3 Impacts of Smart Factory on the Manufacturing sector

You don’t have to look too closely to see that technology is having a profound impact on how factories operate today. The application of technology is making the process of manufacturing ever-increasingly intelligent and dynamic – allowing the concept of a Smart Factory to become a reality.

What is a Smart Factory?

The term describes a highly digitalized and connected environment where machinery and equipment are able to improve processes through automation and self-optimization. The benefits also extend beyond just the physical production of goods and into functions like planning, supply chain logistics, and even product development.

Yet, the core value of the smart factory still happens within the four walls of the plant. The structure of a smart factory can include a combination of production, information, and communication technologies, with the potential for integration across the entire manufacturing supply chain.

All these separate parts of production can be connected via the IoT (Internet of Things) or other types of advanced integrated circuits (IC’s), which enable sensing, measurement, control, and communication of everything that’s happening throughout the manufacturing process.

Sensor Technology Enables IoT

Central to the smart factory is the technology that makes data collection possible. These include the intelligent sensors, motors, and robotics present on production and assembly lines that the smart factory puts to use.

Sensors make it possible to monitor specific processes throughout the factory which increases awareness about what’s happening on multiple levels. For example, vibration sensing can provide a warning when motors, bearings, or other equipment need to be maintained. These types of subtle warnings become alerts for preventative maintenance or other actions that head off larger production problems if left unattended.

Similarly, For example, when a sensor is damaged on the packaging line, a maintenance person receives a warning on a mobile device that there is a sensor failure and the exact location of the issue. Application-specific naming information guides him directly to the fault, with the DOMMS application providing device vendor data and part number for fast replacement.

Connecting the Shop Floor to the Top Floor

Photo credit: Popular Mechanic

Communication and the ability to use manufacturing data is what puts the ‘smart’ in ‘smart factory’. New technologies are emerging as Industry 4.0—or the next industrial revolution—are converging to enable the smart factory.

Ultimately, it’s the application of intelligence at the factory level that creates a dynamic production environment and the desired results—reducing costs while improving quality and reliability. Consider how smart equipment makes it possible to automate much of what’s required to accommodate product variation and smaller-sized production runs during the manufacturing process. The future of manufacturing is more customization, so by minimizing downtime for retooling and resetting equipment, manufacturers can operate efficiently while staying flexible.

The data generated from the shop floor can be interpreted on a real-time basis. The management can take decisions based on analytics and insights from the data generated.

The Impact on Jobs

As the smart factory slowly emerges, the roles that people take on will evolve from what they are currently doing in today’s factories. People will take on more complex roles while automation will conquer the tasks that are repeatable, mundane, dangerous, or currently impacted by a labor shortage. In fact, the labor shortage is one of the most common challenges manufacturers are continually facing, with 56% of companies saying it is difficult to hire new employees.

While it’s true that automation is viewed as a threat to existing manufacturing jobs, there is also a new trend that is emerging called “the digital talent gap” — there is a raising need for digital skillsets as more companies choose to implement digital technologies. According to MHI’s Annual Industry Report, companies are severely hampered in their ability to implement digital technologies due to the shortage of workers with the necessary skills to run them. This means that companies will need to start investing in talent development as the adoption of Industry 4.0 technology will require a greater need for skilled workers.

How Moderna aced the Smart Manufacturing Technology : Case Study

Moderna, the American biotechnology company and maker of the well-known Moderna vaccine, is the poster child of how a digital-first vision applied to a smart factory can be a business game-changer in 2021 and beyond.

Photo Credit: Moderna

In 2020, Moderna’s smart factory was put to the test by the COVID-19 pandemic. In July 2020, the company became one of the first US companies to enter phase III of a clinical trial for a potential coronavirus vaccine, just months after the genetic code of the virus was released.

The smart factory became a cornerstone for Moderna to accelerate the vaccine development process in several ways, including using AI-based algorithms for massive sequence optimization and using digital twin technology to rapidly simulate and test the related production processes. This vaccine development process, which usually takes an average of 10 years, was reduced to months, in part thanks to Moderna’s previous investments in smart factory technologies.


The investment of building a smart factory benefits manufacturers by creating a safer, efficient, and more reliable operation. Companies will need to adopt digital technologies in order to meet consumers’ rising expectations of faster delivery times, free shipping, options to customize products, more transparency, and lower costs. When GE Healthcare began its transition to a smart factory, it saw a 66% increase in productive floor space.

The demands on the manufacturing industry will continue due to the trend for more on-demand production and the ever-present drive to reduce costs. The smart factory is a direct way for manufacturers to excel in a competitive and dynamic marketplace as they’ll use digital innovation to improve supply chain efficiencies.






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