The rise of the Digital Factory

Industrie 4.0, digital factory, Energy 3.0In the era of the Internet of Things and cloud computing, modern manufacturing processes become increasingly digitized, which offers promising prospects with regard to industrial efficiency and productivity.

There is no shortage of ways of naming this new trend in the industrial world: “digital /cyber factory”, “integrated industry”, “Industry 4.0”, “innovative factory”… Equipment, manufacturing sites and production chains are increasingly interconnected, sharing information in real time in order to improve the flexibility and cost-effectiveness of the supply chain. The Internet of Things (IoT) helps digitize factories, making them fitter to meet the challenges of the 21st century economy (international competition, increasingly shorter production and innovation cycles, growing demand for customized goods, etc.)

The concept of digital factory was coined at a manufacturing technology show at the 2011 Hanover Fair. Two years later, a German working group published a report underlining the role of integrated industry in Germany’s manufacturing economy.

IoT and Big Data, the real-time information revolution

According to Benjamin Wesson, the vice-president of Product Management for M2M Solutions at SAP, the Internet of Things is nothing more than a new term actually referring to older techniques used to improve logistics processes, such as radio frequency identification (RFID). In his view, “fleet management was one of the first successful implementations of the Internet of Things. Companies like UPS have been using this for years to track vehicle location, hard stops, rapid acceleration, sudden turns, etc. They’ve done fairly sophisticated analysis of the data and they’ve used this to implement new policies (e.g., no left turns) that result in cost savings for the business”.

Over the past few years, machine-to-machine (M2M) communication techniques have evolved rapidly, as well as the actual devices they can be applied to – from television sets to refrigerators. This revolution is also taking place in the manufacturing world, as the IoT / M2M market is set to grow exponentially: according to the American advisory company Gartner, by 2020 it should represent a 1,900 billion-dollar value addition to the global economy – the number of interconnected objects will then have increased twelvefold.

The industrial sector has already begun to exploit the countless new possibilities the IoT offers to improve manufacturing processes. Factories have been introducing sensors to assess equipment operation and monitor production processes in real time. All data collected is continuously fed to various links of the supply chain (robots, other production sites, monitoring software, etc.). Big Data analytics tools make it possible to detect instantly – and even to prevent – technical failures, damage, inadequate assembly conditions or defects. With the Digital Factory, the manufacturing world can therefore proficiently improve cost-effectiveness. For instance, in the future maintenance teams will no longer work on a predetermined schedule but rather intervene according to the information brought to them by machines. Such optimization of human capital will leave more time for other key activities such as skill acquisition. Following a report he published on 26 November 2012, General Electric Chief Economist Marco Anunziatta pointed that in the energy sector alone, 52 million hours of work are necessary for equipment maintenance every year. He added that smart machines, combined with adequate enterprise resource planning software (ERP) could help energy companies save about 7 billion dollars a year. Moreover, this would also result in better energy efficiency and resource allocation within the factory.

“Integrated industry” will be more flexible, smarter, and more cost-effective; it will even be able to produce customized goods on a large scale, giving final users a say in the production process (e.g. by letting them choose components or design features).
Tomorrow’s factory

Stephan Biller, chief scientist for Manufacturing at GE, is convinced that “the digital factory revolution represents a paradigm shift as significant as that introduced by Henry Ford’s production chain.” Additive manufacturing or 3D printing, he adds, will be crucial in this breakthrough. Combined with digital factory technologies, it should both alleviate storage constraints and help companies meet the growing demand for tailor-made goods, opening the door for mass-customization on a just-in-time basis. 3D printing is also expected to stimulate innovation and accelerate the implementation of new ideas or designs.

A parallel trend is the emergence of a new generation of versatile robots fitted with increasingly reliable sensors, capable of performing complex tasks involving decision making. This will entail safer man-to-machine interaction and higher productivity, as BMW is currently experimenting in its South-Carolina factory, where robots help workers assemble vehicle doors, sparing them the hardest and most unpleasant tasks.

Challenges ahead: data analytics, cyber-security and regulation

The Digital Factory poses new challenges. Big Data (see above) requires not only the setup of reliable networks for easier data circulation and storage, but also the design of new data analytics tools in order to make the information collected meaningful and valuable. Data analytics is becoming an increasingly widespread means used by companies for accessing new and profitable information. According to a recent study by Tech Pro, Big Data has proved to be a growth factor to 82% of the companies which decided to implement it.

Another crucial issue is cyber-security. The increasing integration of digital technologies in the industry offers true opportunities but also introduces new threats and possibilities of nuisance given to ill-intentioned individuals. Those technologies can make the operating systems more vulnerable towards attacks. Security measures, proportional to the risks, are to be taken at the same time as their implementation. The issues faced here are those of both cost and feasibility of such protection measures. The multiplicity of vulnerability spots makes it complex to guarantee that the elements of the digital factory are neither too expensive nor too complicated to be interesting. Those issues must imperatively be solved: the necessity to prevent cyber-threats is real, in particular for the SMB, and can in no way be assured by a centralized surveillance in a context of systematic connectivity of the main objects and tools that form the production unit of the future.

For more information on integrated industry:

  • French study by  Gimélec on the Digital Factory : “L’industrie 4.0 : l’usine connectée”
  • German study by VDE: “Industrie 4.0 lässt vorerst auf sich warten”
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