Digitalization, so the story goes, offers a wide array of advantages. They include predictive maintenance that will reduce downtime through the creation of “digital twins,” enhanced quality control, demand-driven production, inventory optimization, reduced energy and material costs, and improved safety and environmental performance.
Numerous estimates attempt to quantify the value proposition. Consulting firm McKinsey says the economic impact could be between $1.2 and $3.7tr by 2025. A recent U.S. Department of Commerce survey of U.S. manufacturers and smart manufacturing vendors suggests $57bn dollars in annual cost reductions.
Of course, there is a catch. Several, in fact. Investment cycles in the manufacturing sector are extremely long. Robust processes and devices will not spring up overnight. Critically, the needed technologies — such as artificial intelligence, or AI — are not yet fully developed.
AI as the Catalyst
Smart factories leverage the industrial internet of things (IIoT), big data, and advanced analytics. Information technology (IT) and operations technology (OT) converge. Devices that communicate with each other lead to real-time decision-making that optimizes value creation.
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