Digital Strategy

A Closer Look at the Digital Factory

March 30, 2021

Digital factories are taking over manufacturing. Here is everything you need to know.

Every industry across the world has experienced some sort of digital transformation in the last decade. The industrial world is no exception. Digitization has taken over factories. The future is here, and it isn’t going anywhere. 

Change can feel intimidating, but we don’t have to fear all this new technology. The sci-fi writers of yesteryear predicted that robots and computers would destroy the workforce and eventually, humanity. While those made for good stories, reality looks a bit less dramatic. 

Embracing the digital factory mainly just means higher degrees of automation, smoother workflows, more efficient supply chain management, and simplified business processes. No robots are going to start a coup. In fact, robotics play just one small part of the digital factory. 

We want to help you get a handle on this new technology ecosystem, so we put together this brief post to give you a better idea of the digital factory. 

What is a Digital Factory?

A digital factory (also called a smart factory) is a manufacturing facility that utilizes advanced technology like robotics, smart sensors, artificial intelligence, big data analytics, and cloud computing to share information about each stage of the production process across the organization in real-time. 

Access to all this information enables organizations to more easily pinpoint and solve the problems within their processes, resulting in higher levels of efficiency, productivity, and effectiveness. 

One key element of the digital factory is that each individual piece of technology works with the others to create a type of digital ecosystem. The levels of automation may vary; some ecosystems are larger than others. But a connected network is the goal. 

An in-depth digital factory might look a little like this: Customers send in an order, which triggers an automated, AI-based workflow. Robots pick out the appropriate parts to assemble and place them onto self-driving vehicles that transport the pieces to the appropriate workstation. The digital aspect of these services also give visibility to inventory numbers, making it easier for the organization to keep the right pieces in stock.   

Once the pieces enter their workstation, they’re ready to be assembled through digitized manufacturing. Smart sensors at each station send information like the strength of the equipment or the total manufacturing time to a digital analytics platform that provides insight into the process for the manufacturing team.

What does Digitization in Manufacturing look like?

Enabling digitized manufacturing automation can save organizations a ton of time, money, and resources while actually improving their production process. 

Digitized manufacturing usually consists of automated 3-D printing or digital twins. 3-D printing, also called additive manufacturing, is a process that utilizes computer-aided-design (CAD) programs to build stronger, more reliable parts in a more efficient and cost-effective manner. The process starts at nothing and then adds parts layer by layer instead of milling away at a block to get to an end product.  

Digital twins have also brought about positive changes in the manufacturing industry. They are digital representations of physical objects that allow engineers to analyze and make changes to the design. The most sophisticated digital twins even simulate real-world situations, giving organizations the ability to see how the changes would affect day to day operations. 

5 Benefits of the Digital Factory

These advancements in technology can bring a variety of benefits to any manufacturing system, especially in areas of efficiency, sustainability, safety, productivity, and cost reduction. 

Operate More Efficiently

As with most modern technology, the digital factory helps manufacturing happen smoothly. Everything that used to require intentional monitoring and documentation now happens automatically. Such optimization allows organizations to streamline their workflows and simplify production processes. Decision-making becomes easier as the smart technology also records and analyzes datasets that leaders can use to become more informed on what works and what doesn’t.  

Ensure Sustainability

The equipment within a digital factory will automatically notify manufacturing team leaders when it’s time for maintenance, ensuring that you never miss a need. Increasing the reliability of these machines will make malfunctions far less likely and will allow teams to reduce their spending on repairs. 

Digital factories also help create a more sustainable workforce because these machines will never call out of work or quit. Organizations know what they will get every day. Plus, the recorded and analyzed data allows leaders to predict and plan for future production processes.

Simplify Safety

While nothing can completely eradicate all potential risk, the digital factory has become a much safer alternative to traditional manufacturing facilities. Digital tools do exactly what they’re programmed to do, and they do it the same way every time. This greatly reduces the costly mistakes that arise from human error. AI-based technology even learns to adapt when something is in its way or near it, meaning it will stop what it’s doing before hitting and damaging the object. 

Have a More Productive Factory Floor

The equipment without a digital factory never gets tired. It doesn’t require breaks, and it only stops when you shut it off. On top of that, the smart sensors these pieces of equipment have constantly collect and analyze data. Engineers can use these insights to see what portions of the process flow require corrections and which ones work well. As the team trims the fat of production, they will get closer and closer to a perfect and productive workflow.

Reduce Costs

Digital manufacturing provides organizations with insights into issues within the supply chain that can help leaders mitigate unnecessary risks and reduce spending on unneeded inventory items. Having inventory, delivery, and demand data all in one place also makes it easier for managers to see the whole picture and make more informed spending decisions.

4 Features of a Successful Digital Factory 

Switching operations can take a toll on any organization. Many industry leaders resist the idea of a digital factory simply because of the complexity associated with rolling out such a massive change in their business strategy. However, there’s really no stopping the digital wave from coming in. For the most part, it has already rolled onto the shore.

Because of this, organizations looking to succeed need to be ready to incorporate at least some elements of the digital factory, but do not fear! The beauty of going digital is that you get to pick what works best for your organization, and as long as you stick with a few key features, you should be just fine. Below are 5 essentials of any digital factory.

A Motivated Team

Like any type of organizational change, a successful digital factory relies heavily on getting people excited about the idea. Your employees will want to understand how all the new technology will benefit them, how it will make their lives easier. Executive leadership also needs to be on the same page. Workers will notice if some people have not fully bought in, which will only create more confusion and division. Once the organization is unified, the rollout will go much more smoothly. 


Digital factories work best when each piece of equipment or technology connects with one another – from design all the way to delivery. A workflow started by an order should trigger a robot to transport the appropriate pieces onto a conveyor belt that has sensors recording real-time data for software to analyze. Each step flows into the other for an entirely integrated and automated manufacturing process. 

Analytics Platforms 

Every organization will want to measure the success of their digital initiatives, even if the specific metrics vary between each company. With the data collected from all this new technology, gathering insights has never been easier, and software companies have created platforms that help leaders collect, track, and analyze the most important information so they can make informed choices on improvement. 

Different Levels of Digitization 

Many organizations either feel the need to go all-in on digitization or to resist it completely, but such a binary is unnecessary. Teams can choose how much or how little they want to incorporate, especially at the beginning. Some may choose to invest heavily in the startup costs and do a giant overhaul. Others will take one step at a time, trying it out with one specific piece to see how it goes. Either way is fine as long as everyone is fully committed to the task they choose to take on. 

Digital transformation has come to the manufacturing industry. Automation, optimization, integration, and efficiency are all made possible with the new technology found in digital factories. Organizations will want to think about how they can incorporate these tools into their business strategies if they want to adapt and prepare for the future of manufacturing.  

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Kathryn Kosmides


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