What Are the Benefits of a Smart Factory?

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Gone are the days when manufacturers were dependent on manual operations to gain insights into daily tasks and organizational data.

With the advent of innovative technologies, machines are connected together, the process of data collection is automated, and tedious tasks are turned into streamlined ones.  

Smart factories are expected to boost the economy by adding $500 billion to $1,500 billion annually to the global economy in the coming five years. Let’s have a look at the concept of smart manufacturing and how it is helping businesses gain a competitive advantage.   

What is a smart factory? 

The smart factory is a flexible, integrated and innovative system that can autonomously run the entire production process using high-tech machines with minimal human intervention.   

Needless to say, this cannot happen without the internet. The internet is the foundation which enables connectivity. Smart equipment, sensors an analytical tools linked via the internet improve efficiency at all levels and make the system self-adaptable and versatile.  

A smart factory encourages responsive and adaptable production process which lets businesses gain insights into, and control, their operations. It integrates all operations into one system and powers the organization through connected and new manufacturing systems.  

INTEGRATION & AUTOMATION – The New Frontier of Manufacturing System 

A smart factory can lay a strong foundation for small and mid-sized businesses.  

Technologies like IoTCloud, Big Data, Machine Learning, and Artificial Intelligence are shaping the future of the manufacturing sector. These capabilities, when implemented collectively in the manufacturing ecosystemsupport lean manufacturing and help organizations get more out of small investments.  

A smart factory may also colloquially be known as the integration of those technologies that enable the act of production and makes it easier and more streamlined. When cost is reduced and production is improved, it ultimately leads to increased bottom-line profits and better business stature – this is the promise of a smart factory.     

Let’s talk about technologies here.  

Internet of Things  - Flexible IoT enabled infrastructure connects machines and technologies with sensors and other information technologies. When talking about the global manufacturing market, Market Research.com suggests IoT is anticipated to grow at Compound Annual Growth Rate (CAGR) of 29% during the forecast period. In other words, it can grow from USD 12.67 billion (2017) to USD 45.30 billion (2022). 

Artificial Intelligence  is the simulation of human intelligence processes by machines, especially computer systems. These processes include machine learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions) and self-correction. It uses algorithms to analyze data.  

 and automation  Gone are those days when manufacturers invest in manually-operated machines. Now, self-operating machines and robots are being used to minimize human intervention and improve efficiency and lead times 

Digital twins
  A digital twin is a virtual representation of a product. It can be used in product design, simulation, monitoring, optimization and servicing and is an important concept in the industrial Internet of ThingsIt is a model that is retained for later stages of the product's lifecycle, such as inspection and maintenance.  Sensors connected to the physical product can collect data and send it back to the digital twin, and their interaction can help optimize the product's performance. 

Wearable and mobile technology  Smart glasses, gloves, smartwatches, and other tracking items can be worn on the body comfortably and are used to track and manage operations in real-time, as well as provide virtual-reality assistance 
These technologies bring the systems together, integrate the data and ensure that operations are performed in a hassle-free manner. 

Connection of smart factory with ERP 

A smart factory is an interconnected and highly advanced manufacturing process and production facility that makes data management, product management, and operations management streamlined and hassle-free. When ERP is implemented in a smart factory, we call it Intelligent ERP 

iERP (intelligent ERP) ties all the innovative technologies together to automate large-scale processes and expedite manufacturing execution time. It is a system of integration that uses all the evolving technologies to track end-to-end operations.   

Let’s see how smart factory benefits the organization-  

Benefits of Smart Factory 

1.Lowered cost – When lean manufacturing strategies are adopted and operations are done on a timely basis, the cost is significantly reduced. The impetus behind the smart factory ensures avoidance of excessive inventory cost and unpredictable production volume or time. Smart factories and better quality process go hand in hand. This reduces warranty and maintenance cost.

2.Proven productivity  Continuous and sustainable productive environment adds a lot to the company’s bottom line. Smart technologies improve throughput, offer seamless visibility into bottlenecks and reduce the intervention of human efforts. This eliminates human errors and data redundancy. With advanced production analytics and automated data collection strategies, managers can monitor their key performance indicators via the internet and smart devices.

3.Ultimate flexibility Offering unlimited potential, smart factories are the future of the manufacturing world. The smart factory is an umbrella term that can self-optimize on its own and autonomously run the entire production process while adapting to changing conditions and market demand. 

4.Innovation and continuous improvements  When money, time and efforts are saved, management can focus on innovating their products and expanding their range. Smart technologies help businesses gauge market needs and assist the team to fill any gaps.   

5.Reduced workforce challenges and fostering digital culture  Smart capabilities like IoT, AI, and Machine Learning have their pervasive roles. These technologies are empowering the human workforce to remain productive and engaged throughout the processes.

Smart technologies are driving the manufacturing sector. Manufacturing businesses need to know how to stay competitive by leveraging new technologies, smart factories, digital transformation, intelligent ERP etc. Check out this blog for more information.


OptiProERP empowers you to improve the efficiency of your manufacturing operations. Discover true value with predictability and transparency in your business. An affordable, reliable, complete ERP solution, OptiProERP, makes the complex simple.


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