The Vital Assets Needed for Smart Factory Initiative Success in 2023

Although global manufacturing has made tremendous strides in optimizing labor productivity and asset efficiency, the next leap in operational performance can only be unlocked through optimizing operations from manufacturing to supply chain.

This notion of optimizing processes within manufacturing and supply chain functions to achieve operational excellence is broadly defined as smart manufacturing. The term arose in the mid-2000s, prompted by the advent of new technologies such as the industrial internet of things (IIoT) and artificial intelligence (AI).

Similar concepts like digital and cyber manufacturing converge under the smart manufacturing umbrella. Global standards to further define smart manufacturing are still a work in progress. However, a vast majority of large manufacturers are accelerating investment in smart factories.

How Does a Smart Factory Work?

Smart factories combine human creativity, digitally connected machines, assets, and AI-powered analytics. This augmentation of human intelligence with machine intelligence helps fuel adaptability and speeds up the capacity to customize outputs based on real-time data and insights. The visibility, agility, and resilience of smart manufacturing make it vital for more efficient supply chain models and overall business operations. Today, dozens of so-called smart factory technologies have given birth to a myriad of smart manufacturing use cases.

Smart factory technologies can be categorized into three buckets:

Another way to describe a smart factory is the ability to create a closed-loop, data-driven optimization of end-to-end operations. This closed-loop smart factory undergoes continuous procedural improvement to self-correct and self-optimize — it can self-learn (and even teach humans) to be more productive, adaptive, and safe. Generally, the first milestone of the smart factory is to use advanced analytics to drive decision support. However, the ultimate goal is to reach a stage of operations where the smart factory can self-optimize performance across a broader network, self-adapt to and learn from new conditions in real- or near-real time, and autonomously run entire production processes.

The closed-loop optimization paradigm of a smart factory is based on three iterative steps:

Getting Started: The Power of Modernized ERPs

For any organization, enterprise resource planning (ERP) is the central location where all operational and financial data is collected, maintained, and shared — making ERP the de facto single source of truth. When you consider ERP in conjunction with its other components, such as WMS, MES, and PLM, it has a strategic vantage point that provides end-to-end visibility of any organization's operations. Hence, the modernization of ERP and transition to the cloud is the most vital step to bring the smart factory to fruition. A cloud-based ERP makes applying AI/ML to operational data possible. The sheer span and reach of an ERP system make it an obvious first choice for organizations looking to achieve scale in smart factory initiatives.

Organizations looking for quick wins and rapid scalability of smart factory initiatives can realize the enormous value of cloud-enabled ERP solutions with these vital use cases:

Smart factories are a journey, not a destination. The capabilities of a smart factory will expand with the digital maturity of its owner. Manufacturers embarking on smart factory initiatives must consider long-term scalability. Cloud-based modern ERP is the starting point for creating an integrated platform that allows a smart factory to combine fast incremental innovation with deployment at scale.

Chirag Rathi is Industrial Manufacturing Strategy Lead for Infor.