The single biggest challenge currently in the Smart Manufacturing segment is navigating significant hype as suppliers in multiple vertical markets pursue this evolving market space and growth opportunity. Projected CAGR in this space nearing 10 percent and total market size greater than USD 100 Billion within 5 years (estimates vary widely), attract the attention of even the largest global players. Against this backdrop, Smart Manufacturing is often presented in visionary and future-potential terms while lacking in actionable information, especially with respect to established manufacturing processes and enterprises looking to deploy Smart Manufacturing as part of an existing business strategy.
"Smart Manufacturing is not about deploying technology, it is about driving business value through ‘Smart’ technologies"
OEMs, Integrators, and Consultants who can help balance the pragmatic with the visionary, and technological possibilities with business goals and constraints, are needed by the end-user community.
Due to the diverse nature of Smart Manufacturing and its industry sector specific impact, it is difficult to define with a simple, concise, and universally applicable statement. Definitions have been offered by various commercial, academic, governmental, and professional bodies, none of which are incorrect nor definitive, but are appropriate for their respective context and scope.
Similarly, a definition is offered for the purposes of this article and my work involving automation strategy development and technology planning: “Smart Manufacturing is the impact on manufacturing of the convergence of advancements in multiple technologies and global economic and social mega-trends.” While this definition is quite broad, it reflects the idea that Smart Manufacturing is about more than technology. Ultimately, Smart Manufacturing is not about deploying technology, it is about driving business value through ‘Smart’ technologies.
Technology advancements include ever-increasing capability, falling cost, and ubiquity in sensor technology, data storage, connectivity/networking, autonomous systems, scalable computing, etc. Global economic and social mega-trends include workforce mobility (i.e. turnover), adoption and presence of ‘smart’ technologies in everyday life, and continued globalization and the accompanying scale of global enterprises. Much more can be said about these ideas, but this is a topic for future articles.
There are myriad technological and operational opportunities, as well as incalculable financial potential on the frontier of Smart Manufacturing—the options and possibilities are truly endless and consequently can be both daunting and confusing. Successfully pursuing the promises of Smart Manufacturing requires development of a strategy which connects solutions and opportunities with business cases (i.e. the cost and benefit of the opportunity). This is normal business administration, the details of which are unique to each enterprise and Smart Manufacturing does not change it.
Technologists and business leaders alike are excited by, and sometimes enamored with new technologies and the possibilities they offer. However, unless aproposed new technology deployment has a clear link to business outcomes, implementation will likely not have a material impact on business performance in the short or long-term. A business case can be strategic or tactical, measured by financial or non-financial KPIs, but articulation and measurement of the outcome is critical for success.
For most business leaders, a strategy and implementation roadmap that delivers value in the short-term while also positioning the enterprise for long-term leverage of the visionary aspects of Smart Manufacturing, will be very attractive. Fortunately, the technologies of Smart Manufacturing provide opportunities to do this. For example, a data integration strategy can provide short-term improvements in the availability and quality of information on the shop-floor, through to a long-term integrated big-data eco-system with sophisticated analytics to enable faster and higher quality decision making and problem solving across all levels of the enterprise.
In addition to Smart Manufacturing hype is the difficulty of selecting products, technologies, and solutions in an environment of continuous change. An environment of new technologies and product offerings, new startups, consolidation amongst established companies, new buzzwords and acronyms, etc., understandably creates confusion. However, some fundamental elements of the evolution of Smart Manufacturing are clear.
The mega trend of low cost and ubiquitous connectivity is clear, real now, and will continue to grow with increased numbers of connected devices, systems, and individuals at costs approaching zero in terms of per-connection cost. The Internet of Things (IoT) describes this dynamic and will clearly be a factor in the future off Smart Manufacturing (as well as all our personal lives). Estimates in the tens of billions of connected objects in the next few years reflect this dynamic.
Similarly, the advent and mega trend of cloud services for storage and computing, software services (SaaS), application hosting (PaaS) and IT infrastructure (Iaas) is evolving and will continue to impact the manufacturing sector. These developments continue to drive down the cost of very sophisticated and scalable information and computing systems enabling lower cost and more sophisticated Smart Manufacturing solutions in manufacturing.
We are still in the early days of understanding the true potential of cloud technology and its impact on the manufacturing segment. For example, only a few years ago, adding a server and a few hundred gigabytes of data storage would have required an IT project involving cost estimates, procurement departments, proposals, etc. Whereas now, in an organization that is utilizing cloud storage, there is virtually “zero friction” in scaling storage systems and this expansion can be achieved in a few minutes. The advent of cloud services has also opened new opportunities for smaller enterprises to have virtually the same sophistication in terms of IT infrastructure as that of a very large firm as the security and service level of cloud systems is likely better than most in-house IT organizations can achieve.
This does not mean everybody should automatically create a project in her enterprise to “eliminate in-house data centers”. The overarching theme of integration with the business strategy applies here as elsewhere. However, if a business is not at least evaluating such a move they are a missing a potential opportunity.
A barrier to even more rapid adoption of these and other technologies is broadly established industry standards. Especially in the example of IoT, the lack of well-established standards makes implementation problematic and increases risk. This is changing, but will likely be a persistent challenge for the foreseeable future since most manufacturing enterprises want to deploy proven technologies while they focus on their own unique value proposition and core competencies.
Every year we hear announcements about new innovations that envisage bringing revolutionary transformations to the segment. Presently, there is significant focus on data, data engineering, analytics, big-data, and generally organizing and leveraging the exponentially increasing volumes of data to create actionable information and insight. Another rapidly evolving frontier is in augmented reality (AR) in manufacturing utilizing Google Glass or similar technologies. While AR is quite mature in gaming and other areas such as simulation, the application of this technology in plant-floor manufacturing is still in its early stage. However, a symbiotic relationship between human and digital systems can and will significantly impact the way manufacturing enterprises operate.
Finally, a challenge for any business is evaluating when to upgrade or replace an existing system that is still supported and functional. Many of the systems involved in Smart Manufacturing represent significant investment in terms of capital, operational practices and processes, and personnel training. Furthermore, they are stable and proven whereas new systems bring with them risk, the trauma of change, and a maturation curve. This must also be factored into the business case evaluation. Smart Manufacturing technologies and possibilities are exciting and intriguing, but only meaningful when integrated with the business strategy and connected to business performance.