CIO Talk Manufacturing & FMCG

Industry 4.0 and Smart Factory: Digital Transformation for Manufacturing

Industry 4.0 is a name for the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems/advance robotics, the Internet of things, cloud computing, 3D printing and cognitive computing. Industry 4.0 creates what has been called a “Smart factory”.

As we all know, the first industrial revolution was the Victorian one that kicked it all off by moving from farming to factory production in the 19th Century. The second one ran from around the 1850s to World War I and began with the introduction of steel, culminating in the early electrification of factories and the first spouts of mass production. Third industrial revolution is known for shifting from analogue, mechanical, and electronic technology to digital technology that took place from the late 1950s to the late 1970s.

The fourth industrial revolution is marked by digitization that is based on three major pillars. One is the Internet of Things and internet based business application linked to physical machine systems that has sensors, having the ability to collect data that can be used by manufacturers and producers. This data captured through various sources is used for performing next task or consumed for further analytics. This captured data is further distributed over the communications infrastructure and protocols that helps the industry feed to analytical or assembly working in highly hazardous environmental.

This kind of digital revolution will see implementations of future technologies, will have an impact and make sure that businesses are buzzing away at optimum efficiency, thirst for higher productivity and cost reductions and good decision making due to availability real-time data and reduce the dependency on human also reduce the health hazards.

The above is possible only with superior connectivity, optimized process definition, transparency of activities and conditional clarity, proactive actions to ensure pre-requisites are in place, agility of actions and the systems having ability to analyze from available huge sets of data and produce insights that can be acted upon quickly.

Smart factories, which will be at the heart of Industry 4.0, will take on board information and communication technology for an evolution in the supply chain and production line that brings a much higher level of both automation and digitization. It means machines using self-optimization, self-configuration and even artificial intelligence to complete complex tasks in order to deliver vastly superior cost efficiencies and better quality goods or services.

Although there is no single smart factory configuration, there is likely no single path to successfully achieving a smart factory solution. Every smart factory could look different due to variations in line layouts, products, automation equipment, and other factors.

However the some of the important components of smart factories that needs to be analyzed while implementations are data, technology, process, people, and security.

  • Data: Is the most eternal part of Smart factory, as data drives the processes, algorithms, operational errors are identified feedbacks are given, also helps in predicting operational efficiencies and fluctuation in MRP.
  • Technologies: Smart factory all the factory plants, pumps, handling equipment’s are connected with sensor based central control system. This control units control all the possibly integrated control systems that manage the parameters to ensure maximum efficiencies and better control.
  • Processes: Implementation of smart factory helps in setting up the optimized, adaptable and running production process independently with self-optimized and best case solution.

Additionally, the connectivity of the smart factory may extend beyond its four walls to include increased integration with suppliers, customers, and other factories

  • People: The change management plays important role in adoption of smart factory solution. Some roles may no longer be necessary as they may be replaced by robotics (physical and logical), process automation, and AI. But there is always need of some roles to mange IT/OT organizations, resulting in a realignment of roles to support new processes and capabilities
  • Security: As Smart factories implementation is harnessing on the connectivity and communication infrastructure. This increases the need to beef-up implement of cyber security.

In the time to come we will see huge change in the way business compete. This will be driven by convergence of the digital and physical worlds riding on the information technology (IT) and operations technology that will bring transformation of the supply chain. Major changes from the sequential supply chain operations to an interconnected, open system of supply operations. This will bring advancement in digital supply network unlocking manufacturers several capabilities, We will see lot of horizontal integration through the various operational systems that power the organization, vertical integration through connected manufacturing systems; and end-to-end, holistic integration through the entire value chain.


Today’s world there is no chance that manufacturing can ignore the need of optimized Supply Chain for the organization.  Hence we all know the importance of SCM in manufacturing.  Thus Smart Factory discussion can’t be completed until Smart Logistics and Smart supply chain is discussed, something I will discuss in the next article.

By: Rajeev Pradhan, Vice President – IT, Arshiya Limited


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