The Connected Factory Business Model

A connected factory uses cloud-based services, like storage and analytics, to assess historical trends as well as real-time data collected from manufacturing devices. This type of factory offers a handful of benefits when it comes to streamlining and simplifying business functions, as well as identifying areas for improvement or innovation.

These systems can also enable or assist in remote management and monitoring. This can improve accessibility, as well as transparency of practices across the factory floor. It’s because of these benefits, and many others, that more companies are considering employing the connected factory model for their business.

The Role of Data Throughout the Supply Chain

Data exists in virtually every facet of business. It tells the story of how your business interacts with the world around it. Supply chains can generate huge amounts of data, from sourcing to manufacturing to order fulfillment, and even forecasting and performance. This is where implementing data optimization and factory connectivity strategies can play such an important role in helping business owners make crucial decisions.

The supply chain helps dictate some of the most important decisions made for and by businesses, because it helps determine what the existing need is, as well as the resources that any one business can use to fulfill that need. Therefore, employing an integrated system can make your whole supply chain much more responsive, which can help improve the accuracy and timeliness of the data you’re working with, as well as streamline the supply chain process by opening communication channels between all parts of it.

Smart Manufacturing

Smart manufacturing is a broad category that encompasses the utilization of computer integration and cloud services as part of your manufacturing process. The connected factory (also sometimes called “connected manufacturing”) business model is classified as smart manufacturing. As robotic process automation becomes more commonplace, and manufacturing technology becomes more sophisticated and lucrative for business owners, smart manufacturing practices have become more and more popular.

Service-specific view
Service-specific view

The Internet of Things

The internet of things, or IoT, has become important in the smart manufacturing space. IoT describes the process by which tangible things, such as cars, fridges, and smart home devices connect to the internet and exchange data between other devices.

The IoT is exemplified by smart household objects like those previously listed, as well as industrial tools. From a manufacturing perspective, connectivity through the IoT allows for quicker and more accessible data transfer between objects, or even between warehouses. This can streamline data collection, helping eliminate errors caused by miscommunications and improving machine learning efforts.

Benefits of a Connected Factory Model

There are several advantages to the connected factory model for both manufacturers and consumers, including:

Increased Productivity

Increased Productivity

Because automated systems can function continuously, you may see an increase in productivity during usually low production times. This can help you fulfill consumer needs in a more timely manner.

Increased Flexibility

Increased Flexibility

Cloud-based systems are accessible from any internet-capable device, allowing you to manage your systems any time, any place. You can also reprogram systems for new purposes or goals faster and easier than retraining employees.

Production Traceability

Production Traceability

By having an integrated system, you’re able to track production from beginning to end. This can help manufacturers identify problems, perform quality control, and reassure consumers.

More Responsive

More Responsive

Smart systems offer real-time data, accessible at any time. This increase in responsiveness allows you to make more precise decisions and gives you a comprehensive view of important data.

Increased Worker Safety

Increased Worker Safety

By automating certain unsafe manufacturing processes, you can remove workers from potentially dangerous situations and decrease the likelihood of at-work injuries.

Lowered Costs

Lowered Costs

You’re likely to see lowered costs associated with training and labor when you migrate to a connected factory business model, as you’re able to automate more services and easily reprogram systems.

How to Implement the Connected Factory Model

There is no one way to implement a connected factory model. How your business will achieve this will depend on strategies you already have in place, and the time period by which you want to be fully transitioned and using the new system. You don’t have to stop business in order to start automating systems, but you may choose to if you’re interested in making large-scale changes quickly. To start the migration process to a connected factory model, you can:

  • Update legacy systems.

  • Invest in cloud migration.

  • Employ analytic tools.

  • Improve network infrastructure.

  • Invest in digital transformation efforts.

For each change, you’ll want to make sure you account for any necessary installation, training, or updating time to your manufacturing workflow. By planning out these updates, you can make sure that they cause as few disruptions as possible.

Examples of Connected Factories

There are several manufacturers that use IoT services and connected manufacturing models to their advantage. Caterpillar is one such company.

By utilizing industrial IoT analytic tools, Caterpillar offers data monitoring services to its consumers. With these analytics, consumers can better understand the current state of their equipment, track fuel efficiency, and monitor active fleets. This enables Caterpillar consumers to make data-driven, proactive decisions about how best to optimize their practices. This, in turn, builds trust in the Caterpillar brand, helping the company not only maintain but also build its client base.

Connected Factories

The Future Outlook of the Connected Factory

Smart manufacturing doesn’t show any signs of slowing down in popularity. In fact, the McKinsey Global Institute projects that smart manufacturing will generate between $3.9 trillion to $11.1 trillion a year by 2025 — further proof that smart manufacturing is a growing and lucrative industry. As technology continues to evolve, smart manufacturing and the connected factory business model will evolve right along with it. Many internet-based services and tools are designed to accommodate this type of growth, due to the speed at which change is liable to happen. Incorporating connected factory practices into your business can give you more confidence and control over your key manufacturing functions as we move into the future.

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