This concept talks about two kinds of factories which are services and manufacturing by utilizing the 4M postulation, which are man, machine, method, and material. This helps in ideating the hypothesis of factories, as a place that processes raw material through manual labor or automation by following a procedure, thus generating an output that can be offered to a business or a company, or a consumer.
With the technological advancements, the manufacturing industry is going through a revolution, through the adoption of digitalization.
"This is giving rise to Industry 4.0 revolution.”
The Industry 4.0 revolution shines a light on a wide array of technologies such as IoT, AIML, Digital twin, cloud, AR/VR, Mobile, 5G/6G, 3D printing, Robotics, and Cognitive science. The adoption of digitization in the manufacturing industry is giving rise to a complex procedure to be followed by the companies. Digitalizing the manufacturing industry can also be termed as the digital transformation, which holds the key for growth and sustainability in the long run. Along with it, the companies that are getting accustomed to the process of digital transformation will win brownie points until other competitors start running on the sidelines.
Moving ahead, if we look at the smart factories, the idea captures the gigantic operations of the factory along with the advanced technologies included therein. Based on the available data of market and sales, economics, service, quality, and history, a smart factory, shall be able to make decisions, execute them and control those decisions, and then only it can be fitted into the box of intelligence.
"Digital Transformation shall enable a factory to become a smart factory ”
Volume and Variety
The manufacturing industries have gone through a lot of changes in the past years, based on the behavioral changes of the consumer by providing personalized products. Some of the big platforms such as google, amazon, uber, and Facebook have already won the race in thisarena. Further, all the industries are being hit by this behavior change of the consumers. According to the predictions, this shall trigger a big change in "Agility in Production" for the next 10-15 years.
Coming to manufacturing factories, the primary pillars of operations stand tall on the 4 delivery strategies which are
"MTS (Made to stock), ATO (Assemble to order), MTO (Make to order), and ETO (Engineer to order).”
Volume and variety play an important role in choosing the appropriate strategy. With the changes in consumer behavior, companies should pick out strategies of ATO or MTO due to the consumer cycle time and the consumer waiting lead period. All those companies, which are working at the component level, might base their strategies around MTS. These companies can be put under the spectrum of complete automation.
The factories which base their operations on agility will need to take a look at the supply and demand in the market. The reason being, consideration of the optimized utilization of resources, thereby giving rise to cost-effectiveness. If the production planning is being carried out, the companies will be equipped in a better way to strike a balance in providing a return on capital employed (ROCE). Unfortunately, the majority of the agile factories are involved in manual planning.
Excel solver is an excellent program that helps in identifying an optimized solution through the provision of a parameter along with certain constraints. For an instance, if we take 3-5 product variants, along with the demand and cost in the market, and then run the solver for higher revenue, and contribution margin, max market fulfillment can be acquired. All in all, it’s just a simple mathematical solution. Soon, this algorithm must be built considering the complex variants, especially counting in the production process.
What is envisioned
Once Industry 4.0 comes into play, the idea of smart factories will be able to integrate and collaborate the manufacturing systems to give rise to optimizable, adaptable, and flexible production operations. It's like taking a step forward from the fully automated smart factory towards a flexible system.