Dec 17 2015

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How Smart is Your Factory?

how_smart_is_your_factoryMuch has been discussed about Smart Manufacturing, or the use of the Industrial Internet of Things in manufacturing environments. But it seems everyone has a different opinion of what that actually means. In this post, I want to make an attempt at defining what a Smart Factory is.

As I see it, there are five components to a Smart Factory, and all five must be met to some degree before a production operation can be considered truly smart. If you want to rate how smart your factory is, give yourself a score of 0 to 5 for each of these categories.

Smart Equipment

Smart is defined as the ability to monitor conditions and operations, and respond to events by taking appropriate action. This means smart equipment can do some sort of self-triggered response to production events. Examples would be to shut down if it senses internal temperatures are too hot; request a diagnostic evaluation if quality performance degrades below a pre-specified level; alert personnel if certain specs are trending toward limits.

Thinking more broadly, smart equipment is also a prerequisite for collecting and reporting detailed data about every production step, from incoming inspection to manufacturing/assembly to shipping. This data can then be used for drilling down (such as tracing a specific product through its lifecycle) or stepping back for a meta-view (big data analytics and continuous improvement).


  • 0 points if you still use basic NC machines
  • 5 points if all equipment has built-in intelligence, sensors, real-time communications, integration with other systems (enterprise MES, CoE, ERP)


Smart Processes

This would be at “Level 3” of the ISA 95 model, whereby processes that manage manufacturing operations have the capability to perform actions that are triggered by others. Smart processes generally require smart equipment to provide the data for decision-making.

Most manufacturers have likely already achieved some level of smart processes, such as Lean triggers to automatically replenish supplies that are running low, or to synchronize with other smart equipment in the production flow upstream and downstream.

Smart Pull is an example of where this type of intelligence could be leveraged. In a Pull production model, the demand of the production line triggers upstream activities such as ordering parts and supplies and warehouse pulls. Smart Pull builds this capability into the processes, so Lean happens automatically without human intervention.


  • 0 points if your processes are still on paper
  • 5 points if you have smart processes integrated across your full production chain
  • Add 1 bonus point if you have closed-loop digital integration between product design and manufacturing processes, demonstrating a best-in-class innovation cycle


Smart Operators

Of course, humans are a very important part of the production equation. The issue here isn’t how high their IQ is or what education they have, but rather how empowered are your employees to perform a corrective or preventive action, or address an issue they see, in real-time? What systems or procedures are in place to leverage the intelligent operators working on the “front line” such that significant quality, tracking or performance issues can be immediately addressed? Can they take action through the system? How easily can they do it? And, what governance process is in place such that suggestions don’t get lost in a corporate approval process “dead end”?

We can also think of smart operators as informed operators. In a smart factory, that means making all the production information captured by smart equipment and processes readily available to every operator when they need it and in the right context. For example, a blinking red light that indicates a production line halt is not very smart. A graphical interface that shows the cause, highlights the specific problem, provides diagrams of the equipment, and shows exactly what steps to take for correction or who to contact—that is a smart solution, one that can help make the operator “smarter” in his or her job.


  • 0 points if operators cannot make decisions or resolve problems without help
  • 5 points if 90% of manufacturing issues that arise can be resolved immediately by the personnel at hand or by first call


Smart Suppliers

In global enterprises, the supply chain can be more critical than your own production systems, precisely because they often operate outside of your visibility and control. A Smart Supplier is one who provides you with visibility into their operations, and more importantly, gives you the ability to take prompt and appropriate action in response to real-time events.

Can orders be automatically rerouted if a supplier suddenly can’t deliver, or there’s a sudden spike in orders in one region? Can you shift suppliers between plants dynamically as required? Can you do it without human intervention?


  • 0 points if you don’t know what your suppliers are doing until a month later
  • 5 points if your supply chain is integrated with your enterprise Manufacturing Execution System for both visibility and actionable steps
  • Add 1 bonus point if you have a high degree of automated interaction between your operations and your suppliers


Smart Distribution

Here, you want to ask yourself how well your scheduling and transportation systems can respond to change. What updates can be performed automatically if something changes as orders become ready for shipment? How well is this information communicated without human intervention?

For example, an increase in production could trigger downstream notices to warehouses and shippers that extra goods will be entering the distribution system in the next five days. The loop could be closed, too, such that the distribution system could signal that it has responded—or that it is unable to handle the load, which could then trigger alternative efforts to fulfill distribution needs.


  • 0 points if you have to call your distributors to make changes
  • 5 points if you never have to call your distributors to make changes


How did you score?

Counting the 2 bonus points available, the highest possible score is 27. I doubt if anyone can claim that level of automation. However, I can honestly say there are Dassault Systèmes manufacturing customers who score in the 20s. My guess is most enterprises would score at least 10, and many may be in the teens.

I’d like to hear what you think of the definition, and how you scored. Let me know in the comments below.


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Permanent link to this article: http://www.apriso.com/blog/2015/12/how-smart-is-your-factory/

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