Where is your factory for manufacturing

What is an intelligent factory and how can one be implemented?

Manufacturing technologies are developing at a breathtaking pace. Networking in particular takes modern manufacturing to a completely new level. Smart factories are production environments in which networked machines, processes and entire ecosystems are optimized through data acquisition and data analysis. The industrial Internet of Things (IIoT) is the key that is now unlocking all of the previously hidden potential.
But how does it work in practice? Let's take a closer look at that.

Due to factors such as increased competition and price pressures, combined with rising costs of maintaining supply chains and also high labor costs, some manufacturers today have to be content with tighter profit margins. It seems that executives simply cannot get more out of their production lines with simple solutions. And obviously, with machines and people, no matter how good they may be, you can get no further than a certain point. Get started with Industry 4.0 and APM (Asset Performance Monitoring).

Let's take a quick look at the evolution of the manufacturing sector and learn more about the fourth industrial revolution, commonly known as Industry 4.0. In this context, we will also explain the first steps towards your own smart factory.

Limits of manufacturing in the current state

The manufacturing strategies that are predominant today date back to times when there were no or no high demands on efficiency. At the time, this certainly led to impressive results. But this model (there really wasn't a “strategy”) can no longer contribute to sustainable growth in today's highly competitive markets. The massive globalization of manufacturing has spawned new players from Asia who have increased the demand for smart factories and optimized manufacturing lines.

Nowadays companies have to deliver optimal quality in the shortest possible time at the lowest possible cost and at the same time ensure that bottlenecks are eliminated and labor costs are reduced to a minimum. The old model of simply being able to determine the market price as a market leader is becoming less and less reliable. This leads to new challenges for manufacturing in all industries.

Machines and systems - Companies use complex machines and systems to deliver products on time. Unfortunately, every plant or machine consists of dozens (or sometimes hundreds) of different components that can fail at any time and cause undesirable business interruptions. If product quality and product quantity are not monitored in real time, this can lead to financial losses and, in the worst case, even damage your brand image.

Human Resources - Manufacturing today is highly dependent on two basic assets - machines and the people who operate them. In order to achieve optimal results, systems and machines as well as all employees have to work properly. This is not a realistic scenario. Existing manufacturing processes that rely exclusively or too much on the human factor are not able to create effective value chains. A smooth delivery of the end product and a quick market launch become a problem.

Diversified portfolios - More and more companies are using their limited resources to manufacture not just one but several products. However, the systems and machines are the same and so are the people who operate them. It used to be that there was only one production process for all production orders. Today, diversified product portfolios make it difficult to optimize manufacturing processes and product quality suffers.

Complexity in Manufacturing - Flexibility is a big requirement, but many manufacturers cannot meet it. The demand in the market is extremely volatile and is influenced by a variety of factors - economic fluctuations, political developments and other reasons such as the recent COVID-19 pandemic, which has also had a direct impact on the wishes and needs of consumers.

The supply chains for raw materials are also influenced by these factors. Actually, one should minimize the reaction time to such changes, but unfortunately the traditional models cannot do this due to their rigidity and the lack of usable information about their own production.

These are just some of the limitations and shortcomings of the existing “production model” that is making it increasingly difficult for companies to make sustainable profits and bring reliable products to market. Managers need to know in detail what is going on in production at all times in order to be able to react quickly and in real time to problems. This is the only way to build a sustainable value chain. This is exactly where Industry 4.0 comes in.

Industry 4.0

The solution to overcoming the above-mentioned limitations is Industry 4.0. This revolution is about networking and the digital transformation of manufacturing and value creation processes. This includes the use of the industrial Internet of Things (IIoT) and machine-to-machine (M2M) communication, but also machine learning (ML), artificial intelligence (AI) and many other data-driven and digital channels and platforms, which are in Sum then leads to an “intelligent factory”.

Production as we know it will not be the same by the end of the decade. The introduction of the industrial Internet of Things (IIoT) is expected to increase German GDP by up to USD 700 billion by 2030.

It all started in Britain in the 19th century. With the invention of the steam engine, manufacturing at home was increasingly being replaced by manufacturing in factories. The second industrial revolution was based on the integration of electrical devices and was used to improve manufacturing lines for mass production (during World War II). The current revolution of Industry 4.0 is the continuation of the third industrial revolution. Here, the computerization of machines and the automation of processes reduced the dependence on human intervention.

The main advantages of Industry 4.0 and intelligent factories include:

  • An overall improved operational efficiency
  • Higher productivity
  • Maximized asset utilization
  • Less downtime
  • Better quality
  • More innovation

How can you implement an intelligent factory?

And how does the Industrial Internet of Things (IIoT) actually work and why is it a driver for Industry 4.0? The whole thing is a bit more complex than just “smarter” machines that are always online. Yes, the machines save the relevant characteristics and transmit them. But as can be seen from the diagram below, a comprehensive and scalable intelligent factory also requires some software and hardware infrastructure.

Put simply, Industry 4.0 is about collecting and processing data from the manufacturing ecosystems (machines, systems, production lines, etc.). This data can be used to gain knowledge that can be implemented in real time as part of improved business intelligence. In this way, key production figures can be improved in all areas. The obvious improvements include greater transparency and good traceability. The manufacturing processes are also becoming more efficient, more productive, more economical and more scalable.

Although most executives understand the basics of Industry 4.0 and are familiar with the above terms, they cannot get started due to various technical and financial restrictions. They are often heavily invested in expensive but outdated ecosystems or they simply cannot afford the downtime associated with replacing or upgrading their infrastructure. This is where digitization with non-invasive sensors comes into play.

The first step is always the hardest

Implementing IIoT technology to collect machine data is always the first step in any company on the way to the smart factory. But to use a comparison from human life: Learning to walk includes the crawling phase. A typical production consists of dozens of expensive machines from different manufacturers and of different types. Having to replace them with new and networked machines would be daunting for many reasons. The salvation lies in retrofitting existing systems and machines with modern digital technology.

Did you know?

As shown in the recent Capgemini Manufacturer Research Survey, 26% of all companies surveyed still do not have a smart factory initiative.

According to a recently published survey by McKinsey, 68% of the industrial companies surveyed said that Industry 4.0 is their top priority.

Nowadays it is possible to mount sensors non-invasively and safely on any machine or system. In this way, important performance indicators can be recorded regardless of the machine manufacturer or type. These sensors are all connected to a local network, record various measured values ​​such as electrical current, temperature, humidity, vibration, sound, etc. and thus generate data. This real-time data is processed by proprietary software that generates actionable insights immediately. These findings, i.e. the conclusions derived from the data, can then be used to improve productivity and production efficiency.

Retrofitting IIoT technology in production machines and systems offers the following advantages:

Quick start - The main advantage of a retrofit solution is its plug-and-play nature. There are only very low investment and installation costs. Companies can literally transform their manufacturing into a “smart factory” in a matter of hours. Slow and inefficient production facilities are turning into optimized and synchronized ecosystems. The first results are almost always immediately visible and the company's profit can be increased within a few weeks.

Overview and transparency - Using a central dashboard, executives and managers can now monitor all important key figures locally and remotely from any location. The real-time data from machines, shifts, production lines and production facilities are displayed in a uniform and clear manner and can be viewed by all employees, i.e. by the workers in production and managers on the executive floor. Personalized alerts and reports via cellphone and tablet are available around the clock. This enables bottlenecks to be better identified and processes to be optimized in order to increase productivity.

Fast and Secure - When using non-invasive sensors, it is impossible for hackers to break into machine controls and manipulate machines. If a hacker breaks into the surveillance system, he can see a lot of sensor data, but he cannot directly influence production. There is also no risk of the guarantee of your machines being void, as no digital connection is established between the monitoring system and the machine electronics.

Employee engagement - With real-time asset monitoring, you can inspire your employees and encourage their commitment. More and more companies are setting up large screens with live production data on their premises so that employees can really see what the situation is in production. This is helpful when setting common goals and production metrics (KPIs). At the same time, employees are encouraged to work together as a team to achieve these goals.

All of the benefits just listed offer employees serious incentives to perform better. Digitization makes it possible to save money and resources in production. Work, raw material and energy consumption can be reduced and productivity increased. Access to data is only the very first step in digital transformation. Once data is available, there is hardly a limit to the possibilities that arise from it: Predictive maintenance, artificial intelligence or self-optimization are just a few of the buzzwords here.


Gone are the days when dozens of employees had to struggle around the clock to keep an eye on the activity of their machines. Gone are the days when managers and executives did not have a real overview of productivity in their own company. Manufacturing companies can now use data and business intelligence to improve productivity and achieve real scalability thanks to new functions in asset performance monitoring.

Executives and managers can only optimize their production processes with immediately implementable knowledge from the performance data of machines and systems and thus increase productivity and profitability. The application of orthodox manufacturing practices in today's market environment therefore seems increasingly irresponsible. The transition to Industry 4.0 must take place gradually. The very first step is to network and digitize all assets in order to obtain real-time data. Start your transformation now.