Smart manufacturing is all about an intelligent, connected supply chain

As it stands, factories are dumb — or at least far less intelligent than current technology could actually make them. The current industrial production is inflexible and too expensive and a root cause is supply chain invisibility.

But that’s about to change thanks to Industry 4.0 — an initiative with its roots in Germany that aims to bring about the fourth industrial revolution. It heralds the era where manufacturing becomes intelligent and every link in the supply chain talks to each other and is connected.

The smart factory concept means industrial or manufacturing processes will be organized in a smart way compared to tired, traditional methods. In opens the era of intelligent manufacturing where the entire production chain, including suppliers, logistics and product life cycle management are connected across frontiers.

In the factory of the future, all individual steps in the production process will be fully connected and integrated. This will have an impact on all planning, production and logistics processes in and around the factory.

Smart manufacturing is not about change for simply change sake. It is driven by market needs for production cost reduction, faster time-to-market, mass production of individually configured products, and last minute changes to any order. And that requires adding sensors to everything and connecting all in the manufacturing and supply chain. The Internet of Things (IoT) is the driver that will do exactly that.

Take the car industry as an example of smart manufacturing. Before any new car is built, it is assigned a sensor tag at the beginning of the production process. The tag can be associated to a specific customer. Then the “car” tells the robots how to build it along the production line. So, if a customer wants to change the specification for a SatNav as it goes down the production line, he or she can but it will impact on stock, on SatNav sub-suppliers … in fact on the whole smart supply chain.

Transparency in the supply chain will be central to every smart factory in every corner of the world so that all know what goods are in transit and when they will be received.

But the smart logistics chain extends far beyond positional information of goods. It extends to conditional monitoring of data concerning every item en route to a smart factory. A smart factory needs to know if any SatNav has been damaged when a truck went over a speed calmer. It needs to know if any have been exposed to excessive high temperatures and humidity in a trailer and much, much more.

The smart factory needs to know before goods are expected into a production line and to take alternative supply decisions to replace suspected goods. Supply chain visibility is a cornerstone in Industry 4.0 and it calls for cooperation in the whole supply chain.


With Industry 4.0, the supply chain gets integrated into production and when combined with business intelligence will be the basis of the Connected Enterprise. The smart factory will see islands of information from diverse platforms and systems being securely and transparently connected into one data cloud.

Only then we will see factories becoming smart, not dumb.

Feature image: cortto via Flickr



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