Smart Manufacturing: 5 Factors That Make Your Factory Smart!

Smart Manufacturing

The manufacturing industry has been changing rapidly, aided by the newest software systems and machinery. Consumers continue to demand customized products, adding to the challenge of low-cost production.

Manufacturers have been forced to look hard at their production methods, labor costs, and transportation expenses, among numerous other areas throughout the organization. This focus has resulted in the emergence of smart factories in which machines and software share information and collaborate as never before.

Smart manufacturing consists of smart machines within a smart factory, collaborating in a network of other smart factories, and administered by one “brain”, considering every facet of production – including the workload of each plant, transportation costs, availability, raw material costs, and delivery dates.

These smart factories connect digitally and physically to support the entire production process, including supply chain management, manufacturing tooling, and the workers on the shop floor.

Here are five factors that define today’s smart factory. Do these describe your organization?

1.    You’re generating action-oriented data

Leveraging data is the basis for a smart factory, and most factories proceed through various stages of data structure as they transition to smart manufacturing. In the early stages, the available data is not accessible and must be analyzed using time-consuming manual methods that provide little opportunity for production improvement.

Data is essentially organized and sorted in one location during the next stage. Other systems help visualize the data and display it on dashboards. Although the factory can now perform proactive analysis, it still requires extra time and effort.

Eventually, the data becomes active, meaning the data itself performs proactive analysis using machine learning and artificial intelligence to gain insights with little human supervision. The system spots critical issues and irregularities to predict failures, and it informs essential personnel, giving vital real-time information.

Smart factories have arrived at the action-oriented-data stage when machine learning is generating actionable solutions for the issues that have been identified. The machines and devices connected to the system execute those changes without human input.

2.    Intelligent machines populate your factory floor

Intelligent machines communicate with software systems throughout the company, reporting their status, including the machine’s condition and what is being produced on them. Intelligent machines do not wait to be told what to do by external systems. Instead, they are part of the decision-making process, sometimes requesting additional information, other times making the decision.

Smart factories measure their machinery’s performance, availability, and quality because these determine overall equipment effectiveness (OEE). An OEE score of 100% means you are manufacturing with 100% quality, 100% performance, and 100% availability.

Whatever the age of their equipment, smart factories keep them running the best they can. Intelligent machines with smart sensors give manufacturers real-time data on the machine’s health, status, and possible issues. When intelligent sensors are combined with data analytics, they provide valuable information for manufacturing operations. Smart sensors help manufacturers reduce equipment failures and improve the machine’s performance.

3.    Your workforce has the right skillsets

No matter how smart factories become, people will always be essential in their success. Smart factories employ workers with the skillsets to collaborate with intelligent machines to increase productivity and efficiency. Manufacturers help their employees develop the proper skills to get the most from advanced technologies.

Transitioning to digitalization often results in changes in the human resources structure. Some jobs are eliminated with the addition of robotics, while others require the development of new abilities to take advantage of the latest technologies. Due to that, new roles may occur. 

Smart manufacturers cannot afford to support an under-skilled workforce, so workers at every level of the organization must learn quickly, become versatile, and be flexible to perform in cross-functional roles.

Today’s smart factory employees will have the technical knowledge that covers automation, data, and intelligent machines, making collaboration in these areas possible while increasing productivity and efficiency.

4.    Supply chain management is a priority

Everything that transpires within a successful smart factory must link with what’s happening across the entire supply chain network. Because of this, the old-style linear supply chain operations have been replaced by an interconnected system of supply operations.

Smart factories use technology to increase productivity and quality by combining data and insights from the shop floor with the supply chain, enabling their organization to discover ways to improve operational efficiency and business relationships.

Smart factories set up automatic optimization by connecting devices and sharing information. Intelligent machines adapt to evolving conditions in real-time, and they run the production process without human intervention.

Because information is being shared between devices and resources, the supply chain can anticipate needs and automatically order materials, which keeps the factory running at maximum efficiency and productivity, helping to reduce waste.

5.    You pay proper attention to cybersecurity 

Smart manufacturing depends on the interconnectedness among systems and machines, making it more vulnerable to leaks, unauthorized access, and maybe even sabotage. The many connection points in the system could mean a significant and extensive effect, so cybersecurity is even more essential.

Technology has boosted the expansion of supply chain operations over recent years. With more companies transitioning to the digital world, some weaknesses in cybersecurity at contact points with suppliers, manufacturers, partners, and other service providers are becoming evident.

Also, the increase in supply chain cyber threats in the aftermath of COVID-19 makes cyber security much more critical than before. Supply chain breaches present a substantial risk to businesses, potentially interfering with operations and damaging their reputations. 


Smart manufacturing provides numerous opportunities for organizations to maximize productivity and propel innovation. However, upgrading machines, retraining workers, and setting up secure systems may be cost-prohibitive for some manufacturers.  

Deciding to transition to a smart factory should come through input from all areas of the organization. In the end, it must be determined from an accurate assessment of whether it makes sense for your specific facility or business model.


Eric Whitley

For over 30 years, Eric Whitley has been a noteworthy leader in the manufacturing space. In addition to the many publications and articles Eric has written on various manufacturing topics, you may know him from his efforts leading the Total Productive Maintenance effort at Autoliv ASP or from his involvement in the Management Certification programs at The Ohio State University, where he served as an adjunct faculty member.  

After an extensive career as a reliability and business improvement consultant, Eric joined L2L, where he currently serves as the Director of Smart Manufacturing. His role in this position is to help clients learn and implement L2L’s pragmatic and simple approach to corporate digital transformation.   

Eric lives with his wife of 35 years in Northern Utah. When Eric is not working, he can usually be found on the water with a fishing rod in his hands. 

Smart Manufacturing article and permission to publish here provided by Eric Whitley. Originally written for Supply Chain Game Changer and published on May 5, 2022. 

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