In most developing countries, manufacturing and industrial sectors form the backbone of the economy. The availability of relatively cheap raw materials and labor have long been major factors driving production across those regions. More recently, another development promises to impact the future of manufacturing in emerging economies: the rise of smart factories.

Between fiscal 2012 and 2018, the gross value added (GVA) of India’s manufacturing industry experienced compound annual growth of 4.34%. The government’s Make in India initiative is focused on boosting the manufacturing sector’s share of GDP to 25% over the next few years.

Smart factories offer multiple advantages to businesses, including enhanced productivity, energy efficiency, superior product quality, increased variety of manufacturing jobs and product, and operational innovations.

Schneider Electric, a France-based electrical equipment manufacturer, has established its second smart factory in Bengaluru, India. The facility is intended to demonstrate how the company’s EcoStruxure architecture enhances operational efficiency and reduces cost. It enables real-time monitoring of machine performance and preventive maintenance, which improves agility and optimizes costs.

Technological innovations in every sector are driving a burgeoning demand for intelligent internet solutions that enhance output and save on operational and labor costs. Technologies such as artificial intelligence, the internet of things (IoT), analytics and big data are vital factors in supporting the implementation of smart factories. Global Market Insights, Inc. estimates the worldwide smart-factory industry to reach $155 billion by 2025.

Rise of Industry 4.0

Industry 4.0 is a term that describes systems adopted by businesses across the globe to enhance and digitize manufacturing. It’s an idea that places the focus on real-time data, machine learning, interconnectivity and automation. The concept is an amalgamation of physical operations with smart digital technology and big data, with the goal of rendering a connected ecosystem that focuses on supply-chain management and manufacturing excellence.

Advanced robotic products are being deployed to transform industrial operations. They provide superior perception, mobility, adaptability, and integrability. Driven by a desire to adjust to the ever-changing needs of customers, producers are upgrading facilities and processes with the aid of digital technologies.

In 2016, South Korea was the most automated country in the world, with 631 robots being deployed for every 10,000 employees. Leading automobile and food manufacturers have incorporated industrial robots powered by AI technologies to smooth operations and cut down on costs.

The growing focus on deploying Industry 4.0 technologies has opened up a plethora of opportunities for robots, sensors, equipment and software providers. U.S.-based Emerson Electric launched Plantweb, a service and software platform, to enable insights that can be used by personnel to achieve operational excellence. Through the implementation of cost-effective, innovative and advanced strategies, Plantweb provides the required data to improve overall performance of the business.

Development of Sensors

Sensors have gained significant traction across the commercial and industrial space over the past few years. They provide accurate, real-time information, as well as enhanced efficiency of IoT devices.

Smart devices can have a positive impact on every area of business, helping to decrease the cost of energy and boost productivity. They provide live updates on how energy is being used through continuous tracking and data collection. As the driving force behind digital twins, sensors can manage and maintain assets, linking to monitors that can detect any issues or switch off assets when not in use.

California-based Qualcomm Ventures reportedly invested $8 million in Augury, a firm that helps manufacturers use machine learning and sensors for real-time and smart systems. Augury’s sensors monitor the health of industrial machines by tracking temperature, vibration and magnetic data, for assets such as air-handling units, cooling towers, hot and chilled water pumps, refrigeration equipment and fans.

Sensors connect to the cloud, along with machine-learning algorithms, draw on data received from over 80,000 machines and 20 million machine hours of operation. They also track changes in behavior, such as vibration, and provide any required recommendations.

Advanced Auto Manufacturing

The gradual advance of vehicle technologies worldwide is driving innovation in the automotive industry. A rise in consumer purchasing power and changing consumption patterns are increasing sales of automobiles, including electric vehicles and hybrids, in developed and developing nations.

In 2018, the total number of vehicles produced in the EU was 19.2 million units. The region is expected to witness rapid growth, due to high disposable income among its citizens, and their ability to spend on advanced products. The turnover generated by the industry represents more than 7% of the EU’s total GDP.

Volkswagen commenced its smart-manufacturing initiative in March, 2019 at three plants. The automotive giant aims to implement the program in another 15 of 122 factories globally as a part of its five-year strategy to build a strong production base, using a combination of big data, cloud computing, machine learning, and sensor-laden equipment.

The industrial cloud is a primary element in the company’s plan to boost productivity by more than 30% by 2025. Volkswagen’s cloud project is being developed in partnership with Amazon Web Services, which will reply on a digital production platform to solve issues related to quality and productivity.

The Food and Beverage Sector

Rising world population is pushing production capacities in the food and beverage industry. In emerging nations, an increase in employment and changing consumer patterns are driving the processed food sector. India’s food processing industry is projected to grow to $543 billion by 2020, presenting tremendous opportunities for smart-factory equipment and service providers, both local and global.

Smart factories have the potential to change the way the food and beverage industry functions. New technologies are aiding in accurate production and efficient use of ingredients, thereby reducing waste, and leading to safe and compliant operations. With the growth in demand for farm-to-fork products, smart factories allow manufacturers to communicate more clearly and precisely with supply-chain partners.

Companies gain the ability to source ingredients more quickly, boosting order and delivery efficiency and facilitating transparency. Seamless supply-chain systems enhance productivity while ensuring the availability of products when required.

F&N Foods, a Singapore-based food-product supplier is setting up a smart factory in that country, with the aim of expanding its capabilities across business functions. The 375,000 square-foot plant costs more than $59 million and is set for completion in 2021. With operations to focus on water and energy efficiency, it’s designed with an automated storage and retrieval system.

Better knowledge of data patterns from production to consumption is highly beneficial for factory maintenance and business development. The smart factory is an emerging notion that helps companies expand their geographical horizons, and provides better, safer and more advanced products by way of digitization.

Shreshtha Dhatrak is research content developer with Global Market Insights.