Key trends shaping digital transformation in manufacturing

By and Nancy Greco | 5 minute read | January 27, 2021

The pandemic has accelerated digital transformation in manufacturing like never before, as companies had to adapt to supply chain disruptions, remote work and new delivery models. Previously, organizations gained a competitive edge by adopting emerging technologies and applied analytics. Today, technology is being developed and adopted at such rapid speeds, to be competitive a company needs to pivot to a new faster, more efficient way of adopting innovation.  The new way is a holistic, intelligent way of designing for and adopting new technologies so that the factory learns and reacts, versus the historic means of rule-based programming for analytics. Digital transformation is the key to getting to this new intelligent factory.

Intelligent factories emerging as cornerstone of Industry 4.0

Experts have coined the phrase Industry 4.0, in reference to the shift to digital-first factories signaling the fourth industrial revolution. The Davos Agenda is a mobilization of global leaders to address global economic, environmental, social and technological challenges. As part of the upcoming World Economic Forum in January 2021, The Davos Agenda will devote an entire day to addresses, panels and impact sessions on harnessing the technologies of the Fourth Industrial Revolution.

According to the IBM IBV Smart Manufacturing Report, intelligent factories are built on edge- and cloud-computing infrastructures that power localized optimization and connected assets with AI algorithms. To proactively make decisions that improve productivity, factories utilize a seamless integration of systems and devices to access a wide range of data sources from inside and outside their factories. External data like weather forecasts, epidemics, and market-demand projections that influence raw-material sourcing, global inventory updates and energy   availability will be critical in production planning. In an intelligent factory, all processes, data and systems integrate together to facilitate real-time decisions by both humans and devices for the highest possible quality, efficiency and risk mitigation.

Integrating emerging technologies to build an intelligent factory

In addition to increasing revenue and productivity, moving to an intelligent factory empowers humans to higher-level tasks such as understanding root cause, designing higher quality, and reducing energy consumption, all while developing their digital expertise. Organizations can accelerate both employee transformation and that of the industry by focusing on the following technologies:

AI at the Edge

Intelligent factories need a tremendous volume of data to gain insight in seconds if not milliseconds. To achieve that low latency, factories cannot afford to waste time, moving data from the source to the analytics. They need to use edge computing to move the analytics as close to the data source as possible. Factories cannot afford to spend time discovering and writing rules to detect anomalies – their factory must learn from the data in real time. AI creates machine learning models to proactively detect and correct anomalies before an impact occurs.  Improved data latency coupled with machine learning, will dramatically change the way factories optimize maintenance schedules, spot production glitches, monitor the quality of products, and ensure the work schedule optimizes human and machine resources. And AI can help find and create new data sources, to fill in the missing link to solve difficult problems. An Intelligent Factory will be equipped with the ability to sense a problem by listening, smelling, and tasting in addition to touching and seeing. And those senses are on the edge.


Sensors, machines and devices are often spread throughout the factory. 5G provides factories with an affordable method to create large, wireless sensor networks that enable the IoT network to gather insights from factory to factory, or within factory machinery, operations, risks, etc to improve both data collection and automation. By combining 5G with edge computing, intelligent factories more quickly analyze IoT data collected from automated machines and industrial robots. Manufacturers can then more easily reconfigure their production lines and assets hourly, daily or weekly to support variable contracts and customer customization.

Smart Industrial Robots

While production automation and robots have been used in factories for decades, the control systems and programming languages have not historically been able to adjust to complex changing conditions, such as increased customer orders or lower machine performance in another part of the factory. By using robots in conjunction with AI and other emerging technologies, manufacturers take a critical step toward transforming into an intelligent factory. In this model, robots do not simply perform tasks, but engage in data collection, sharing and analysis to help in solving problems with humans. Additionally, robots’ actions are changed based on predictions and real-time data insights. Collaboration robots, cobots, will emerge to work with humans to do tasks that are possible risks to humans, and manually intensive repetitive tasks, allowing a human to work safely and smarter at a distance.

Digital Twins

Manufacturers can digitally replicate different scenarios by having a digital twin behave like a device’s real-life equivalent to gather data on the most effective solution, such as determining the most efficient maintenance framework. According to Gartner, 75 percent of organizations implementing connected devices already use digital twins, or plan to within a year. By combining digital twins with IoT data and AI, manufacturers can create a sensor-connected virtual simulator with many use cases, such as improving quality of goods, designing predictive maintenance, optimizing production processes and risk mitigation scenario planning.


Factories are also using 5G and edge computing to run alternate reality/virtual reality (AR/VR) applications. Through this technology, factories create the experiences to improve the production floor’s performance. AR/VR will guide employees to assemble a product or repair a machine with a real-time feedback loop to confirm that it was done correctly. And if not correct immediately with prompted step by step instructions on how to correct.  AR will guide inspections to ensure all locations are inspected, and parts are in the correct location or position, and pass the quality criteria.AR/VR will be embedded in training to help employees rapidly attain expertise without burdening a trainer to oversee them. AR/VR will deliver both the on prem and virtual experience of walking the factory floor, finding assets and instantly seeing the history of the asset’s health, experiencing the layout of the factory, etc. to enable better design, planning and problem solving to a larger community of experts, that can see exactly what the technician , floor manager, operator, etc. is seeing and doing. Imagine having a host of experts with you on the factory floor when you need them. AR/VR will be a critical success element to truly achieve zero escapes, zero defects!

Manufacturers must embrace this transformation to enable the redesign of their processes and experiences to rapidly adopt differentiating technologies.  Evolving to an Intelligent factory requires planning, where and how to start to achieve the ROI which enables the reinvestment to drive the end to end transformation. Innovation will continue to occur at an amazing rate propelled by cloud, edge, AI, AR/VR and a host of new analytics. Maintaining a competitive edge will be a direct function of how rapidly a factory can adopt and adapt to these new technologies. Industry 4.0 is a new world, a new way of working, producing and learning. It is time now to harvest the rewards it can offer.

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