Jason Bergstrom, principal and smart factory leader with Deloitte, traces the evolution of the smart factory, and defines the term as it applies to modern-day technology tools.

The definition of the term “smart factory” has evolved over the years, in line with developments in technology. Earlier applications tended to be tailored to particular facilities with narrow use cases, Bergstrom says. But as adoption rates accelerated, factories began to acquire more integrated systems that cut across functions and were more “end-to-end” in nature. In addition, the arrival of the cloud and internet of things made technology adoption easier, while providing factories with more data than ever before.

The smart factory of today embraces multiple cutting-edge technologies, including vision systems, autonomous mobile robots and use of a digital twin to run simulations and optimize operations. “All are making huge contributions,” says Bergstrom.

All of these technologies promise greater efficiencies and cost savings in the long run, but they do require a substantial up-front investment. “Certainly it’s not for the faint of heart,” Bergstrom says. “It does cost money.” And once the money spent, in addition to acquiring and becoming familiar with the technology, operations must consider the implications for human workers. A smart factory means fewer people on the production line, but also necessitates hiring a more educated group of humans to design systems and manage the machines.

Still, factories have little choice today but to embrace smart technology. The pandemic has presented a whole new set of challenges to supply chains, including access to labor and the need to overcome congestion and shortages throughout the system. To succeed in a difficult environment, factories must make the shift from analog to digital — in effect, become “smart.”