Today, it seems, data is everywhere. A simple trip to the store can generate huge amounts of data. The phone in your pocket tracks your location and, based on your shopping history, can predict or recommend products to you. The car you drive collects information about the vehicles around it to enable autonomous functions such as brake assist or adaptive cruise control. The store itself tracks purchase data through the point-of-sale systems and can identify you and your past purchases based on an app or your loyalty card. And the credit card you pay with knows your entire payment history. Each day, it feels as though more and more of the world is connected and collecting data.

Data is the new currency, and in many ways, it can be even more valuable. IDC predicts that in the year 2025, 163 zettabytes, or 163 trillion gigabytes, of data will be produced worldwide. As manufacturers undergo digital transformation and invest in new technologies, data will become critical to their success as well. With smart manufacturing, companies will finally be able to achieve total visibility across the entire value chain. The result? A dramatic shift in the way you do business.

What is Smart Manufacturing?

The National Institute of Standards and Technology (NIST), defines smart manufacturing as:

“Systems that are fully-integrated, collaborative manufacturing systems that respond in real time to meet changing demands and conditions in the factory, in the supply network, and in customer needs.”

At its core, smart manufacturing is all about the effective collection, analysis, and use of data. It is, in essence, manufacturing’s answer to the data revolution occurring in so many other industries. It is about contextualizing the data that you have and using it to make stronger, faster, and more informed decisions. It can be used to identify new opportunities and can even result in new business models and ways of doing things.

Today’s Data is Wasted

More data will be produced as manufacturers continue to implement new technologies into their factories. However, without the right systems in place, this data will be useless. It’s not enough to collect data. It must be turned into real, actionable insights for it to have an impact. The World Economic Forum estimates that 70 percent of the data captured by manufacturers goes unused – a huge missed opportunity.

Consider how manufacturing companies handle data today. In many cases, manual or even paper processes are used. When digital systems are in place, data is decentralized and only accessible to a few people. The organization is extremely siloed, and the flow of data across departments or the value chain is limited. Each stage of the manufacturing process operates in its own silo, meaning they have a very limited ability to see the full picture.

This lack of visibility ends up costing manufacturers in both time and money. It also makes them less competitive and less prepared for the future.

Turning Data into Actionable Insights – How Smart Manufacturing is Different

Smart manufacturing is overcoming these challenges and creating new opportunities for future growth. When properly implemented, data is collected from all sources and sent to a centralized repository. There, advanced analytics software can take this data and turn it into actionable business insights that were simply not possible before. Individuals at all stages of the manufacturing process can view the data and apply it to their decision-making.

The benefits to this are clear. Instead of struggling with manual processes and data silos, manufacturers can create an open environment that makes data available whenever, wherever, and to whoever it is needed. This can make the business more agile and responsive, increase efficiency, lower costs, open up new revenue opportunities, reduce waste, and even increase worker safety.

For example, imagine the benefits if suppliers could view the demand forecast developed by marketing. They’d be able to more accurately deliver the right quantity of materials and components at the right time. Transportation and logistics would be able to track their entire fleet and know which products were on which vehicles, mitigating the risk of shortages. Supervisors on the floor could get real-time productivity updates sent to them directly on a mobile device. And technicians could identify minor equipment problems and pre-emptively repair them before they became full-scale emergencies, reducing downtime and maintenance costs.

Data Isn’t Everything

Big data is valuable, but it’s not enough to simply collect it and hope for the best. Companies that excel at smart manufacturing will have a clear understanding of their business and their strategy for the future.

The technologies that power digital transformation will look different depending on the objectives and goals you’re trying to accomplish, but a few in particular will play the biggest role. Primarily, manufacturers will invest an estimated $123.89 billion in the Industrial Internet of Things (IIoT) by 2021. IIoT is a network of intelligent computers, sensors, devices, and equipment that will collect and share huge amounts of data from all aspects of the manufacturing process.

Using that data will require advanced software analytics, machine learning and artificial intelligence to sort, filter, and interpret the numbers to find meaningful insights. And technologies such as additive manufacturing or advanced robotics will be crucial to applying these insights and using them to implement organizational, operational, and business model innovations that transform how goods are produced.

Data is behind all these opportunities, and smart manufacturing is just one of the areas you need to consider as you undergo a digital transformation. To learn more about digital transformation and the technology that is powering it, download our latest whitepaper: Industry 4.0 and Digital Transformation in Manufacturing.

Remember, digital transformation is about more than new technology – it is about seeing new ways to do business. Contact Optimized Solutions to define your business model, understand how you are making money today, and anticipate how your business would be different in the digital economy of tomorrow.