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Study Shows Smart Factory Initiatives Paying Off for Early Adopters

Deloitte/MAPI Smart Factory Study Infographic 1

 

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Whether you work in industry or a career and technical education (CTE) program, there’s a set of buzzwords you’ve probably heard frequently over the last couple of years. They include Industry 4.0, Fourth Industrial Revolution, Industrial Internet of Things (IIoT), and Smart Factory, to name just a few examples.

Is the Fourth Industrial Revolution really underway? Are wide-scale technological changes inevitable throughout industry? Or are Smart Factories merely a dream for the distant future? Industry and educational leaders now have data to guide them.

The 2019 Deloitte and MAPI Smart Factory Study

In April 2019, Deloitte and the Manufacturer’s Alliance for Productivity and Innovation (MAPI) conducted “a joint study to determine the value of smart factory initiatives to make the business case for investment.” The goal was to determine whether smart factory initiatives could potentially spark productivity in industry or the economy as a whole.

 

The 2019 Deloitte and MAPI Smart Factory Study (the “Study”) gathers and analyzes data from hundreds of manufacturers. The results of the Study are clear: “the promise of the Fourth Industrial Revolution can be delivered through smart factory initiatives, and smart factories are beginning to pay off for early adopters.”

Deloitte/MAPI Smart Factory Study Infographic | Productivity RutA Productivity Rut

Alongside Industry 4.0 and Smart Factory, skills gap and talent shortage are other common buzzwords signaling the type of issues plaguing industry today. There’s another phrase, though, that sums up a serious problem that hasn’t gotten as much attention: productivity rut.

According to the Study, U.S. manufacturing is in a productivity rut. Currently, “manufacturing productivity appears to be stuck…posting annual growth of around 0.7 percent between 2007 and 2018.”

Of course, that’s still growth. Slow and steady wins the race, right? Well, it’s a far cry from “the 3.6 percent average annual growth rate seen between 1987 and 2006.” Today, “economic output is moving in lockstep with the number of hours people work, rather than rising as it did for much of the last seven decades.”

 

Deloitte/MAPI Smart Factory Study Infographic | The Future Is HereIndustry 4.0 to the Rescue?

Could Industry 4.0 ignite stalled labor productivity? As the Study notes, “one of the promises of the Fourth Industrial Revolution” is “to accelerate operational improvements by connecting machines, people, data, and value chains.”

The connection of these various elements creates a smart factory, which the Study describes as “a flexible system that can self-optimize performance across a broader network of factories, suppliers, and partners; self-adapt to and learn from new conditions in near-to-real time; and autonomously run the production processes.” Are smart factories the stuff of science fiction or a coming reality?

Manufacturers believe smart factories are the future, and the future is here. According to the Study, more than 80% of manufacturers believe smart factory initiatives are important, because they “will be the main driver of manufacturing competitiveness” and “will transform the way products are made” in the next five years.

 

Deloitte/MAPI Smart Factory Study Infographic | The Time Is NowTakeaways for Industry and Educators

What can those in industry and education learn from the data gathered and analyzed by Deloitte and MAPI? The Study includes several major findings:

  • “Every manufacturer—whether already ‘running smart’ or yet to invest in smart factory technologies—can harvest business value from smart factory initiatives.”
  • “Smart factory initiatives typically accelerate business value creation. Companies report on average 10-12 percent gains in areas such as manufacturing output, factory utilization, and labor productivity after they invested in smart factory initiatives.”
  • “There is a direct and established connection…between smart factory initiatives and the business value realized. What’s more, any manufacturer can use this connection.”
  • “While there are risks…they are generally outweighed by the smart factory’s value contribution. Also, most risks can be mitigated…”

The Study notes that “[o]ne of the biggest challenges of smart factory adoption is that many organizations simply do not take any action on smart factory investment and initiatives.” Given the business value smart factory initiatives are creating, the takeaway for those in industry and education is clear: it’s time to start pursuing smart factory initiatives.

Deloitte/MAPI Smart Factory Study Infographic | Economic GrowthSmart Factory Initiatives Paying Off for Early Adopters

Those in industry who have not yet started down the road of smart factory initiatives might be dragging their feet due to the complexity of the advanced technologies involved and the perceived risks of large-scale changes.

However, the Study reminds readers that “[s]mart factory transformation is not a ‘Big Bang,’ but rather a concerted effort over a number of years to identify, invest in, implement, and refine specific use cases…for applying advanced technology to existing processes and workstreams.”

It’s perfectly fine to start small and slow. All manufacturers can benefit from smart factory initiatives, and it’s clear that early adopters (called “Trailblazers” in the Study) are realizing greater benefits.

For example, the Study finds that “[s]mart factory initiatives triggered double-digit growth in key performance indicators between 2015 and 2018.” Average increases in production output (10%), factory capacity utilization (11%), and labor productivity (12%) have been impressive. Moreover, the study notes that the benefits observed by early adopters were double or more that of those lagging behind in smart factory initiatives.

Deloitte/MAPI Smart Factory Study Infographic | Training Starts NowAll Aboard

Before setting smart factory initiatives into motion, it’s important to form a team to study potential smart factory initiatives in order to choose those that will have the greatest impact. It’s also important to get everyone on board.

The Study notes that, “[g]iven the transformative potential of the smart factory for every department/area of the factory, it is important that all factory departments are adequately represented on the team.”

Smart factory initiatives will do more than simply introduce new forms of technology. They will fundamentally change the way people work and products are made. As a result, industries will need to upskill current workers and educators will need to teach their students the skills they will need to succeed in Industry 4.0 jobs.

 

 

How Amatrol Can Help

The promise of Industry 4.0 is exciting, but it can also seem like a daunting challenge from a training standpoint. How can industries upskill current workers to be able to operate, maintain, troubleshoot, and repair smart factory systems? How will educators fill the talent pipeline with future workers equipped with Industry 4.0 skills?

With more than 30 years of experience, Amatrol remains the world’s leader in skills-based interactive technical learning that uniquely combines hands-on industrial training equipment with comprehensive, highly-interactive multimedia curriculum. Amatrol has leveraged that experience to lead the way in developing advanced Industry 4.0 training programs for both industry and education.

Deloitte/MAPI Smart Factory Study Infographic | Amatrol Smart Factory Training Systems

For example, Amatrol’s Smart Factory training system is an eight-station, fully-connected manufacturing system that connects physical systems, operational information, and human assets to control a variety of actions, including manufacturing, maintenance, inventory, and supply chain operators. Click below to see Amatrol’s Smart Factory in action:

 

The Smart Factory training system utilizes an industrial FANUC robot, software for smart factory communications, Allen-Bradley or Siemens PLCs, a variety of smart sensors, and an additional cart for Ethernet, Wireless Communication, and Network Security training components.

For those who want smart factory training on a smaller scale, Amatrol offers a Tabletop Smart Factory Mechatronics system. This five station system includes a variety of smart sensors for product identification (RFID, barcode, photoelectric, pressure, etc.), components for network communications, and software for smart factory manufacturing execution and visual communications. Click below to learn more about Amatrol’s Tabletop Smart Factory Mechatronics system:

 

Amatrol’s Industry 4.0 Fundamentals (I4F) program also provides a two-year path to industrial competencies in areas like PLC troubleshooting, mechatronics, and data analytics, as well as learning to program and operate a FANUC robot. The I4F program will also prepare students to obtain industry-recognized Industry 4.0 certifications from the Smart Automation Certification Alliance (SACA).

 

About Duane Bolin

Duane Bolin is a former curriculum developer and education specialist. He is currently a Marketing Content Developer for Amatrol, Inc. Learn more about Amatrol and its technical training solutions, including eLearning, here and connect with Duane on Amatrol’s Twitter, Facebook, LinkedIn, and YouTube pages.

 

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