What is Smart Manufacturing?

In 2021, the size of the global smart manufacturing market reached US$305 billion, and is expected to reach US$450 billion by 2025. With a compound annual growth rate of 10.5%, smart manufacturing will usher in the growing trend of the manufacturing market.

Previous manufacturing models usually pursued automation to mass-produce products. But now, more and more manufacturers are turning to smart manufacturing to achieve rapid customized production of products to meet customer needs. The benefits of smart manufacturing have been realized through conservative strategies such as strengthening manufacturing resilience, to gradually improving production capacity and efficiency, energy conservation, emission reduction, and recycling. All these have become important keys to boosting the growth of the smart manufacturing market.

Smart manufacturing gap analysis: Separation of data and business scenarios

With the blessing of digitalization, the manufacturing industry is being continuously strengthened. The industry is seeing the intelligent transformation of production methods, organization, supply chains, and manufacturing modes driven by new forms of marketing, services, and design.

The overall business strength of the company has improved, but there is still a gap in traditional fields such as device automation and intelligence. On the one hand, the lack of corresponding technical and production processes, coupled with the lack of motivation for automation upgrades due to cost issues, has resulted in low penetration and utilization rates of smart factories and smart workshops. On the other hand, the level of data flow is not enough to support the automatic execution between multiple business systems, which reduces the fluency of the business chain and the automatic collaboration between systems is not high.

The core of smart manufacturing: Generating value through data flow

Smart factories are the key to future development in industry, and the speed of device interconnection will be further accelerated. The standardization of production is guaranteed through data monitoring so that in the face of emergencies, production can respond immediately and data can act as a conductor to reduce risks.

In the manufacturing sector, data is an important resource. The manufacturing industry has an extensive accumulation of data which the Industrial Internet of Things (IIoT) can use to create major advantages. Whether it is the IIoT or smart manufacturing, all industrial elements, the entire industrial chain, and the entire value chain, including people, materials, and machinery are deeply interconnected.

Smart factory: Data culture should play an important role

An enterprise's digital development strategy, overall framework, cultural accumulation, management model, and key processes are mutually enhancing. To gain value from the information center, new technologies need to be developed and integrated.

Important elements of smart manufacturing:

Manufacturers that can master smart manufacturing will become the leaders of Industry 4.0. The following elements will help to build a good foundation and speed up the implementation of smart manufacturing.

1. Element 1: Import automation equipment
   Although automation equipment is one of the foundations of smart manufacturing and can replace some labor-based jobs, it is important to match and optimize each link of design, production, and service to have high-efficiency and low-cost processes. If automation equipment is randomly introduced it may just be a waste of investment and have little benefit.
2. Element 2: Device connection and data integration
   After automation equipment has been obtained, the next step is to connect the equipment. The data of each piece of equipment can be integrated with the technology of the Internet of Things, and the manufacturing process can be optimized.
3. Element 3: Remote Monitoring
   Smart manufacturing has replaced some physical work, allowing people to carry out more decision-making and technical work. Through remote monitoring, operators can monitor the status of equipment at any time, adjust manufacturing schedules in real-time, and detect equipment malfunctions to increase productivity and extend equipment life.
4. Element 4: Combining AI technology
   The ultimate goal of smart manufacturing it to combine artificial intelligence with manufacturing, and is an important trend at present. AI allows equipment to be upgraded, and through self-learning, information is collected which can be used to continuously optimize production processes.

With the digital transformation brought by Industry 4.0, not only the manufacturing industry, but the government as well, hopes to increase intelligent industry. Many manufacturing industries only saw Industry 4.0 as a means to an automated, unmanned factory, however this led to a lot of money being invested, without gaining the full potential of smart manufacturing.

Several difficulties are generally encountered during transformation. For example, the integration of automated equipment in production lines requires planning and design to create a complete system that will generate maximum benefits. Although today's technology has gradually matured, enterprises often cannot afford the cost of high-tech applications that would bring the economic benefits that result from implementing smart manufacturing. During the transformation, there will be a period of time required for manpower and system integration and adjustment. In addition to transferring data, recruitment of talents or internal training is also required. This should be taken into consideration to speed up the adaptation time.

Many enterprises will be eager to carry out industrial transformation. Before the transformation, they should first evaluate the situation within the enterprise, plan for possible problems, and have a complete integration plan to make for a smooth transformation.

1. Expand 5G applications:
   The three major features of 5G (URLLC, mMTC, eMBB) are expected to provide secure, fast, and highly reliable communications, driving the transformation and upgrading of the manufacturing industry to smart factories. It is also necessary to develop the surrounding supply chain and ecosystem together with telecom operators, system integrators, and Netcom operators. In the future 5G+AI innovation will be able to handle one million edge devices within one square kilometer with optimal performance.
2. Import AI interpretability:
   Humans and machines must cooperate, and interpretability must be used to guide people to make corresponding decisions.
3. Federated Learning Model:
   Takes into consideration that when training AI models, traditional centralized learning cannot be carried out. Privacy, regulations, geographic regions, and industry competition data all have to be considered. Model sharing is used instead of data sharing to overcome application differences of knowledge sharing. Smart manufacturing can be used in areas where small and medium-sized enterprises are clustered and have common AI requirements, but require product differentiation.
4. Information security protection:
   The most common security threats in Taiwanese manufacturing are ransomware, malware attacks, and phishing attacks. In the future, enterprise defense will move towards a new architecture that integrates IT and OT, so that the OT side will also be included in information security protection, and a unified solution will be established to alleviate the challenges of digital transformation.

The future of smart manufacturing focuses on:

The core of smart manufacturing is real-time integration of data and equipment, so latency, security, and computing power will be optimized. Future development will focus on edge computing and 5G, such as AR/VR, machine vision. Beyond the important basic applications, such as digital twins and predictive maintenance, technology will support the overall application. Smart manufacturing can also improve energy optimization, reducing carbon emissions. Green IoT technology will be a key element of future smart manufacturing equipment and factory design.

Taiwan's manufacturing industry has the advantages of high customization and supply chain clustering, and the smart manufacturing value chain is relatively complete. Many manufacturers have invested in the integration and application of smart solutions, providing a variety of one-stop service options such as equipment health inspection and machine vision, effectively reducing the threshold for introduction. Continuing this development trend, micro-factories will be a key entry point for Taiwanese manufacturers to explore business opportunities in the future.

In the past, there were multiple global divisions of labor in the smart manufacturing value chain. However, with the return of the manufacturing industry to normal, after the turmoil in recent years, short-chain and localized production has risen, so new types of micro-factories have been developed. Micro factories rely on a high degree of automation and accurate analysis to improve product quality with minimal resources. The benefits come from a flexible supply chain, streamlined manpower, and low initial costs. Manufacturers can take advantage of niche markets by making transformations that upgrade and increase product output.