Complete Guide to Smart Manufacturing

Smart manufacturing is a technology-driven approach that utilizes Internet-connected machinery to monitor the production process. The goal of smart manufacturing is to identify opportunities for automating operations and use data analytics to improve manufacturing performance.

What is Smart Manufacturing?

Smart manufacturing is a technology-driven approach that utilizes Internet-connected machinery to monitor the production process. The goal of smart manufacturing is to identify opportunities for automating operations and use data analytics to improve manufacturing performance. Smart manufacturing wasn’t developed in a single moment in time but a progressive series of smaller instances over 30 years that make it what it is today.

But if you are looking for more comprehensive definitions, there are two from leading organizations. According to the National Institute of Standards and Technology (NIST) their definition of smart manufacturing says:

“smart manufacturing systems that are fully-integrated, collaborative manufacturing systems that respond in real-time to meet changing demands and conditions in the factory, in the supply network, and in customer needs.”


Defining Smart Manufacturing

The SMLC definition states, “Smart Manufacturing is the ability to solve existing and future problems via an open infrastructure that allows solutions to be implemented at the speed of business while creating advantaged value.” 

Smart Manufacturing is being predicted as the next Industrial Revolution. And, as with many other advances throughout recent years, it all has to do with technology connectivity and the unprecedented access to and contextualization of data. Think of your smartphone, only on a grander scale.

There are “microprocessors” that make it possible for Smart Phones to operate like mini-computers. There’s the “cloud” where almost an unlimited amount of data can be stored and retrieved.

This brings us to a common question: What is a smart factory? A smart factory is a highly digitized and connected production facility that relies on smart manufacturing. Thought to be the so-called factory of the future and still in its infancy, the concept of the smart factory is considered an important outcome of the fourth industrial revolution, or Industry 4.0

The Industrial Internet is the integration and linking of big data, analytical tools and wireless networks with physical and industrial equipment, or otherwise applying meta-level networking functions, to distributed systems. The term was coined by General Electric (GE), a U.S. corporation.

Smart Manufacturing not only heavily assists Supply Chain due to the ability to forecast and be efficient as possible but it plays a huge role in Industry 4.0 through Cloud computing. Cloud-based solutions offer manufacturers cost-effective data storage and data security, as well as services such as enhanced analytics, machine learning, insights around operational efficiency, and more. Now, more than ever before, manufacturers are eager to leverage the power of the cloud to support their digital transformation.


Benefits of Smart Manufacturing

The smart factory is a key concept for manufacturing. Advantages from data can be gained through analysis, rapidly turning data into insight and actionable information, increasing productivity, identifying inefficiencies, and driving operational improvements. To take advantage, manufacturers need to invest in systems that can efficiently manage massive amounts of complex product and operational data. This provides employees and executives the ability to make connections between day-to-day operations and strategic business goals.


Interoperability is the key to smart factory success, as technology systems should work together so businesses can access data from different parts of the business. This allows the digitization of business processes – from product design to manufacturing process planning, to manufacturing execution. They must also provide their employees with tools to turn this data into actionable intelligence.

Reducing Costs

The smart factory can reduce costs and requires fewer people with lower operating costs. It’s more agile, delivering high quality and fast production that is responsive to customer needs, providing the business with more granular and real-time information.

Smart manufacturing can also reduce and avoid capital and operating costs. Manufacturers can leverage the technology to reduce labor, material usages and material waste, energy usage and rework costs.

Improved Performance

Smart manufacturing can boost a business’s bottom line through improved manufacturing processes. For many manufacturers, simply implementing technology for the sake of technology will not produce the desired business outcomes. Manufacturers who leverage smart manufacturing technology and align it with their strategic business goals and objectives will gain a much stronger return on investment (ROI). In doing so, manufacturers will see a real impact on their bottom line with significant new capabilities, such as increased agility, flexibility and responsiveness. Research by the MPI Group found that 69% of manufacturers credit their use of internet of things (IoT) technologies for increasing their profitability.

Manufacturers can also leverage smart manufacturing to make data-driven decisions that help increase product quality and delivery performance to their customers. With improved data capabilities, they can also create new business models and develop better production capabilities for improved consistency, predictability and customer service. Finally, they can also prepare to meet regulatory compliance requirements and open new doors to future customers.

Better Decision-Making

Smart manufacturing improves team decision-making, as it helps companies democratize data, making it available to everyone who needs it — when they need it. It also helps companies streamline and automate communications throughout the manufacturing operation. And, maybe the most important of all, it helps people in the manufacturing organization collaborate better with their customers and suppliers.

Minimize Risk

Another important aspect of smart manufacturing is the ability to reduce risk. People can quickly see, communicate and address the risks associated with the economic climate, demand trends, demand fluctuations, and disruptions in the supply chain, to name a few.

You can use ROI to select smart manufacturing solutions by understanding strengths and efficiencies but also acknowledging downfalls and vulnerabilities. It is important to perform a detailed ROI calculation before choosing Smart Manufacturing solutions.  Carefully evaluating the cost savings from different solutions will helps get the most bang for the buck.  By improving your overall manufacturing strategy, you can achieve manufacturing excellence. To see where you stand for a quick ROI assessment click here


Smart Manufacturing Process

Smart manufacturing requires more than just investing in the latest IIoT solutions and technologies. Organizations that successfully incorporate smart manufacturing must experience a top-down shift from a process-first mindset to a culture-first mindset, effectively prioritizing the people side of the business.

When every level of an organization is engaged and invested, a company can truly move forward and join “industry 4.0.” The following are necessary focus areas for the successful integration of smart manufacturing principles and solutions.

Empower People

Manufacturers that want to establish a culture of innovation must first realize the value of every employee. Implementing advanced technologies that can take over mundane tasks and enable employees to function at their highest levels enables these same employees to create high-quality goods more efficiently, boosting overall productivity and enhancing the bottom line.

Advanced technologies and connected “smart” solutions that empower employees with data-driven insights to make real-time decisions feed organizational agility. An agile organization is a profitable organization able to quickly adapt to shifting consumer demand or fluctuating material and product specifications.

Create Effective Teams

Smart manufacturing requires managers to create and coach effective teams, ensuring departments work together, collaborating to quickly solve problems, and make decisions when problems or abnormal conditions arise. Functioning teams must understand production and profit goals to make decisions that are best for the organization. Effective teams can avoid line shutdowns, reduce production lag times, speed time-to-market, and cut costs.

Connect Leadership

Smart manufacturing needs smart leaders that connect and motivate employees and teams, helping everyone adjust to change, understand the organizational vision, and feel empowered to play their vital part in the “new way of doing business.” Connected leaders engage employees to help reconfigure production lines, workspaces, and more to most effectively incorporate new, digital technologies and solutions.

Without connected leaders, collaboration fails, and cohesion between human capital and technology cannot effectively occur. Constant communication and a transparent coaching attitude in the C-Suite can determine the success or failure of a truly modern plant.

Manage Change Management

Incorporating advanced IIoT technologies and digital solutions on the shop floor will transform processes, employee roles, the way teams communicate and work together, the underlying business culture, and more. A top-down leadership approach to managing these paradigm shifts requires constant communication to guide the company, its employees, and partners through transitional periods. Connected leaders must transparently illustrate the unique value of digital transformation and prepare every employee or team to adjust and overcome challenges as they arise.

Start with Freedom

FREEDOM is an asset monitoring system that collects and analyzes important manufacturing data in real-time, arming your team with the data required to optimize utilization, improve quality and performance, root out inefficiencies, and maximize profit. By integrating with a wide range of business systems, FREEDOM helps companies identify bottlenecks, streamline processes, and improve operational efficiency and overall equipment effectiveness (OEE).

Today’s consumers increasingly demand greater customization in products. An organization’s ability to produce high-quality products and adapt to a shifting marketplace determines whether or not it can compete and succeed long-term. Advanced, digital IIoT solutions like FREEDOM are helping manufacturers empower employees, create effective teams, and effectively manage change, helping manufacturers create a true smart manufacturing culture from the shop floor to the top floor.

The critical thing is to take the first step quickly. With a pilot project or with a more complex and impactful project, it’s important to buy the ticket and start the journey. In the digital era in which we live, there is no option. Companies can choose to change and evolve or be overtaken by more agile players that can be totally disruptive to the marketplace.

Future of Smart Manufacturing

A common misconception about smart manufacturing is that it will require organizations to drastically transform their current operations and invest in advanced technology that will be too complex to adopt. While some change is necessary, smart manufacturing greatly simplifies this transition by integrating the capabilities that manufacturers have currently.

One of the key concepts involved is recognizing the value of data as a key asset to be developed and managed. Put another way, for a system that analyzes data, the key asset is not the analytics system itself but the volume and variety of the data required.  Such an emphasis on data causes us to think differently about where to focus resources.

For any operational objective, there needs to be a source of relevant data. The sources of data can be as basic as a single switch, tablet or smartphone — or as sophisticated as a wide-area sensor network. The point is, data is valuable in the context of the operational objective, not the sophistication of the sensors. There are many highly beneficial applications that can draw upon data.

Infrastructure changes needed to accommodate the applications that use and act on the data happen within the smart platform — giving manufacturers the convenience of making less drastic changes within their facilities. smart manufacturing will lead to significant changes in business opportunities and operations over time.


The Largest Change is in People – not just Technology

A major part in seeing success early has to do with the company culture and the commitment of team members. It’s important to remember that all the integration and use of technology is rendered useless if it is combined with employees who don’t fully understand how it will make their job easier, not harder.

And just as crucial as employee support is needed for a successful smart path, it can also serve as the biggest hurdle in implementation.

We’re in the presence of a significant transformation regarding the way we produce products thanks to the digitization of manufacturing. This transition is so compelling that it is being called Industry 4.0 to represent the fourth Industrial revolution that has occurred in manufacturing. From the first industrial revolution (mechanization through water and steam power) to the mass production and assembly lines using electricity in the second, the fourth industrial revolution will take what was started in the third with the adoption of computers and automation and enhance it with smart and autonomous systems fueled by data and machine learning. This type of industrial transformation is the future of manufacturing. Artificial intelligence, real-time data and predictive maintenance are also all key factors as well. Manufacturing companies will be able to flourish if they begin to adapt smart manufacturing practices.

For more information about the Freedom Smart Manufacturing Platform, contact Sam Bowman at 513-719-1617 and

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