HomeInternet of Things (IoT)Study: Smart factories would add $500B in annual economic value

Study: Smart factories would add $500B in annual economic value

Manufacturers expect 21% of their plants will be smart factories by the end of 2022

Manufacturers expect that their investments in smart factories will drive a 27% increase in manufacturing efficiency over the next five years, which would add $500 billion in annual added value to the global economy, according to a recent report by Capgemini, a French company that specializes in consulting, technology and outsourcing services.

According to the research from Capgemini’s Digital Transformation Institute, a smart factories make use of digital technologies including the internet of things (IoT), big data analytics, artificial intelligence and advanced robotics to increase productivity, quality and flexibility. Smart factories include collaborative robots, workers using augmented reality components and machines that send alerts when they need maintenance.

By the end of 2022, manufacturers expect that 21% of their plants will be smart factories, according to the report. The sectors which are expected to lead the transition to smart factories are aerospace and defense as well as industrial manufacturing and automotive.

Capgemini found that a result of productivity, efficiency and flexibility improvements, smart factories will benefit from significant reductions in operating costs. For example, the report estimates that the average automotive manufacturer could drive up to a 36% improvement in operating margin through improved logistics and material costs, equipment effectiveness and improved production quality.

Early-adopters, including factories in the U.S and Western Europe are leading the pack; half of respondents in the US, France, Germany and the UK have already implemented smart factories as opposed to 28% in India and 25% in China.

The study also showed that more than half (56%) of those surveyed have invested $100 million or more in smart factory initiatives over the past five years and 20% have invested $500 million or more.

“This study makes it clear that we are now in the digital industrial revolution. The impact on overall efficiency will be profound,” said Jean-Pierre Petit, Global Head of Digital Manufacturing at Capgemini. “The next few years will be critical as manufacturers and their competitors step up their digital capabilities and accelerate their digital outcomes to maximize company benefits.”

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