Smart Factory a Revolutionary Concept for the Manufacturing World

The term smart factory refers to manufacturing facilities that are equipped with technologically advanced production lines. Smart factories are fully automated and offer more efficient production operations. Most factory owners are remodeling their existing production lines in an attempt to align themselves with the current scenario. It is only a matter of time before traditional factories become obsolete as they are incapable of keeping up with the modern manufacturing requirements.  Smart factories have brought the physical and the digital world closer than ever before and has introduced completely new process of manufacturing.

A new data released by Future Market Insights (FMI) reveals that the global market for smart factory stood at a valuation of US$ 51.9 Bn in 2014. This market is further anticipated to expand at compound annual growth rate of 13.3% between 2015 and 2025. Growing emphases on leading-edge manufacturing technology, robust demand from major sectors as well as inclination towards consumer centric products offerings by most manufacturers are few of the underlining factors boost the popularity of smart factory.  Over the next couple of years the market for smart factory will be governed by trends such as rampant use of information technology, adoption of collaborative robots, higher investments in manufacturing plants and use of industrial internet of things (IIoT). Moreover cyber physical systems are likely to play an important role as well.

Smart Factory Market

Smart factories have four major working structures, which include to collect, to control, to analyse and to connect. Amongst these, “to analyse” and “to control” are two major working structures, having significant importance in manufacturing operations. Currently, application of working structure ‘to control’ production line is gaining extensive popularity

Types of Manufacturing Vertical

Based on manufacturing vertical, smart factory is witnessing healthy adoption in food & beverage, automotive & transportation, aerospace & defence, electrical & electronics, garment & textile, oil & gas, healthcare & pharmaceutical, and chemical & material. Over the years, production methods in the automotive & transportation sector to an extent has been shifted to smart factory standard. By switching to smart factory, the automotive sector has benefited majorly, as vehicle production time has been greatly reduced, however, adding higher precision and quality. Car manufactures are ramping up investments in order to add latest technologies in their smart factory facilities and keep them up-to-date. For instance, German luxury car manufacturer Mercedes-Benz, in September 2015, announced and investment of US$ 1.3 Bn to enhance and improve its SUV manufacturing facility in Alabama, U.S.. Back then, the investment was estimated to create 300 new jobs in the U.S. and also support end-to-end automation of the manufacturing process that marked the company’s smart factory initiative.

Of all the regions, the smart factory market in Asia Pacific has been representing lucrative growth opportunities for players. In 2014, the region’s market accounted for more than 39% value share of the global smart factory market. This is primarily attributed to growing investments in setting up advanced manufacturing facilities in the region. For example, in April 2015, the South Korean government collaborated with Samsung Electronics in order to encourage the smart factory concept in the nation, which involved an investment of US$ 12.6 Mn. In addition, the MEA region is also expected witness a rapid adoption of smart factories in the near future owing to the growth of the industrial sector. Some of leading companies that provide smart factory solution include Atos SE, Rockwell Automation, Inc., Siemens AG, IBM Corporation, Accenture PLC, ABB Group, General Electric Co., Oracle Corporation, SAP SE and PTC Inc. These players are concentrating on mergers and acquisitions strategies, partnerships and new product developments to improve their overall market presence.

Abhishek Budholiya

Abhishek Budholiya is a tech blogger, digital marketing pro, and has contributed to numerous tech magazines. Currently, as a technology and digital branding consultant, he offers his analysis on the tech market research landscape. His forte is analysing the commercial viability of a new breakthrough, a trait you can see in his writing. When he is not ruminating about the tech world, he can be found playing table tennis or hanging out with his friends.