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What benefits are stated for Smart Manufacturing?

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Why should you go for Smart Manufacturing? Is it just the latest trend or is it beneficial in terms of revenue generation to turn the traditional manufacturing industry into a Smart Manufacturing industry?

Cost has always been the major factor in the production or manufacturing of goods. Lower the cost of manufacturing, the cost can be controlled at the end of the product. The countries like Greater China, Mexico, Vietnam has always been targeted for cheap labor cost but low flexibility, unstable supply chains or even poor quality standards have raised the emergence to look for other solutions.

Smart Manufacturing helps in shortening the time taken in the end process of the supply chain. It also shifted the market from mass production to customize production.

Examples of a few companies are:-

Adidas – The company opened two automated speed factories in Germany in 2015, and in Atlanta, Georgia in 2018 to speed up the delivery process. The company had its manufacturing shop in Vietnam. However, the delivery of a new trend of shoes took 18 months to approach the targeted months. Doesn’t make any sense. The former CEO of Adidas, considers smart manufacturing to take the production model on a more customized level and deliver the shoes sooner than expected.

Nike- The company is shifting its product from eastern countries. It has partnered with a U.S.-based manufacturer, Flextronics International for more automated and customized solutions. The company is also partnered with Belgium-based European Logistics Campus to “accelerate the company’s drive toward the supply chain of the future.”

Definitely, with on-time delivery, customization of the products will see a huge trend and it will uplift the market. The shift of the market is a loss to eastern countries.

Since the production will be at a higher speed, how much the end products will have the same value as it was before, is Questionable. The business market is competitive and it is tough for any player to sustain long if the criteria such as the cost and delivering the manufactured product on time are not met.

The smart factory even though enables customization and also addresses the larger mass to buy products at a cheaper rate even if it is not manufactured in eastern countries. The situation toughens up with low-wage jobs being replaced too fast with smart factory equipment or machines.

Source:- Hannover Messe, Harvard Business Review

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