Smart Factories Could Add US$500 Billion To The World Economy

Smart Factories Could Add US$500 Billion To The World Economy Posco

Worldwide: Manufacturers expect that their investments in smart factories will drive a 27 percent increase in manufacturing efficiency over the next five years, adding US$500 billion in annual added value to the global economy, according to a research report by Capgemini’s Digital Transformation Institute.

Smart factory features include collaborative robots, workers using augmented reality components and machines that send alerts when they need maintenance. By the end of 2022, manufacturers expect that 21 percent of their plants will be smart factories. Sectors, such as aerospace and defense, industrial manufacturing and automotive, where people are working alongside intelligent machines, are expected to be the leaders of this transition.

As a result of productivity, efficiency and flexibility improvements, smart factories will benefit from significant reductions in operating costs. For example, the report estimates that the average automotive manufacturer could drive up to a 36 percent improvement in operating margin through improved logistics and material costs, equipment effectiveness and improved production quality.

As such, the majority of industrial companies have already embarked upon their digitalisation of plants to stay competitive; only 16 percent of those surveyed say they don not have a smart factory initiative in place, or upcoming plans to implement one.

More than half (56 percent) of those surveyed have invested US$100 million or more in smart factory initiatives over the past five years and 20 percent have invested US$500 million or more. Yet only a small number of organisations (six percent) are at an advanced stage of digitising production. Further, only 14 percent of those questioned stated that they felt ‘satisfied’ with their level of success.

The upper end of the forecast is that half of factories could be smart by the end of 2022 with the increased productivity gains adding up to US$1,500 billion to the global economy.

“This study makes it clear that we are now in the digital industrial revolution. The impact on overall efficiency will be profound,” said Jean-Pierre Petit, global head of digital manufacturing at Capgemini. “The next few years will be critical as manufacturers step up their digital capabilities and accelerate their digital outcomes to maximise company benefits.”

The research, which was conducted from February to March 2017, interviewed 1,000 executives holding director or above rank in manufacturing companies with a reported revenue of more than US$1 billion each.

APMEN News, May 2017

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