The fourth industrial revolution has brought about significant changes in Manufacturing. Smart Factories become an inevitable transformation as this domain witnesses the integration of emerging technologies into the factory floor, such as the Internet of Things (IoT), Artificial Intelligence (AI), and Robotic Process Automation (RPA). 

In 2021, this concept prevails with more new advancements that manufacturers need to take into consideration.

Quick introduction of Smart Factory


According to Deloitte, Smart Factory is a flexible system that can self-optimize performance across a broader network, self-adapt to and learn from new conditions in real or near-real time, and autonomously run entire production processes. 

One important note to take here is that Smart Factory is a guideline. There are no two identical systems due to the diversity of stakeholders and each factory’s specific needs. Thus, manufacturers should consider this concept as a guideline to refer, reflect, and improve according to each particular factory condition.

Smart Factory as a part of Digital Supply Network

Smart Factory is not a separate and independent concept. In fact, it is a component in the Digital Supply Network, an advanced model developed from the traditional supply chains.

In the Digital Supply Network, an interconnected system, like a spider web, with digital at the core will replace the linear and sequential process. Overall, as an essential part of this network, a Smart Factory possesses five signature traits: 


This may be the most important feature of a smart factory. Information and insights in the smart factory will connect with other parts of the Digital Supply Chain Network. Besides, the internal data usage is also tightened. Particularly, in a smart factory, new statistics, along with the old figures can conduct more comprehensive analyses, helping managers gain actionable insights and make better decisions. Improved feedback system in Connected Customers also enables suppliers to make quicker adjustments at the plants. 


This feature enables a smart factory to function with minimal manual intervention. Taking digital at the core, a smart factory had better production planning and assets controlling with a high level of automation, increasing asset uptime, operation efficiency, and reducing cost significantly. 


Data such as order details, operational statistics, and all other indicators are recorded instantly among a smart factory and the whole network. The operators can monitor and respond promptly to the collected metrics and feedback. As a result, this transparency helps companies make more timely decisions with the support of such tools as role-based views, real-time notifications, and real-time tracking/ monitoring. 


As a result of the continual loop of analysis and adjustments, the system itself collects historical databases to anticipate possible issues and solutions. For instance, it can identify abnormal operations, automotive restocking replenishment, quality issues prediction, et cetera.


Smart factory is able to adapt to changes flexibly and smoothly with minimum intervention. Manufacturers can configure needed adjustments in the operation process, monitor changes, and validate the upgrade efficiencies.

Smart Factories remain their importance and potential in the future.

The potential benefits Smart Factory can offer are so promising that corporations can ignore it in the time of Industry 4.0. According to Deloitte Insights, it can:

  • Increase asset efficiency
  • Better quality control
  • Lower production cost
  • Increase safety and sustainability

Going “smart” seems inevitable for manufacturers. However, as mentioned earlier, Smart Factory is a guideline for factories to base on and take what is appropriate for the individual needs. To transit from the current situation to the smart factory, manufacturers can consider certain aspects of the system to initiate changes.

Smart Factories movements in 2021

Deloitte Insight points out four main areas that need consideration for transforming a smart factory: 

  • Data and algorithms
  • Technology
  • Process and governance
  • Human resources

In 2021, some specific points rise to concern and more importance. Keith Higgins, Vice President of Digital Transformation at Rockwell Automation, shared three key aspects that need special consideration in 2021 via Industry Today:

Data and algorithms: enhance IT/OT integration

To facilitate smart factories ’ better and faster data analysis, Digidomica suggests employing the Industrial Internet of Things (IIoT). IIoT is the combination of IT (intelligent technology) and OT (operational technology). It enables decision-makers to approach data streams with highly visualized and contextualized illustrations in real-time.

These elements are increasingly important when the production system is geographically fragmented, coupled with the pandemic Covid-19 is not yet eliminated. 

According to Industry today, IIoT generates 1.44 billion data points per plant within a day. Previously, data was gathered from scattered sources, which involved lots of manual efforts.

Currently, data has been automated, collected, refined, and contextually analyzed with OT (operational technology) and then connected to a more extensive network thanks to IT (intelligent technology). IT/OT convergence is estimated to fulfill the &77 billion need for IIoT, noted by Industry today.

Technology: incorporate Edge Computing

The ability to handle a large amount of data intake, processes, and analysis in real-time is a big part of smart factory operation. Cloud storage alone is hardly capable of handling this progress. Thus, the integration of edge computing is advisable. Thanks to it, we can partly process data outside the centralized data center or cloud. Then, only the refined parts are delivered to the center.

This system enhances the data processing speed. Gartner estimates that 75% of data will be handled by this new approach by 2025. Frost & Sullivan predicts that by 2022, around 90% of industrial companies will resort to Edge Computing.

Technology: reduce costs by using Digital Twin

According to Keith Higgins, Vice President of Digital Transformation at Rockwell Automation, Digital Twins is an effective tool to enhance three important elements of a manufacturing factory: 

  • Quality control
  • Performance prediction
  • Staff training

The data repository of smart factories can further facilitate capabilities in creating accurate avatars for the assets. In 2018 Gartner estimated that the technology would save up to 1 trillion each year in asset maintenance. As a result of its outstanding benefit of manufacturer cost by in advance test run and stimulation, Digital Twin is gaining a lot of popularity. In 2021, 30% of Global 2000 companies may use Digital Twin, according to IDC.

Read more:
Digital Twin Series Part 1: How Digital Twin help improve warehouse management
Digital Twin Series Part 2: Digital Twin Application in Shipments

Dynamic Virtual Marketplace For Mechanical Part Trading

Smart factory transformation can help manufacturers to create differentiation, have advanced effectiveness and efficiency in an ever-more complex and rapidly developing business ecosystem. We hope that this article provides you with sufficient information for your first steps in turning your plants into smart factories in 2021 and furthermore.