Smart factories to deliver benefits of up to $1,500 bn

Capgemini research on Smart Factories: How can manufacturers realize the potential of digital industrial revolution – found that the investments that manufacturers are making in smart factories are set to deliver benefits of up to $1,500 billion over the next five years.

Investment levels varied widely between industries, but it was notable that automotive was one of the most bullish sectors in this domain.

1. Smart factories could add up to $160 billion annually to the global auto industry as productivity gains by 2023 onwards.
2. The automotive industry is the most enthusiastic about smart factories and it is making larger investments and setting higher targets for its digital manufacturing operations than any other sector.
3. Around 42% of smart factory initiatives are struggling and the digital maturity of their manufacturing operations is below par.
4. Those that are making the best progress invest 2.5 times more than the companies that are struggling. Additionally, they are involving their leadership teams, developing their talent and investing in the right areas such as manufacturing intelligence and predictive maintenance.
5. More manufacturers could make a success of this opportunity if they follow in the footsteps of a cohort we call the “digital masters.” This is a group that, in particular, has manufacturing operations functioning at a high level of digital maturity.

Audi has invested $1.3 billion in building its smart factory in San Jose Chiapa, Mexico. The plant is at the cutting edge of digital manufacturing capabilities – employing centralized production control, smart logistics, and an electronic quality process – leading to very high productivity and efficiency levels.

BMW is investing $1 billion in expanding one of its most flexible and automated plants located in Spartanburg,

South Carolina, USA. The plant, which is also BMW’s largest production facility in world, started leveraging collaborative robots as early as 2013. It will further invest a $600 million at the site between 2018 and 2021.

Faurecia, one of the world’s largest automotive parts manufacturers, has multiple smart factories in its stable. Faurecia recently unveiled its $64 million smart factory in Columbus South, Indiana, USA. Faurecia’s Caligny smart plant in France is a highly digital, state-of-the-art facility, and has been recognized as an “Industry of future showcase” from the French Industry of Future Alliance.

The Smart Factory success formula falls under three categories:

1. Strugglers need a clear vision, strong investment and a focus on the features utilised by digital masters.
2. Early stagers need to focus on governance and talent.
3. Organisations making good progress must follow the example of digital masters.

The company surveyed 326 executives from automotive industry. These executives were drawn from director-level or above, from a diverse set of functions, and are closely associated with their organizations’ smart factory initiative. The survey covered executives from eight countries – China, France, Germany, India, Italy, Sweden, the United Kingdom, and the United States. The survey sample is evenly distributed between OEMs and suppliers, each having $1 billion or more in annual revenues.