What Is Smart Manufacturing and Why We Care

IDC Smart Mfg Info Graphic

[Updated: 1/28/15]

Last week I attended the board meeting of the Smart Manufacturing Leadership Coalition. Sometimes I’m an idealist working with organizations that I think have the potential to make things better for engineers, managers, and manufacturers in general. I derive no income from them, but sometimes you need to give back to the cause. SMLC is one of those organizations. MESA, OMAC, ISA, CSIA, and MIMOSA are other organizations that I’ve either given a platform to or to whom I have dedicated many hours to help get their message out.

In the area of weird coincidence, just as I was preparing to leave the SMLC meeting there came across my computer a press release from an analyst firm called IDC IDC Manufacturing Insights also about smart manufacturing. This British firm that is establishing an American foothold first came to my attention several years ago with a research report on adoption of fieldbuses.

The model is the “Why, What, Who, and How of Smart Manufacturing.” See the image for more information. I find this model interesting. As a student of philosophy, I’m intrigued by the four-part Yin-Yang motif. But as a manufacturing model, I find it somewhat lacking.

IDC insight

According to Robert Parker, group vice president at IDC Manufacturing Insights, “Smart manufacturing programs can deliver financial benefits that are tangible and auditable. More importantly, smart manufacturing transitions the production function from one that is capacity centric to one that is capability centric — able to serve global markets and discerning customers.” A new IDC Manufacturing Insights report, IDC PlanScape: Smart Manufacturing – The Path to the Future Factory (Doc #MI253612), uses the IDC PlanScape methodology to provide the framework for a business strategy related to investment in smart manufacturing.

Parker continues, “Smart manufacturing programs can deliver financial benefits that are tangible and auditable. More importantly, smart manufacturing transitions the production function from one that is capacity centric to one that is capability centric — able to serve global markets and discerning customers.”

The press release adds, “At its core, smart manufacturing is the convergence of data acquisition, analytics, and automated control to improve the overall effectiveness of a company’s factory network.”

Smart manufacturing

This “smart” term is getting thrown around quite a bit. A group of people from academia, manufacturing, and suppliers began discussing “smart manufacturing” in 2010 and incorporated the “Smart Manufacturing Leadership Coalition” in 2012. I attended a meeting for the first time in early 2013.

Early on, SMLC agreed that “the next step change in U.S. manufacturing productivity would come from a broader use of modeling and simulation technology throughout the manufacturing process”.

Another group, this one from Germany with the sponsorship of the German Federal government, is known as Industry 4.0, or the 4th generation of industry. At times its spokespeople discuss the “smart factory.” This group is also investigating the use of modeling and simulation. However, the two groups take somewhat different paths to, hopefully, a similar destination—more effective and profitable manufacturing systems.

Key findings from IDC:

  • Use the overall equipment effectiveness (OEE) equation to understand the potential benefits, and tie those benefits to financial metrics such as revenue, costs, and asset levels to justify investment.
  • Broaden the OEE beyond individual pieces of equipment to look at the overall impact on product lines, factories, and the whole network of production facilities.
  • Technology investment can be separated into capabilities related to connectivity, data acquisition, analytics, and actuation.
  • A unifying architecture is required to bring the technology pieces together.
  • Move toward an integrated governance model that incorporates both operation technology (OT) and information technology (IT) resources.
  • Choose an investment cadence based on the level of executive support for smart manufacturing.

Gary’s view

I’ve told you my affiliations, although I am not a spokesman for any of them. Any views are my own.

So, here is my take on this report. This is not meant to blast IDC. They have developed a model that they can take to clients to discuss manufacturing strategies. I’m sure that some good would come out of that—at least if executives at the company take the direction seriously and actually back good manufacturing. However, the ideas started my thought process.

Following are some ideas that I’ve worked with and developed over the past few years.

  • To begin (picky point), I wish they had picked another name in order to avoid confusion over what “smart manufacturing” is.
  • While there are a lot of good points within their model, I’d suggest looking beyond just OEE. That is a nice metric, but it is often too open to vagaries in definition and data collection at the source.
  • Many companies, indeed, are working toward that IT/OT convergence—and much has been done. Cisco, for example, partners with many automation suppliers.
  • SMLC is working on a comprehensive framework and platform (also check out the Smart Manufacturing blog). Meanwhile, I’d also reference the work of MIMOSA (OpenO&M and the Oil & Gas Interoperability Pilot see here and here).
  • I’d suggest that IDC take a look into modeling, simulation, and cyber-physical systems. There is also much work being done on “systems of systems” that bring in standards and systems that already exist to a higher order system.

I have not built a model, but I’d look carefully into dataflows and workflows. Can we use standards that already exist to move data from design to operations and maintenance? Can we define workflows—even going outside the plant into the supply chain? Several companies are doing some really good work on analytics and visualization that must be incorporated.

The future looks to be comprised of building models from the immense amounts of data we’re collecting and then simulating scenarios before applying new strategies. Then iterating. So, I’d propose companies thinking about their larger processes (ISA 95 can be a great start) and start building.

These thoughts are a main theme of this blog. Look for more developments in future posts.

IDC Manufacturing 2015 Predictions Web Conference

IDC Manufacturing 2015 Predictions Web Conference

GaryThumb14Here is a learning opportunity.

International Data Corporation (IDC) will host the IDC FutureScape: Worldwide Manufacturing 2015 Predictions on Thursday, December 4th at 10:00 a.m. US Eastern time. IDC’s annual Predictions Web conference series features an accompanying IDC FutureScape report, part of the newly launched IDC DecisionScape portfolio of decision-making methodologies. The new reports are designed to help technology professionals in their strategic IT planning efforts. The Web conference will feature the following IDC Manufacturing Insights analysts: Robert Parker, Simon Ellis, Kimberly Knickle, Jeff Hojlo, Christopher Holmes, Lorenzo Veronesi, Heather Ashton, and Marc Van Herreweghe.

Click to register.

The Webcast will focus on ten critical decisions that executives and decision makers within manufacturing need to consider in the next 36 months to be leaders in the industry.

  • Specific details regarding how manufacturers will actively channel of their IT budgets through industry clouds that enable seamless and flexible collaboration models.
  • Guidance on how manufacturers will invest substantially in increasing the visibility and analysis of information exchange and business processes, within the company and with partners.
  • Quantifiable measures detailing how manufacturers will explore the viability of micro logistics networks to enable the promise of accelerated delivery for select products and customers.

“IDC Manufacturing Insights sees a number of important industry drivers that will shape the manufacturing industry for the next few years, including complex value chains, support for continuing emerging market growth, customer (and consumer) centricity, ubiquitous connectivity, and data-driven insights. These drivers inform the ten decision imperatives for 2015 and beyond,” said Simon Ellis, Practice Director at IDC Manufacturing Insights.

The IDC FutureScape report that this Web conference is based on will be published and available within 24 hours of the event.

Visit the IDC Manufacturing Insights Community.

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