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Smart Manufacturing: Orchestrating Your Response To Changing Conditions


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  • Smart manufacturing implemented with cyber-physical systems improve operational agility and efficiency while unleashing innovation.

  • Successful smart manufacturing implementation requires alignment across your business, supply chain, and customers.

  • A smart manufacturing platform significantly increases the data that must be accurately integrated, managed, and shared quickly and distributed.


"Why ship atoms when you can transmit bits?"

Nicholas Negroponte, co-founder of the MIT Media Lab and the first investor in WIRED magazine, asked that question in his 1995 best-seller, Being Digital. At the time, Blockbuster rented videotapes (atoms) at its 9,100 stores worldwide. Today, the company is gone and Netflix, which initially mailed CDs to its customers, adapted to the market's digitalization, streams bits, and has a $223 billion valuation.

While the likelihood that your industry goes the way of videotapes is slim, the pandemic proves that massive swings in demand for your products will occur at any time. With these swings comes the need for an agile blend of digital and physical capabilities that is now a prerequisite for success.

Regardless of what you make, everything in your operation that can become digital must become digital. Only then can you transmit bits internally and externally, using cyber-physical systems to convert the bits into atoms when, where and in the quantities needed.

According to the National Institute for Standards and Technology (NIST), "Cyber-Physical Systems (CPS) comprise interacting digital, analog, physical, and human components engineered for function through integrated physics and logic. These systems will provide the foundation of our critical infrastructure, form the basis of emerging and future smart services, and improve our quality of life in many areas."1 In turn, engineering technology (ET), operational technology (OT), and information technology (IT) form CPS' foundation:

  • ET enables the design, manufacture, or purchase of the equipment and systems used within your factories

  • OT hardware and software detect or cause manufacturing adjustments through direct monitoring or control of equipment, processes, and events

  • IT software integrates the data generated by production systems into your business and financial management platforms.

But how to manage the resulting computing and storage requirements? With more than 100 million members worldwide who watch 125 million hours of TV shows and movies every day, Netflix uses Amazon Web Services (AWS) for nearly all its computing and storage needs, leveraging more than 100,000 server instances on AWS.2 Access to elastic computing assets means Netflix has turned its IT hardware requirements from capital costs to operating expenditures. While your IT needs may not be as enormous as Netflix's, a cloud infrastructure and platform service may still be necessary.

Similarly, your manufacturing equipment requirements may be met by the 3D print technology providers and printing companies who offer managed services. Clients leverage the vendors' services when they have capacity constraints, accessing the necessary production elasticity to overcome the shortfall in 3D print output. However, the worst situation is when the conditions are not anticipated, negatively impacting your customers. Smart manufacturing provides the means to synthesize your cyber-physical systems in a manner that improves your operations and alerts you to changing supply and demand factors.

What is Smart Manufacturing?

Smart manufacturing is the fusion of engineering, operational, and information technologies to collect, analyze, and present performance data for automated or human decision-making that meets changing conditions in factories, supply chains, or markets.

Factories implement smart manufacturing by employing cyber-physical technologies to improve operational agility and efficiency while unleashing innovation. The real-time data on your systems' performance analyzed with artificial intelligence (AI) techniques enables you to choreograph people, production processes, and supply chain resources. The analytics, coupled with a consolidated view across your manufacturing facilities, optimizes decision-making at home and abroad.

Flexible machinery and assembly processes enable last-minute decisions on when, where, and how many items to produce. While high volume production employing specialized machinery such as injection molding equipment will not go away, the manufacture of small quantities and customized items enabled by 3D printing is coming to the fore. For example, Heineken uses 3D printers to produce custom safety, maintenance, and quality control equipment, print spare parts, and optimize its manufacturing lines. A smart manufacturing platform highlights where you can improve your operation's efficiency, reduce costs, and respond to demand swings.

Smart Manufacturing's Potential

No doubt, your organization is digitalized to some extent, utilizing CAD drawings of products and parts, digital bills of material, online ordering, and more. But when it comes to manufacturing, the software that manages the operation is often not integrated with the business platforms. The resulting inefficiencies negatively impact the time and cost required to produce your products. Smart manufacturing's cyber-physical integration helps you overcome those limitations.

Access to invaluable, relevant production data enables real-time assessment and diagnosis of your factory's behaviors and trends. When coupled with flexible production systems, the result is agile manufacturing responsiveness that would otherwise be difficult, if not impossible, to achieve. For example, augmented reality employs digital versions of equipment and systems to appear on a maintenance worker's tablet or helmet heads-up display. The worker sees relevant information, including troubleshooting steps, when looking at a piece of equipment. Similarly, 3D printing enables rapid replacement of broken parts for which no spares exist or are not readily available. Your worker can scan the damaged part, create a CAD file, and produce the critical component with a 3D printer.

3D image parts

Research by Ernst & Young, which supports smart manufacturing initiatives worldwide, found their clients experienced:3

  • 15% increase in overall equipment effectiveness

  • 20% boost in manufacturing throughput

  • 35% reduction in unplanned downtime

  • 45 to 80% improvement in employee engagement

  • 25 to 40% cut in energy, maintenance, logistics, and material costs

These benefits extend beyond the factory to new product development and time-to-market. The Smart Manufacturing Leadership Coalition found that smart factories experience a 75% reduction in the cost of implementing modeling and simulation and a 40% reduction in cycle times.4 Being digital is core to improving your physical production processes.

Smart manufacturing is facilitated by digital twins that manage, monitor, and maintain machines and the production processes. Digital twins are a simulation of your manufacturing operations' physical and digital behavior, including machine and product performance, operator performance, quality goals and results, safety compliance, scheduling, and utilization. Aaron Frankel, Siemens Vice President – Additive Manufacturing, notes that a comprehensive digital twin enables you to design, realize, and optimize your manufacturing environment:

  • Product (design elements including mechanical, electronics, and software elements)

  • Manufacturing process (represents the steps, assembly plans for major components)

  • Production system and line (bill of equipment, layout)

  • Production operation (technical package to manage production of component assemblies and subassemblies)

  • Product performance (understand how the item held up in its operating environment)

A comprehensive digital twin facilitates your analysis of the current systems and optimizes those operations to anticipate future market requirements.

Impediments to Smart Manufacturing

Digitalization is required of all industries and is especially critical for aerospace, medical devices, and other sectors with tight tolerances and low failure rate requirements. Process certifications, test results, and traceability of your products must be provided to the customer today and be available years, if not decades, later whether conventional or 3D printing technologies made them. Artificial intelligence techniques must be employed to analyze your operations' current state and catalog and later retrieve data for reorders or product tracing.

Yet, as you have likely experienced first-hand, manufacturing operations do not modernize their systems as often as the business does. Operations managers are risk-averse, and rightfully so, not wanting to upset a process producing products at an acceptable cost and quality. They have limited funds to invest in anything other than production equipment, inhibiting the implementation of a smart manufacturing platform. The result is a mix of machinery that employs proprietary, often incompatible, data sets and formats. However, a successful smart manufacturing implementation requires a strategic look forward and an investment across your business and supply chain.

A significant potential impediment is that a smart manufacturing platform employs a sizable amount of data that must be accurately integrated, managed, and shared in a timely and distributed fashion. However, if your organization is typical of many manufacturers, different business units implemented the systems, each with its terminology, priorities, and stakeholders. Overcoming the babel of systems that do not communicate quickly or well is a challenging, often political task that must be completed for your smart manufacturing initiative to be successful.


Twenty-five years after Nicholas Negroponte's seminal work, digitalization exists across manufacturing. Execute these recommendations to ensure your organization benefits from being digital:

  • Audit your digital, physical, and human-based systems to determine whether they generate all the comprehensive, real-time information required to support a responsive manufacturing operation

  • Distill complex data and generate meaningful analytics that support real-time and strategic decision-making by using artificial intelligence techniques

  • Develop an agile, adaptive manufacturing capability by executing flexible digital systems and physical processes on a single assembly line or within one factory at first while planning for subsequent use in multiple factories

  • Implement a smart manufacturing platform that orchestrates supply and production requirements with agile manufacturing that leverages 3D printing for quick wins and localized production

Pete Basiliere

Pete Basiliere provides research-based insights on 3D printing and digital-printing hardware, software and materials, best practices, go-to-market strategies and technology trends. Before founding Monadnock Insights, Pete spent eleven years as Gartner’s Research Vice President – Additive Manufacturing. Pete’s full bio can be found here.

1. National Institute of Standards and Technology, U.S. Department of Commerce;

2. Netflix on AWS;

3. How the Smart Factory Can Make Your Shop Floor Smarter;

4. Smart Manufacturing Leadership Coalition;

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