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What is Smart Manufacturing? A Breakdown of the Basics

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Technology shifts the way people live their daily lives: it offers new ways to communicate, work, or even to sleep. Now, it’s changing the reality on shop floors. Besides phones, watches, and televisions, the smart prefix also connects with the manufacturing industry: smart manufacturing.

Manufacturing industries have joined the digital transformation wave and are benefiting from results including, OEE, productivity increase, cost reduction and risk minimizing. If you want to learn how smart manufacturing is transforming industries with digital, intelligent resources, this article is for you.

In this article, you will learn:

  • What is smart manufacturing?
  • How does smart manufacturing relate to Industry 4.0?  
  • What countries and industries have adopted smart manufacturing the most?
  • What does smart manufacturing promise for the future?

What is smart manufacturing?

Smart manufacturing is a set of combined technologies that optimize the entire ecosystem of the production process. It's not one, but many integrated resources that make machines smarter, faster, automated, and data-based, improving results from the supply chain to the workforce. These technologies operate machine-agnostic and are not limited to specific machines from one supplier only.

Internet-connected machinery (which you may have heard of within the concept of “Industrial Internet of Things”, or “IIoT”) provides essential information and data to improve equipment and production efficiency. Manufacturers have access to the information in real-time through the cloud, which is used to influence shop floor performance.

Several solutions can be implemented in digital manufacturing, including those that focus on real-time monitoring of production lines, boost Overall Equipment Effectiveness (OEE) based on centerline machine learning, and even AI analysis of the entire factory’s data.  

In a nutshell: smart manufacturing is the combination of digital-driven applications that are implemented to constantly optimize efficiency and uncover opportunities to improve production performance, and lower costs - making processes smarter.  

How does smart manufacturing relate to Industry 4.0?  

Industry 4.0 (also known as the Fourth Industrial Revolution) is the 21st century industrial movement towards automation and data exchange in production processes. The first industrial revolution was mechanization through water and steam power; the second was mass production and assembly lines using electricity; the third was the widespread adoption of computers and automation. Industry 4.0 leverages the third revolution through innovation with smart and autonomous systems powered by data and machine learning.

The German government adopted the name "Industry 4.0" for the Industry of The Future guidelines, which are focused on the cloud, connectivity, software, and robotics.

Smart manufacturing is the manufacturing strategy that enables the implementation of Industry 4.0.

What countries and industries have most adopted smart manufacturing?

The four countries that have most adopted smart manufacturing are also the most developed manufacturing economies globally: China, the United States, Japan, and Germany. These countries' transportation industries (automotive manufacturing, in particular) are the largest in revenue production and success - except for China, where the electronics industry comes first, and automotive second.

What does smart manufacturing promise for the future?

Smart manufacturing is about harnessing the power of technology to improve productivity. It helps companies reducing waste, and thereby saving money, through more efficient production.

ABI Research predicts that by 2030 manufacturers will spend more than US$950 billion on smart manufacturing. In 2021, the amount invested into smart manufacturing was US$345 billion.

The significant growth of this technology market is a direct result of its remarkable impact on the new manufacturing context. No manufacturer should stay out of this upwards trend.