Capgemini has announced the findings of its Smart Factories report. According to the research from Capgemini’s Digital Transformation Institute, manufacturers expect that their investments in smart factories will drive a 27% increase in manufacturing efficiency over the next five years which would add $500 billion in annual added value to the global economy.
Often described as a building block of the ‘Digital Industrial Revolution’, a smart factory makes use of digital technologies including the Internet-of-Things, Big Data Analytics, Artificial Intelligence and Advanced Robotics to increase productivity, quality and flexibility. Smart factory features include collaborative robots, workers using augmented reality components and machines that send alerts when they need maintenance. By the end of 2022, manufacturers expect that 21% of their plants will be smart factories. Sectors, such as aerospace and defense, industrial manufacturing and automotive, where people are working alongside intelligent machines, are expected to be the leaders of this transition.
As a result of productivity, efficiency and flexibility improvements, smart factories will benefit from significant reductions in operating costs. For example, the report estimates that the average automotive manufacturer could drive up to a 36% improvement in operating margin through improved logistics and material costs, equipment effectiveness and improved production quality. As such, the majority of industrial companies have already embarked upon their digitalization of plants to stay competitive; only 16% of those surveyed say they don’t have a smart factory initiative in place, or upcoming plans to implement one.
Early-adopters, including factories in the US and Western Europe are leading the pack; half of respondents in the US, France, Germany and the UK have already implemented smart factories as opposed to 28% in India and 25% in China. A divide is seen across sectors as well; 67% of industrial manufacturing and 62% of aerospace and defense organizations have smart factory initiatives. Yet a little more than a third (37%) of life science and pharma companies are leveraging digital tech, opening their business up for industry disruption.
The research, which was conducted from February to March 2017, interviewed 1,000 executives holding director or above rank in manufacturing companies with a reported revenue of more than $1 billion each. The research was conducted across six sectors; industrial manufacturing, automotive &transportation, energy & utilities, aerospace & defense, life science & pharmaceuticals and consumer goods. Directors from the US, UK, France, Germany, Sweden, Italy, India and China were interviewed in both qualitative and quantitative interviews.
