Connected Factories: Top Use Cases and Benefits

Apr 28, 2021
Manufacturing | 10 min READ
What are Connected Factories
With the technological disruption altering the industry ecosystem, manufacturing industries are somewhat stuck in adapting and reacting faster to this change. Manufacturers and suppliers are projected to have a value creation potential of $3.7 trillion in 2025. Unclear business goals, limited resources, and an enormous number of potential use cases fail to provide the companies clarity on how to 'unstuck' themselves from this situation. This is when Industry 4.0 ensures to be the silver lining. The real challenge is how to scale up and make the best Industry 4.0 solutions to improve productivity.
Shamdutt Kamble
Shamdutt Kamble

Global Practice Director

Digital Manufacturing


Amidst such chaos, Artificial Intelligence (AI) brings peace by introducing the concept of 'Connected Factories.' Connected Factories are those entities that are built using sensors and inexpensive cloud technology. From manufacturing devices to processes, cloud-based storage and analytics assess real-time data. This ensures timely, detailed intelligence to improve productivity, efficiency, and yields, ranging from stock and inventories to production status, supply chain distribution, and manufacturing facilities output. According to a BCG analysis, AI can reduce producers' conversion costs up to 20%, and it is imperative to design the factory of the future.
Key Features of Connected Factories
The factory of the future in the manufacturing world is gearing up to embrace Industry 4.0. Smart manufacturing is soon to replace and disrupt the space giving birth to smart factories, implying the digitization of the operations, empowering them with networked capabilities to enable seamless data exchange. Some of the distinct features of connected factories are as follows:
Touchless Systems
Minimizing human intervention in repetitive tasks and entire plant data automation enables a more self-service oriented set-up for factories through disruptive AI, chatbots, and intelligent business solutions. From product conceptualization and design to customer management, factories are going almost touchless.
Transparency Carved On A Single Source Of Truth
From processing raw materials to finished goods, these MES platforms are controlled and connected via cloud solutions and operating systems, ensuring a centralized information flow. This minimizes the risk of discrepancies and duplicates leading to one single source of truth.
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Manufacturing stakeholders can view critical data and insights as per their business persona, irrespective of operational locations.
Data Analysis From Connected Touchpoints
Data-driven solutions are one of the many prominent features of a Connected Factory. Any device or network that collects, processes, and relays data is essential to take a specific stance. In such a connected data-intensive ecosystem, 5G connectivity is beneficial. Faster data churning and low latency are essential to scale up smart factory projects.
Enable Real-Time Actions
Factory floors, assembly lines, production, and distribution are all monitored in real-time in a connected factory set-up. Automated alerts are enabled on order arrivals, inventory shortage, and when particular KPI thresholds are achieved. With the help of this avant-garde concept, manufacturers can take a proactive approach to operations management.
Easy To Scale Without Disrupting Existing Infrastructure
Connected factories ensure frictionless scaling as specific enterprise solutions are deployed using various types of cloud technology that speed up vital tech integrations and time-to-market. Therefore, the factories of the future are all well equipped to exhibit flexibility in case of central, regional, or decentralized deployments.
Key Features of Connected Factories
Key Features of Connected Factories

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Technologies That Power Connected Factories
Connected Factories are a culmination of Internet of Things (IoT), Predictive Analytics, Blockchain, AI, Machine Learning, mobility, 5/6G, cybersecurity, and every immersive technology building us the New Future. Let's throw some light on these technologies that power up connected factories:
Smart industrial IoT
  • AI/ ML: Quality control, a more thoughtful way of handling logistics, analyzing compliance risk and inventory, AI and ML have put the manufacturing operations on the map of progression. Seamlessly connecting one aspect of the entity with the other helps reduce customer churn and improve efficiency across the processes.
  • Blockchain: Ensuring secure and stable operations across all the verticals of manufacturing units, blockchain-enabled solutions like smart contracts, tokenization of assets, and self-verification portals help keep a tab on all the products and transactions happening across the verticals.
  • IoT: Leverage IoT data for inventory and product optimization, initiating quality checks at various points of production, alert stakeholders of the machine performance, inventory status, and logistics, and put in place smart packaging solutions are some of the ways IoT helps to bind everything together.
  • Automation: Automating processes is half of the job done. Intelligent automation irons out the creases in various stages of production, helping factories to function smoothly. From supplier selection to reduction of cycle times and error minimization, automation plans refine all that is in place.
  • Immersive Tech: AR-based solutions are imperative to the proper functioning of a 'Connected Factory.' From increasing customer engagement, giving them a real-time view of the work processes to improve workforce decision-making through simulation-based training practices and AR-based smart glasses, AR is empowering in numerous ways.
  • Mobility: When the world is adapting to a mobile-first economy, manufacturers need to step up. The concept of "Connected Factories" uses several mobile applications to assess supplier performance, speed up invoice processing, shipping, transactions, stock replenishment, vehicle movement, dashboards for planning, and keeping a tab on the quality control checklist to add convenience in the everyday duties.
Connected Factory and Smart Manufacturing Technologies
Connected Factory and Smart Manufacturing Technologies

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Top Benefits of Building Connected Factories
Powered by the next-gen technologies, 'Connected Factories' is the future that most businesses aim at, and some are already on their way to adoption. What are the benefits of having such a concept in place?
Accelerated Inventory Replenishment and Reduced Wastage
Companies can save up to 3% of the logistics cost, reducing event adversities by 18% through automated replenishment and accurate forecasting. Connected Factories does demand and supply planning well in advance instead of waiting for an order to come in and initiate the procurement cycle. This leads to warehouse space optimization and reduction of wastes.
Secure and Seamless Supplier Collaboration
Connected Factories opened gateways to B2B2C business model operations, where transactions happen through multiple suppliers' interactions. Blockchain-enabled smart contracts thus bind them together, securing every move and maintaining complete transparency with the stakeholders at play.
Knowledge Management and Upskilling Personnel
The wave of evolution must touch every shore, and in the case of "Connected Factories," every employee and stakeholder should be equipped to ride them smoothly. Using Augmented Reality, the workforce could be trained on the nitty-gritty of the operations, technological innovations, and their multifaceted role. Re-skilling, upskilling and safe monitoring of workforce to prepare them well through the journey.
Improved Visibility and Better Asset Utilization
One of the key benefits of having an IoT system is enabling real-time data transmission and views. Asset tracking, product design and development, quality checks, the evolved technologies display a clear and condensed dashboard for multiple touchpoints.
Performance Optimization
Increased real-time visibility and transparency enables system and operations performance optimization. Asset and system operating conditions are dynamically adapted to process disturbance and variability for optimal operational cost, process quality, output performance.
Benefits of Building Connected Factories
Benefits of Building Connected Factories

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Challenges in Building Connected Factories
Though digital transformation in smart manufacturing is radical and the shift is happening rapidly, companies are slowly embracing it. They are, however, gearing up for the change. Following are the major challenging areas that are acting as the speed breakers:
Lack Of Comprehensive Planning
Strategizing the transformation process is the step to start with. Establishing a clear vision and a phase-wise roadmap is essential to help manufacturing entities adopt technology faster. Too many companies are implementing too much technology without a plan that ultimately fails to create enough value in the long run. This is a massive waste of time, money, and resources. Instead, creating an ROI blueprint and demonstrating use cases priority-wise would add to organizational health, helping in holistic growth.
IT Infrastructure
Often even with a strategy in place, a company digress from the concern areas for the lack of technological backup and infrastructure. Right after setting clear goals and identifying the roadmap, the next thing to consider is the technology stack and ecosystem on which the organization is operating. Secure, comprehensive, scalable, and an analytics-based tech framework will be a booster for seamless adoption.
Employee Competencies
As much as manufacturers are enthusiastic about going for a technology overhaul, it is equally essential to prepare their workforce for the change. Not every employee will be tech-savvy and share the same level of understanding. Forming better partnerships, conducting training programs, continuous upskilling, and reskilling would help companies overcome this roadblock.
Governance & Security
Every technological move is based on a certain degree of compliance. Often there are strict guidelines that slow down the pace of implementation and integration. For instance, cloud-based technology must be GD/PR compliant and meet all the regulatory standards before integration.After all, confidential and vulnerable data sharing takes place at every level, and the matter of privacy in this regard is of prime importance.
Pilot Purgatory
All the above processes are time-consuming, and even everything is at its place, organizations conduct pilots before rolling out the innovations. Often things get stuck right after the pilots, and a movement from there on becomes a challenge.
Mobilizing the organization and following the top-down approach for driving transformation might be a practical move. Decentralized decision-making where decisions happen at every level might help to accelerate and turn your factory into the factory of the future.
Challenges in Building Connected Factories
Challenges in Building Connected Factories

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Examples of Connected Factories
AI, robotics, and automation have been popular in industrial manufacturing for decades. However, there has been a significant technological disruption in the past year. A new wave of opportunities could be spotted, reducing the cost of technology integrations, growing functionalities, and expanding environments in which these new-age technologies could thrive effectively. Let's see how two major manufacturing industries are using technology to establish Connected Factories.
Automotive and Aerospace Manufacturing
Not just the top-notch IT houses, Boeing is also turning to digital manufacturing for better innovations, reduced shipping costs, and a quick go-to-market. A digital record system helps trace parts that are used on other planes, refurbished and put on another plane. Digital tools allow an effective field-force optimization scheduling and managing repair and maintenance of field personnel. Automated decision-making with advanced warehouse maintenance reduces costs and ups the inventory levels. Digital records are maintained to improve 'first-time performance.' The utilization of 3D printing for low-volume serial parts allows for last-minute deliveries and minimizes inventory. Manufacturers can predict ancillary failures, reducing maintenance and on-ground repair cost. Digital assets for maintenance like instructions, e-mails, and manuals are created for compliance purposes and easy reference guides. High-speed flight data transference enabling faster decisions and dispatch of schedules, list of components, repair histories, and tail numbers. Automation of receiving, storing, and deploying solutions improving productivity. Predictive supply chain enabling inventory replenishment, delivery time lags, and prepare accordingly.
Cement Manufacturing
Cement factories consist of aggressive activities and the movement of pieces. At the fundamental level, predictive maintenance brings all together. Vibration analysis monitors assemblies in kiln drives, crushers, screens, conveyor belts, raw mills, separators, and blowers. Potential faults are predicted, and real-time anomaly detection helps in successfully diagnose the manufacturing systems. Many cement manufacturers over-deliver on their SLA quality due to the inability to track a batch's quality. Deploying neural network soft sensors and kiln activity monitoring accurately predicts a batch's quality mapping the best and worst-case scenarios as the cement industry goes through a paradigm shift and moves to a greener Cement 4.0 phase with the adaptation of condition monitoring sensors with real-time predictive analytics optimizing Yield, Energy and Throughput performance from Mines to Mills.
The Future of Connected Factories
This is the starting point of Industry 4.0 and the inception of the concept of Connected Factories. Succeeding in Industry 4.0 and digitalization is more than just about having the right IT tools. Strategizing this transformation is of utmost importance for better efficacy. To successfully run a Connected Factory, connectivity, intelligence, and flexible automation must be ensured across multiple verticals of manufacturing and supply chain distribution.
Connected Factories are the new future of the manufacturing industry. Not all can be integrated at once. However, deploying technology in a phased manner would help manufacturers to develop the factory of the future.
Therefore, the three essential principles to consider while aiming towards a future of "Connected Factories": Consider scalability by charting a value-backward plan instead of technology forward. Focusing on crucial value drivers would lead to faster implementation of the Industry 4.0 vision. Be people-centric and gear them up to identify, innovate and deploy tools that add to the production capabilities. Build a well-informed workforce who knows about your product, plan, and way forward. Innovate an integrated technology stack to enable operations according to locations before aiming for global scalability. All in all, plan, product, and people will pave the future for the Connected Factories with ease.
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