Smart Factories Will Deliver $500B In Value By 2022
- Smart factories are revolutionizing manufacturing by enabling a 7X increase in overall productivity by 2022.
- Smart factories have the potential to add $500B to $1.5T in value added to the global economy in five years.
- 76% of manufacturers either have a smart factory initiative that is ongoing or are working on defining one, with 14% of companies satisfied with their level of accomplishment.
These and many other insights are from Capgemini’s latest market analysis, Smart Factories: How can manufacturers realize the potential of digital industrial revolution. A PDF of the report is available here (32 pp., PDF, free, no opt-in). Capgemini’s Digital Transformation Institute (DTI) collaborated with Digital Manufacturing Services to produce this study. The research team surveyed 1,000 senior executives of large companies currently planning to and currently implementing smart factories globally. Please see page 27 of the report for additional details on the methodology.
Capgemini found that industrial manufacturing, aerospace and defense, and automotive and transportation industries have the highest percentage of manufacturers who have an ongoing smart factory initiative today. Contributing technologies to smart factory initiatives include Internet of Things (IoT), Big Data Analytics, Artificial Intelligence, Advanced Robotics, 3D printing and cloud computing platforms that unify these technologies together, enabling faster smart factory deployments globally. These technologies. all unified by cloud platforms are revolutionizing the global manufacturing landscape today.
Key takeaways of the study include the following:
- Smart factories are revolutionizing manufacturing by enabling a 7X increase in overall productivity by 2022. Capgemini found smart factories will be able to accelerate on-time delivery of finished products by 13 times, with quality indicators improving at more than 12 times the rate of improvement since 1990. Capital Expense (CAPEX) and inventory costs are predicted to be rationalized at 12 times and material, logistics & transportation costs expected to be rationalized at 11 times the rate of improvement since 1990. The following graphic provides a comparison of manufacturer’s annual gains since 1990 versus expected annual gains attributable to smart factory technologies in the next five years.
- 43% of all manufacturers currently have an operational smart factory initiative, and another 33% are in the process of defining one. North America leads adoption with 54% of U.S. manufacturers having an ongoing smart factory initiative operational today. Germany (46%), France (44%), the United Kingdom (43%) and Sweden (39%) are the top five nations globally who have smart factory initiatives in place today. The following graphic provides a geographic analysis of smart factory implementation status by region.
- Smart factories have the potential to add $500B to $1.5T in value added to the global economy in five years. Based on the conservative estimate of 21% of all manufacturing plants in the eight surveyed geographies reworked into smart factories by 2022, the total value-added output and contribution to the global economy would be $500B. If smart factory adoption accelerated and reached 60% across all eight geographies, the total value-add contribution from smart factories would reach approximately $1.5B.
- Industrial manufacturing (67%) and aerospace and defense (62%) lead regarding the launch of smart factories. In contrast, life sciences, biotech, and pharma have seen only 37% adoption of smart factories across the global base of manufacturers in these industries. Just 50% of automotive and transportation and 42% of energy and utilities have ongoing smart factory initiatives today.
- 56% of manufacturers have invested $100M or more towards smart factories. Greenfield initiatives are most often new business models manufacturers invest in to open new markets by relying on new products and services strategies. Brownfield initiatives are most often smart factory investments in existing markets. GE’s $200M+ investment in its “brilliant factory” in Pune, which opened in February 2015 is an example of a greenfield smart factory strategy.
May 15, 2017, announcement
Summary of Study Results