How to Build the Factory of the Future

Manufacturing needs change. Today, black swan events have wrought havoc on global supply chains.  The COVID-19 pandemic and response have caused disruptions, delays, increasing costs, and an atmosphere of anxiety about the future.  Despite the chaotic world surrounding them, manufacturers are under constant pressure to fill orders quickly, maximize quality and efficiency simultaneously, and improve working standards while reducing costs and increasing production complexity.  The current model is insufficient for meeting all these needs given the world we occupy today.

Thanks to the newest technology, manufacturing has the tools they need to adapt to future disruption.  Efficiency and sustainability can be increased by digitization with new technologies like artificial intelligence and the Internet of Things driving change.  End to end visibility cuts waste, non-value activity, and byproducts.  Predictive maintenance reduces disruption and environmental impact.  The benefit of adaptable technology and equipment is that it can be easily reconfigured to accommodate new products and changes.  AI-powered product demand simulations can help businesses determine how to scale production to optimize efficiency and agility.  With new technology comes new workforce demands; a versatile workforce is required to interpret data and work in virtualized or augmented reality environments. 

Equally important to improving operations in future factories is improving sustainability.  Rethinking manufacturing, production, and distribution could eliminate 45% of global emissions.  Manufacturing alone represents 20% of global emissions; major changes to the sector would have a dramatic impact on the global trajectory towards warming.  If just 5 areas of manufacturing improved, emissions would fall by an amount equal to the elimination of all transportation.  From a business perspective, responsible waste management reduces costs.  Efforts to increase sustainability drive innovation while bolstering company image.  Green processes can also ensure regulatory requirements are met preemptively; most businesses would prefer to set their own schedule instead of letting a government impose one on them. 

Outside the factory doors, manufacturers need to do just as much reimagining as they did inside them.  A major problem of the COVID-19 pandemic is its impact on supply chains.  Lockdowns in one country prevent intermediate goods from reaching another, causing ripple effects across the global economy.  To avoid similar problems from happening in the future, companies should switch from single source suppliers to creating a value network.  While single suppliers are available at a lower cost, value networks have more resilience and flexibility available to them.  Future factories need to leverage advanced planning and scheduling to plan for disruptions and ensure their network is able to bounce back from challenges.

In 2018, just 12% of companies had a mature factory of the future plan.  Now that recent events have revealed the need for such planning, that percentage should increase rapidly over the coming months.  Starting one’s transformation journey doesn’t have to be hard.  There are 4 steps: evaluate disruption opportunities, determine your company’s maturity, plan and execute your strategy, and drive transformation success.  Transformation depends on people, processes, and technology.  Neglecting one threatens the success of all three factors. The future is now.