The smart factory advantage

The smart factory advantage

AVEVA’s Rob McGreevy shares why, in a rapidly changing industrial environment, digital solutions that integrate distributed manufacturing networks are essential to maintaining market leadership and driving business innovation 

Guest contributor |

American business icon Jack Welch famously said: “It’s impossible to grow long term if you can’t eat short term. Anybody can manage short. Anybody can manage long. Balancing those two things is what management is.”  

Nowhere is this classic conundrum truer than in manufacturing, where leaders must navigate many value chain variables to remain operational and successful in the short term, while working towards future opportunities for the long term. Supply chains have yet to fully return to normal after the pandemic, and geopolitical challenges and sustainability requirements continue to demand attention, but new opportunities are on the horizon. Industry 5.0 – the next phase in the evolution of manufacturing where humans work alongside intelligent machines – is unlocking numerous benefits that can help brands establish competitive advantages early on. 

Rob McGreevy

To strike the balance between short and long term, most manufacturers are turning to digital technology. A remarkable 86 per cent of manufacturing executives surveyed in Deloitte’s 2024 manufacturing outlook industry study feel smart factory solutions will be the primary drivers of competitiveness over the next five years. 

Smart factories rely on digital technologies to connect machinery, production systems and devices to provide end-to-end visibility of the entire manufacturing process. With a collaborative, real-time view of the value chain – from raw materials to finished products – manufacturers can anticipate demand fluctuations and make informed decisions about resource allocation, scheduling and capacity planning.  

For example, Schneider Electric has modernised the production of energy equipment at a 62-year-old plant at Lexington in Kentucky, USA, using an integrated solution from AVEVA and Microsoft. Teams can now access and visualise operational data, making quicker and more efficient decisions without any second guessing. Not only has manual paperwork been reduced by 90 per cent, but AVEVA software has helped improve labour productivity and reduce unplanned downtime by nearly six per cent. The World Economic Forum has recognised the plant as an Advanced Global Lighthouse for sustainable digital manufacturing, and Schneider Electric is working to replicate the model at multiple sites worldwide.  

Achieving that goal will depend on another kind of technology that is already commonplace for most enterprises. The latest connected digital solutions leverage the cloud to run application services and share data across distributed manufacturing sites. This is known as industrial intelligence as a service (IIaaS). Connect, AVEVA’s industrial intelligence platform, is one such solution.  

With over 60 offerings covering data management, engineering, operations and connectivity, Connect leverages IIaaS to create an intelligent network, where a single version of the truth is available to all stakeholders, including authorised external partners. This enables organisations to eliminate guesswork, standardise production practices and processes around the world, identify business trends, and quickly share innovations at one site across the network.  

Over the longer term, IIaaS platforms, together with artificial intelligence and machine learning applications, support proactive approaches to planning. By facilitating scenario modelling and what-if analysis, manufacturers can simulate various production scenarios and assess their potential impact on operations to capitalise on emerging opportunities and anticipate and mitigate risks. 

Automotive parts manufacturer Henn uses AVEVA Data Hub, a joint solution from AVEVA and Microsoft, to gain real-time insights into its production process. Operators use it to precisely track and trace all 550 million parts manufactured from cradle to crate across 18 assembly lines and another 420 machines at customer sites. Identifying information is collated with production and assembly process data, such as asset and environmental conditions, and made available on dashboards for internal and external stakeholders in different locations.  

With a flexible software-as-a-service-based subscription licensing model to streamline costs, the European industrial leader has been able to build a more efficient manufacturing operation and increase overall reliability. Data sharing among suppliers has delivered quality improvements too. More tangibly, reporting time has dropped from two days to two minutes, an efficiency gain of 10 per cent.  

To build on this momentum and help its car manufacturer customers protect their brands, Henn is adopting AVEVA Connect to accelerate its digital transformation and further improve future agility.  

As these examples show, connected information and insights are already helping manufacturers build more agile, resilient and sustainable operations in very fragmented and uncertain market conditions. A graduated approach to sharing these intelligent insights – first within a plant, then across a company’s network and, finally, to partners, suppliers and other entities – can set up a domino effect that can deliver returns for years to come. It’s clear that industrial intelligence is essential to balancing immediate impact with business longevity.  

Watch a video case study to learn how Schneider Electric used an integrated solution from AVEVA and Microsoft to modernise energy equipment production at plant in Kentucky, USA  

Rob McGreevy is chief product officer at AVEVA 

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