Industry 4.0 and the Evolution of Smart Factories


The advent of technologies like AI, IoT, robotics, Big Data, and Cloud has brought about a transformative change of sorts in the industrial landscape.

In recent years, the manufacturing sector has witnessed increased upgradation of older machinery and equipment with highly automated and efficient models – a feat that has led to the conceptualization of what is called ‘smart factory’.

An inherent component of the Industry 4.0 trend, smart facilities are basically known for offering benefits like reduced human errors, improved production quality and high manufacturing accuracy and efficiency, which has led to smart factory market emerging to be one of the game-changing verticals of the smart technologies space.

Use of smart IoT sensors and devices connected to machines is slated to enable real-time monitoring of work conditions and manufacturing operations. Moreover, speculating potential benefits of AI and automation, companies worldwide are investing heavily on smart technologies to boost overall operational efficacy and productivity, which is likely to surge the growth prospects of smart factory industry. (Source: Global Market Insights, Inc.Opens a new window )

Citing an instance, in 2019, Milacron Holdings Corp., a leading industrial technology firm that serves plastics processing companies, announced that it would use M-Powered IoT technology to offer a full-suite of advanced analytics and AI-based Industry 4.0 services to improve aspects like machine performance, quality, availability, uptime, and more. (Source: MilacronOpens a new window )

Industrial robots have also turned out to be valuable assets for manufacturing facilities, as they are capable of handling critical manufacturing operations with utmost accuracy and ease. Also, to enhance overall production capacity, market players are eyeing potential investment and fundraisers.

Recently, Osaro, Inc., a San Francisco-based startup developing AI-powered solutions for industrial robots, announced that it has raised $16 million in a Series B funding round led by King River Capital (KRC).

Smart Factories – a Gist of the Key Factors Driving the Demand for These Facilities

Advancements in sensor technology have enabled numerous companies to generate valuable insights which can later be used to optimize operational performance of machines and equipment. Automation and machine learning meanwhile are allowing smart facilities to work independent of human operators and undertake necessary course of action when needed.

The consistent requirement to reduce labor and operational costs has been generating the need for smart facilities. Given that these are connected in the most advanced manner possible, the overall manufacturing performance in the industrial arena has been observed to depict an upsurge. The growing demand to reduce costs, both operational and labor, and deploy intelligent solutions for efficient outcomes are certain to augment smart factory market trends.

Tech companies are also focusing more on developing novel technologies and innovations that could boost adoption of smart infrastructure. In 2019, leading supplier of robotics and AI technologies, Geek+ launched one of the world’s first smart factory that uses robot arms to develop mobile robots.

The Significance of Industrial Robots and Their Impact on Smart Factory Industry

The growth graph of smart factory industry has inherently found dependence on the requirement of industrial robots, that have been gaining massive traction of late, especially in the manufacturing sector. The demand can be attributed to the benefits of these robots, like high productivity and efficiency over human labor.

This trend is increasingly witnessed across the automobile sector, where spot welding robots are used to undertake speedy operations on production line. Robots are also used across applications like powder coating and metal fabrication that can potentially be hazardous to human workforce.

Growing investments and an exponential rise in sales of industrial robots indicate lucrative growth opportunities in smart factory market. Backing this claim, a report from The International Federation of Robotics (IFR) cites that annual global sales of industrial robots was valued at around USD 16.5 billion in 2018, while an average growth of 12% per year is expected between 2020 to 2022. This growth can be attributed to companies increasing adopting automated systems to lower labor costs and surplus spending on employee training programs. (Source: International Federation of RoboticsOpens a new window )

Additionally, to offer improved customer experience to businesses, robot manufacturers and tech companies are collaborating as well as initiating acquisitions. In a recent instance, automatic test equipment developer Teradyne, Inc. announced plans to acquire mobile robot maker AutoGuide Mobile Robots for US $165 million (Source: Robotics Business ReviewOpens a new window )

The F&B Industry – a Behemoth That Will Add Substantial Growth Impetus to Smart Factory Market Trends

It has been speculated that smart factories are most probable to gain traction from food applications. Technology is indeed becoming a vital part in today’s food and beverage industry as there is an intense need to focus on essential aspects like food quality, safety, traceability and brand protection. High precision sensors and automated systems are mostly used to keep an eye on such parameters as they are products that could easily bypass human operators.

Meanwhile, traditional food & beverage factories are adopting automated technologies to increase production & operational management. Tech companies that are a part of the food and beverage industry chain are also focusing more on developing new product offerings.

In 2019, food production technology and Robotics-as-a-Service (RaaS) solutions provider, Picnicâ„¢ launched first-of-its-kind intelligent end-to-end automated Pizza assembly platform that offers high-volume, consistent, customizable pizzas by leveraging software, cloud and deep learning technology.

In addition to this, stringent federal norms regarding food safety and quality is likely to encourage companies to adopt automated equipment across production facilities, thereby offering significant impetus to smart factory market size in the food and beverage sector.

The Contribution of Industry Contenders Toward the Expansion of Smart Factory Market Trends

The competitive landscape of smart factory market is inclusive of companies such as Honeywell International Inc., ABB, General Electric, Emerson Electric, Schneider Electric, Robert Bosch GmbH, Rockwell Automation, Siemens and more. Most of these have been working to invest heavily in the development of advanced AI and IoT-based solutions that could support their clients with improved productivity and efficiency.

Industry partakers are also seen enhancing their business reach by means of numerous expansion strategies. For instance, in 2019, leading robotics, CNC, ROBOMACHINE and Industrial IoT solutions provider, FANUC America announced the inauguration of its new North Campus robotics & automation facility in Auburn Hills, Michigan. The contribution of major technology conglomerates toward the smart factory industry is thus one of the most notable trends to watch out for, in the coming decades.

As the proliferation of 5G depicts a surge and the demand for high-end industrial software and solutions increases, the global smart factory market outlook is likely to exhibit a commendable transformation. A Global Market Insights, Inc., report predicts smart factory market size to exceed USD 155 Billion by 2025.