5 Benefits of Shifting to Smart Manufacturing

By: John Barcus, Vice President, Oracle Manufacturing 

Manufacturers are adopting smart technologies to improve efficiencies in their factories. But many companies are stuck in the early stages of adoption. They often discover that initiating a smart-manufacturing project is labor-intensive, time-consuming and costly. A common hurdle manufacturers encounter is the integration of multiple technologies. 

Cloud applications help manufacturers reduce costs related to these challenges and shorten project timelines. In the following sections, we’ll take a closer look at how smart technologies are increasing opportunities for manufacturers and best practices for efficient implementations. 

The Smart Factory Opportunity 

In the next five years, smart factories may contribute as much as $500 billion in added value to the global economy, according to Capgemini’s Digital Transformation Institute. The reason: Smart factories can produce more with lower costs, according to a recent report. In fact, manufacturers expect smart technologies to drive a sevenfold increase in annual efficiency gains by 2022. Some industries can expect to nearly double their operating profit and margin with smart technologies. 

Smart factories increase output, quality, and consistency. Additional benefits include: 

Streamlined and automated data: Smart technologies automate data collection and provide advanced production analytics, so managers can make more informed decisions. In a smart operating environment, manufacturers can tie their operations technology with business systems to measure their key performance indicators against business goals. 

Predictive maintenance: With better visibility, manufacturers can predict and resolve maintenance issues before they lead to downtime or product-quality issues. For example, sensors affixed to machines or devices may send condition-monitoring or repair data in real time, so manufacturers can identify problems more efficiently. 

Significant cost reductions: Manufacturers can identify waste and increase forecast accuracy when their operations and enterprise systems are connected. They have better insight into supply chain issues, such as inventory levels and delivery status, as well as demand cycles. With this information, they can reduce costs related to excessive inventory or unexpected production volume. 

Reduce workforce challenges: Automation helps manufacturers launch and complete projects with fewer workers. Having real-time access to data across multiple platforms frees workers to focus on their core responsibilities. This allows manufacturers to innovate faster without investing in additional resources. 

Enhanced productivity: Smart, connected systems help factories improve throughput. In a connected enterprise, manufacturers have seamless visibility into bottlenecks, machine performance, and other operational inefficiencies. With this data, manufacturers can make adjustments to increase yields, improve quality, and reduce waste. 

Efficient IoT Integration and Implementation 

The smart manufacturing transformation begins with the Internet of Things (IoT). IoT-enabled devices send performance-related information via sensors over a network. During the early-adoption phase, many manufacturers struggle to build IoT applications and integrate them with disparate business applications. 

According to the previously cited survey from Capgemini’s Digital Transformation Institute, digitally mature manufacturers apply the following best practices to overcome these challenges: 

• 85% say they hire consulting firms to help build a business case and roadmap 
• 67% say they partner with technology providers for feasibility studies 
• 63% use end-to-end technology solutions 

One of the ways Oracle is helping manufacturers address the integration challenge is through a partnership it formed with Mitsubishi Electric. The companies are providing manufacturers with an open platform for developing IoT applications that integrate seamlessly with Oracle cloud apps. 

IoT apps developed on the Mitsubishi Electric FA-IT Open Platform collect data from factory equipment for visualization and analysis. Oracle IoT Cloud, which is designed to integrate with other Oracle cloud-based business systems, receives this information from these IoT apps in real time. 

“Mitsubishi Electric’s new FA-IT Open Platform is based on edge computing to accelerate IoT utilization for smart manufacturing,” says Toshiya Takahashi, corporate executive group senior vice president, factory automation system, Mitsubishi Electric Corporation. “By adding Oracle Cloud services to this platform, we believe that it will be possible to visualize factories and build an application development environment. To provide the platform to customers early, we will also work with partner companies, including IT companies, to develop applications utilizing the platform." 

Seek IoT Expertise to Speed the Adoption Process 

Smart technologies offer a significant competitive advantage for manufacturers. But they’re not easy to implement. Manufacturers can overcome early-adoption challenges with the help of experienced consultants. When seeking a consulting firm, it’s important to consider advisors who have significant experience helping factories transition to smart technologies. This will help cut the implementation phase and place manufacturers on the right path from the beginning. 

A do-it-yourself implementation is typically costly and time-consuming. Oracle and our partners have the experience and expertise to help manufacturers build a comprehensive cloud-based solution using an efficient, cost-effective process that delivers immediate results. Check out our latest ebook for more information. 

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