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Digital Supply Chain and Smart Factories: Future of Manufacturing

The smart factory shows a jump forward from conventional automation to an entirely connected and flexible arrangement one that can use a stable stream of data from connected operations and manufacture systems to learn and adapt to new demands. As organizations make advancement on their smart manufacturing initiatives, the cutthroat competition of innovative products, services and ecosystems raises the stakes for all manufacturers. There is a requirement to think in a different way about business models, ecosystems, and ways to outflank the competition. The smart manufacturing strategy is not only about incremental change or cost savings outlay; it is about innovating products and services and incorporating innovation at a much higher pace than ever before.

Convergence of Smart Manufacturing

Currently, the industry is experiencing a fourth wave of industrialized technology change referred to as Industry 4.0. Connected industrial devices have started to see wider adoption in many areas from internet gateways to networking equipment and more. In this change, companies are combining data from networks of devices and computer-controlled systems with cloud and computing to accelerate the journey towards fully automated smart factories. Smart Manufacturing strives for superior levels of connectivity and optimization of processes in the manufacturing value chain. The following table shows the different waves converging technology with smart manufacturing:

StepsChangesUsed for
First StepMechanization of process and Steam PowerSingle Machine for many users
Second StepTechnological Revolution Mass Production, Assembly line, and ElectricityMany Machines and many users
Third StepDigital Revolution Computers and Automation of the processesMany Machines for each user
Fourth Step Cyber Physical Systems, Artificial Intelligence, Big Data, and 3D PrintingInternet of Things, Smart factory

Value Chain Management Aspect

A significant aspect in achieving a completely linked extended project in Smart Manufacturing is the Value Chain Management perspective. Value Chain Management targets in reduction of resources and accessing value at each stakeholder function along the chain, ensuing in optimal process integration, better products, decreased inventory, and improved customer satisfaction. The Value Chain Management dimension includes the following processes:

  • Customer Management: with online interaction with customers for quicker custom product configurations, order in-process visibility, and approvals for changes, deviations, or delays.
  • Compliance Management: maintaining organizational guidelines coordinates audits and monitors compliance performance with internal departments and external regulatory agencies.
  • Operations Management: delivering real-time information from production processes to other business management functions and orchestrates activities into the supply chain to make sure those material, parts, and subassemblies arrive at the right place at the right time.
  • Resource Management: of personnel and equipment required to make the product, provide product services, and maintain the equipment up and running with the required capabilities and certifications.
  • Supplier Management: with functions from identifying and the supply chain with the accurate associates to synchronizing, monitoring, as well as maintaining the essential quality levels.


The Digital Thread dimension of Smart Manufacturing begins with the engineering blueprint of the manufactured goods and follows the product lifecycle through its production, sourcing and service life ensuring that the digital definition of each product unit is united with the physical product. The digital data for each product includes every integrated revision to the engineering definition and any deviations from the design qualifications standard and executed on the product during its lifecycle. The flow of processes in the Digital Thread dimension is depicted below:

  • Specifications Management: for design of manufactured goods and processes includes 3D models and recipes, product variations and configurations, and implementing change management practices.
  • Operations Management: which includes production and verification processes including programs and work instructions for automated 3D printing, machining, and verification against engineering specifications.
  • Product Services Management: for safeguarding of the product throughout its service life with data collected about its modifications, performance, and replacement of parts.

The Way Ahead

But the biggest challenges ahead are cultural. The question being how all involved would embrace new business models, new processes, as well as the new levels of transparency among departments and partners in the ecosystem? There will be many mechanical hindrances along the way to create the Smart Manufacturing connected enterprise. For instance, data exchange standards will need to evolve and be adopted by hardware and software vendors, and security concerns will need to be addressed at all levels of enterprise communications. Organizations will soon overcome these barriers and realize a network of connected partners, systems, and resources that will result in the transformation of conventional value chains and the emergence of latest manufacturing practices and production models that control the advanced levels of connectivity to attain new levels of optimization, orchestration, and customer service.

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