Smart Factory - The next generation of manufacturing

The smart factory is the future of production. Thanks to advancing digitization and the Internet of Things (IoT), machines are increasingly organizing production processes autonomously. For most companies, the smart factory is still a vision of the future. Time to change this.

We explain how a smart factory works, present benefits and application examples, and explain why you should start transforming your organization now.

With Smart Factory Technologies to Industry 4.0

What is a Smart Factory?

The Smart Factory is a central concept of Industry 4.0. While the first step of the digital transformation involved equipping individual machines with sensors and software and developing them into cyber-physical machines, the focus is now on their beneficial networking. But what exactly does Smart Factory mean?

Definition: Smart Factory

A smart factory is a production environment in which machines, manufacturing plants and logistics systems communicate with each other and organize the manufacturing process largely autonomously. Humans hardly ever have to intervene, but are limited to monitoring the processes.

Smart Production - How the processes work

The central element in a smart factory is smart products, i.e. products to be manufactured to which RFID chips or tags are attached, for example. Via wireless communication – via WLAN, 5G or Bluetooth – machines can read the RFID and thus know where and in what condition the products are.

Previously, production processes were monitored by a central control unit. In the event of problems, it was necessary to report back to them in order to then examine how best to deal with disruptions, delays or bottlenecks. This intermediate instance is eliminated in smart factories. This is because communication takes place here between the product and the manufacturing plant, or more precisely: between the product and all the machines and IT systems involved in production. In this way, more flexible and faster solutions can be found to continue the production process.

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Not least because production no longer necessarily takes place in the traditional production line. Audi’s Smart Factory, for example, shows that the production line can be replaced by modular stations to which the product moves. Is a station occupied? Via wireless communication, the product learns about this and looks for an alternative station. Ideally, therefore, the production process takes place in a flexible sequence depending on the workload of the individual stations.

The number of employees working in the production halls shrinks in the smart factories to a fraction of the previous number. Human resources are primarily used for monitoring smooth operations, optimizing processes, and the Maintenance of the machines needed. In the latter case, they will also play an increasingly minor role in the future, since machines will be used in the course of Smart Maintenance can avoid many problems or fix them yourself.

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Work instructions can be displayed directly in Digital Engineering

Smart Factory: 5 advantages for companies

The Smart Factory has various advantages for companies compared to traditional line production.

  1. Reduced costs

After the initial investment in new systems, the smart factory is significantly more cost-effective in ongoing operations, as fewer production staff are needed, inventories can be reduced due to greater transparency in the production process, and changes in demand can be responded to more promptly.

  1. Higher efficiency

Since the stations in the production process communicate with each other and flexibly adjust the production sequence, downtimes and stoppages are minimized and free resources are used optimally.

  1. Shorter manufacturing times

Optimal utilization of the production stations significantly reduces the manufacturing time for a product. At the same time, companies can achieve higher output at low cost. Also Digital Engineering plays an important role in reducing manufacturing times.

  1. Higher agility

The link with supplier, logistics and sales systems ensures that production learns early on when changes in demand or deliveries are imminent and can adjust production accordingly.

  1. Individualized production

Small batches and one-off productions can be produced much more cost-effectively in the Smart Factory than in traditional mass production and open up new business areas for companies.

Smart Factory: Examples from practice

In theory, the smart factory concept sounds promising. But how does the implementation succeed? If you want to see a smart factory in action, take a look at the automotive industry.

Audi already commissioned one of the first smart factories as a pilot project in 2016. At the time, the manufacturer expected a cost saving of 20 percent from the changeover.

Another automaker that recognized the trend early on is Daimler . He produces the Mercedes-Benz S-Class and the electric EQS model in his smart factory “Factory 56”. At Daimler, plants and machines are networked via WLAN and 5G networks. One focus of the automotive manufacturer: evaluating the data collected by the systems in order to be able to realize further process optimizations.

A third company that is already living the Smart Factory vision of the future is the drive technology manufacturer SEW Eurodrive which is now also supporting other companies in implementing the new manufacturing concept.

But other industries are also moving in the direction of the smart factory. Examples of companies that have set out on this path include Siemens with its electronics plant in Amberg and Bosch Rexroth at its plant in Homburg.

Digital engineering reduces development costs

What can companies do?

The proportion of smart factories is increasing worldwide, and new corporate standards are gradually developing from former pilot projects. Germany belongs to a Capgemini study according to the Capmini study, are among the leading nations in the new production method.

German companies recognize that without efficient and flexible production they will no longer be competitive on the world market in the future and that time is a decisive factor.

Because the transformation of a traditional production into a smart factory takes time. Between seven and 15 years according to experts. The introduction of smart production is not just about replacing machines. A Smart Factory is accompanied by an entire restructuring of production. In addition, employees need to acquire new skills. So the sooner you start the transformation process, the better.

There can be no universal roadmap for transformation. Because what is smart depends on your business context. Smart Production is individual.

Depending on your current level of digitization, they may first need to digitize the individual production lines. If you already have cyber-physical systems, you can supplement the basic technologies and add new smart factory processes.

Here are three general tips to keep in mind for transformation

  • Modular and scalable IT infrastructure

As digital technologies evolve at a rapid pace, it is critical to build a modular and scalable IT infrastructure that brings you step-by-step closer to the Smart Factory, while providing a performant foundation for future developments.

  • Cross-company networking

For the success of a smart factory, it is necessary to network IT systems across departments and break down data silos. Information from the production floor must be linked to supplier systems, as well as to accounting or sales systems. Only in this way can the processes coordinate autonomously and can employees perform the necessary data evaluations to reduce sources of error and improve efficiency.

  • change management

Last but not least, involve the affected employees in the transformation process. Explain why the changes are necessary to ensure competitiveness and jobs. In this way, you improve the acceptance of new technologies and work processes, create readiness for further training and activate the creative potential of your organization. And that will remain the most important success factor in the VUKA economy of the future.

Networking and data visualization in the smart factory

Conclusion: Smart Factories relevant for every manufacturing company

Automation, the Internet of Things and artificial intelligence – digitization is making production smart and processes more efficient. In the Smart Factory, the new technologies are combined in such a way that their advantages are multiplied. For companies, this means more flexible and cost-efficient production, including of individualized products.

Smart factories can be implemented in any manufacturing plant. Their structures are clearly superior to the previous line production. It is therefore only a matter of time before the smart factory establishes itself as the new standard in manufacturing. However, the road to this optimized production is long. If companies want to remain internationally competitive, they should therefore start now to take the necessary steps to transform their organization.

Of course, at ALEGER we can support you with our AR hardware and software for the conversion to a Smart Factory.

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