The Smart Factory

Most of today’s factories use a variety of new manufacturing technologies, including advanced robotics, numerically controlled machine tools, radio-frequency identification (RFID), wireless technology, and computerized software and artificial intelligence (AI) for product design, engineering analysis, and remote control machinery. The ultimate automated factories are referred to as smart factories.

A smart factory is one in which computer-guided machines handle many of the routine tasks and factory plants are digitally connected to one another and to suppliers and customers in a digital supply chain network.

A study found that manufactures in the United States use more than six times the amount of information-processing equipment (computers, etc.) as they used 20 years ago. This increase reflects the growing uncertainty and tough challenges manufacturing organizations face, including globalization of operations, increased competition, greater product complexity, and the need to coordinate with a larger number of business partners.

The smart factory typically includes several subcomponents:

  1. Computer-Aided Design (CAD)

Computers are used to assist in the drafting, design, and engineering of new parts. Designers guide their computers to draw specified configurations on the screen, including dimensions and component details. Hundreds of design alternatives can be explored, as can scaled-up or scaled-down versions of the original.

  1. Computer-Aided Manufacturing (CAM)

Computer-controlled machines in material handling, fabrication, production, and assembly greatly increases the speed at which items can be manufactured. CAM also permits a production line to shift rapidly from producing one product to any variety of other products by changing software codes in the computer. CAM enables the production line to quickly honor customer requests for changes in product design and product mix.

  1. Robots

Automakers have been using large robots on the assembly line for years, but a new generation of smaller, simpler robots enables small and medium size manufacturers to benefit from also. These new robots can communicate and collaborate with human employees and help with every phase of the manufacturing process, from delivering parts to assembling products to warehousing to packing and shipping.

Aided by new imaging and human interface software and advances in object detection and sensor technology, these robots can be used by manufacturers of all sizes because they can run “cage-free.” They can sense and react to their “co-workers,” have built-in safety mechanisms, and are capable of making commonsense decisions while performing repetitive tasks.

  1. 3-D Printing

Also known as additive manufacturing, 3-D printing builds objects one successive layer of material at a time. 3-D printing was initially used to make plastic mock-ups of CAD files and was referred to as rapid prototyping. In the two decades since, the technology has evolved from prototyping into production, so that engineers can model an object on a computer and print it out with plastic, metal, or composite materials rather than cutting or drilling the object from molds. This results in less wasted materials, allows manufacturers to get products to customers more quickly, and enables on-site production of needed parts in remote locations such as oil rags. For example, Navy ships are using 3-D printing to produce some parts on board.

In a smart factory, a new product can be designed on the computer and produced untouched by human hands. Porsche is using 3-D printing technology to recreate obsolete parts for its classic car models with “absolute fidelity to the original specifications.” The ideal smart factory can switch quickly from one product to another, working fast and with precision, without paperwork or record keeping to bog down the system. In addition, new software can coordinate information from multiple departments and organizations involved in a design, and virtual designs can even include an entirely new factory.

The Siemens Electronic Works facility in Amberg, Germany, is a good example of a smart factory. Its integrated smart machines coordinate the production and distribution of the company’s SIMATIC control devices, which involves a custom, build-to-order process encompassing more than 1.6 billion components from 250 suppliers to make 950 different products in 50,000 annual product variations. And they do it all with a 99 percent reliability rate and record only about 15 defects per million. Automakers also provide good examples of the benefits of the smart factory. Honda has achieved an amazing degree of flexibility at its plant in East Liberty, Ohio. Considered the most flexible auto manufacturer in North America, the Honda plant can switch from making Civic compacts to making the longer, taller CRV crossover in as little as five minutes. All that’s needed to switch assembly from one type of vehicle to another is to put different “hands” on the robots to handle different parts. Employees at Nissan’s Smyrna, Tennessee, plant make six different vehicles—three cars and three SUVs—on two production lines. A sophisticated high-tech system enables production to run smoothly and efficiently, with each line producing 60 vehicles an hour. “No matter which model comes down the line, the right parts are waiting for it,” said Nissan’s Ryan Fulkerson. The ability to quickly adjust inventory levels of different types of vehicles has been a key strategic advantage for Honda and Nissan in an era of volatile gasoline prices and shifting vehicle popularity.

An organization’s core technology is the work process that is directly related to the organization’s mission, such as teaching in a high school, medical services in a health clinic, or manufacturing at American Axle & Manufacturing (AAM) Opens in new window.

AT AAM, Opens in new window the core technology AAM, the core technology begins with raw materials (e.g., steel, aluminum, and composite metals).

Employees take action on the raw material to make a change in it (e.g., they cut and forge metals and assemble parts), thus transforming the raw materials into the output of the organization (e.g., axles, drive shafts, crankshafts, and transmission parts).

For a service organization like UPS, the core technology includes the production equipment (e.g., sorting machines, package handling equipment, trucks, and airplanes) and procedures for delivering packages and overnight mail. In addition, as at companies like UPS and AAM, computers and digital information technology have revolutionized work processes in both manufacturing and service organizations.

Figure X-1 features an example of core technology for a manufacturing plant. Note how the core technology consists of raw material inputs, a transformation work process (e.g., milling, inspection, assembly) that changes and adds value to the raw material and produces the ultimate product or service output that is sold to consumers in the environment.

Illustration of organization's core transformation process Figure X-1. Credit — Slideplayer Opens in new window

In today’s large, complex organizations, core work processes vary widely and sometimes can be hard to pinpoint.

A core technology can be partly understood by examining the raw materials flowing into the organization, the variability of work activities, the degree to which the production process is mechanized, the extent to which one task depends on another in the workflow, or the number of new product or service outputs.

Organizations Opens in new window are also made up of many departments, each of which may use a different work process (technology) to provide a good or service within the organization.

A noncore technology is a department work process that is important to the organization but is not directly related to its primary mission.

In Figure X-1, noncore work processes are illustrated by the departments of human resources (HR), accounting, research and development (R&D), and marketing.

Thus, R&D transforms ideas into new products, and marketing transforms inventory into sales, each using a somewhat different work process. The output of the HR department is people to work in the organization, and accounting produces accurate statements about the organization’s financial condition.

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    Research data for this work have been adapted from the manual:
  1. Organization Theory and Design By Richard L. Daft