-store and online shopping experience. Inside the store, technologies such as mobile point-of-sale systems, endless aisle kiosks, and digital signage are all transforming the retail experience.

Across industries, from healthcare to automotive to telecommunication, digital transformation is disrupting the way businesses and customers interact. While disruption creates challenges, it also leads to newer opportunities for companies who wish to be innovative and agile.

What’s Driving the Industry?

The manufacturing industry has reached an inflection point, and transformation in manufacturing activities, processes, and competencies has become critical for survival. Companies must either adapt or fall behind and lose everything. Some of the factors that have triggered the transformation are:

1. Commercial viability of new technologies

Transforming technologies have existed for a long time now. But only those companies that can commercialize these technologies for real-world use and implement them in viable and strategic ways will survive in the future.

2. Unprecedented access to data

It’s common knowledge that companies have access to staggering amounts of data led by cheaper and readily accessible devices. However, the important thing to note is that almost 70% of data goes unused by manufacturing companies. This is a wasted opportunity that needs to be addressed if factories want efficiency, reduced error rates, increased production volume or more accurately predict demand.

3. The rapid pace of innovation and change

We all are aware that technology has been constantly changing to address the dynamic changes in any business enterprise. Today’s market is volatile, fast-moving and difficult to predict. Customers are demanding more than ever and manufacturers need to respond to changing market forces. The pace at which a business communicates with their stakeholders – customers, vendors and employees has become shorter and critical for survival.

4. Proximity to end user

With the rise in wages and increase in automation, companies are reducing their cost of producing goods and thus, relocating facilities and reorganizing processes closer to the end user. Almost 75% of companies investing in new digital factories named regionalization, customer proximity, and individualized production is the main investment reason.

Technologies powering the revolution

While technology isn’t everything, implementing newer technologies will largely be complex and costly. To help you understand better which innovations have the most impact, below are six technologies that will transform the industry in the coming years.

1. Industrial Internet of Things

The Industrial IOT is a network of computers, sensors, devices and objects that collect and share huge amounts of data. As the companies race to implement this technology, IIoT market is estimated to reach $123 billion by 2021. Many companies are starting with operational and cost improvements as their main reasons for investing in IIoT.

2. Wearable and augmented reality

AR and VR have created exciting opportunities for industrial wearable that are designed to be both safe and easy to use. Some examples include equipping safety glasses with heads-up-displays that show blueprints or maintenance plans. Some manufacturers are also taking AR and wearable technology to the customer by showing customers what a product would look like before they buy it.

3. Additive manufacturing

Known as 3D printing, additive manufacturing is the process of making a product layer by layer instead of using molding or subtractive methods. Companies can produce prototypes faster and at a lower cost than previously possible, and designers can make adjustments more quickly. As the technology improves, 3D printing enables individualized production, increases flexibility, reduces material waste, and improves quality.

4. Advanced Robotics

Robots have been involved in manufacturing for decades and dramatically increased productivity and efficiency. Leveraging data and machine learning technologies, advanced robots will be able to learn from historical data sets and be able to do more than what they were originally programmed for.

5. Blockchain technologies

Manufacturing stands to be one of the sectors most impacted by blockchain as the technology matures and adoption increases. The block chain is a decentralized digital ledger that is secure, verifiable, and transparent. Any transaction, such as the movement and ownership of components through a supply chain, can be recorded. Manufacturers with complex supply chains will be able to gain complete visibility across the entire network of vendors and suppliers, thereby reducing wastage and costs.

6. Artificial intelligence and machine learning

Using advanced analytics software, AI, and machine learning, organizations can transform all elements of their business. Training data can be given to machines to improve performance, reduce error rates, or develop new processes. Real-time information can be provided to maintenance workers through wearable. Customized products can be built more rapidly to reach new customers.

Risks to Overcome While Transforming

Despite all advantages, there are severe issues that need to be resolved or taken care of. These issues have slowed down the adoption of newer technologies and limited the impacts of digital transformation in manufacturing. Few of them are,

1. Security

With so many devices producing valuable data, modern factories face threat of cyber attacks and breaches. Vulnerabilities could lead to stealing of sensitive and confidential data or disrupt normal business operation.

2. Organizational structures and employee skill sets

New skill sets like ability to interpret data to make decisions, integrate technology and respond to sudden shifts are very different than what manufacturers previously hired. Thus, the organization has to become more transparent so that information can flow across departments.

3. Interoperability

Without interoperability, factories miss out many of the benefits that come with digital transformation and lose visibility across the entire value chain.

Adapting to digital transformation now, is changing the future

Digital transformation is here to stay. Companies have to plan on how they will navigate the complex and dynamic changes. To do so successfully, manufacturers need to understand where are the opportunities to transform and where they want their business to be in the coming five or ten years. Instead of waiting and reacting to change, manufacturers must be the driving force that anticipates change and embraces opportunities that come with it. NOW is the time for digital transformation.

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