SMART Factory 101: What Is a Smart Factory & What Are the Benefits?

Abby Baumann Jun 13, 2022

As technology continues to go through advancements and become more prevalent in today’s manufacturing industry, it’s becoming clear that industry 4.0 is upon us. Rather than being an idea of the future, digital transformation is already happening all around us, and it’s important that we know how to join in to increase profitability, sustainability, and improve our manufacturing operations.


SMART factories embrace technology and integrate it into every function of manufacturing, from supply chain management to production systems. In this article, we’ll discuss everything you need to know about SMART factories and their benefits, including the useful tools you’ll need and the different levels of a SMART factory.

What Is a SMART Factory?

A SMART factory is a digitized manufacturing facility that utilizes connected digital devices, machinery, and systems to continually collect, organize, and share data across a network. This data is useful for making decisions and keeping the flow of production moving at an optimal pace without any shutdowns or unplanned downtime.

When you have a SMART factory, you can use new technology like data analytics, robotics, the Internet of Things (IoT), and cloud computing to improve operational efficiency and manufacturing workflows. When everything is connected, your factory can become a leader in production and productivity.

The Benefits of Investing in a SMART Factory

There are many benefits to investing in a SMART factory. SMART factories are not only prepared to advance into the future, but they also set you up to have more agile and adaptable systems that monitor costs and create more profitability. In fact, the benefits of a SMART factory outweigh the costs of the investment that it takes to get to that level.

Creates a Leaner Process

A lean manufacturing process focuses on reducing waste and increasing efficiency. By reducing the amount of wasted resources, time, and workforce hours, you can then increase the overall efficiency of your manufacturing organization. It’s also better for the supply chain and the environment, as there is less waste and more utilization of the materials you already have.

Provides Maximum Flexibility

Flexibility and agility are important factors that manufacturers need to consider when it comes to growth and stability. As new technology is created and implemented, it’s important that factory owners bring these changes in without disrupting the flow of operations. When you have a SMART factory, you have a flexible mindset that embraces new ways of doing business rather than fighting them.

Makes Predictive Maintenance Easier

Predictive maintenance is the process of being proactive with machine monitoring and maintenance to avoid major shutdowns and errors that slow production and decrease efficiency. When your machines and processes are part of a SMART factory, they are connected to a system that can more accurately monitor and observe their functions to make predictive maintenance easier to accomplish.

Fosters Greater Productivity

Utilizing all of your assets is the best way to increase productivity in your factory. When your employees don’t spend their hours as productively as possible and your systems have unnecessary hold ups, it can lead to less productivity in your entire organization. When you have a SMART factory, you can gather better insights into your organization’s effectiveness and make sure your assets are being used in the most productive ways.

Useful Tools for Creating a SMART Factory

While there are many benefits of having a SMART factory, it can’t happen overnight. To achieve these benefits and embrace the SMART factory mindset, you need to have the right tools to get you to the next level. These technologies include tools like:

SMART Sensors

Sensors are an important part of a SMART factory. SMART sensors attach to your devices and machines to collect real-time data from your equipment and monitor their processes. This includes things like utilization, temperatures, production numbers, and operator errors. Sensors can also self-correct some of these problems or alert your factory employees when an issue arises so it can be addressed immediately.

Cloud-Based Software

As data is collected, it needs to be organized and stored properly. Cloud computing software processes and stores the data collected by sensors. Rather than storing all of the data in expensive on-site servers, the cloud will hold the data and make it easy to access for feedback and decision-making.

“Big Data” Analytics Technology

Once your data is collected and stored, you need to be able to go through it and collect important data analytics. The data you collect will provide important insights into your processes and allow you to understand more about error patterns, quality assurance, and actionable items. This allows you to make better decisions and plan more accurately for growth.

Digital Twin

A digital twin is a method of representing processes and physical objects in a digital simulation. This digital simulation can be used for testing without you needing to change anything in the physical world. With the help of digital twins, you can improve efficiency and help control operations planning.

Virtual Reality and Augmented Reality (VR & AR)

Virtual reality (VR) is an immersive experience that puts you in a virtual world. Augmented reality (AR) is a digital technology that overlays digital information over reality. These technologies are being utilized in SMART factories to organize products, manage production tasks, and monitor and repair equipment.

The 4 Levels of a SMART Factory

The process of becoming a SMART factory can be broken down into four levels. Understanding each of these levels can help you map where you are on the digital transformation scale and evaluate what progress you need to make to fully transform into a SMART factory.

1. Available Data

Most factories exist in this first stage of available data. In this stage, data is available, but it isn’t being utilized or accessed properly. Any sort of data analytics requires manual work and is both frustrating and time-consuming. This can add inefficiencies to production processes that aren’t necessary.

2. Accessible Data

The second level of a SMART factory is accessible data. In this stage, data is presented in a much more digestible format. It is organized in a structural manner and can be stored and sorted in a single location with the help of digital tools and technologies. It can also be displayed visually on dashboards for easy access. However, there is still a significant amount of time and effort required in order to perform a data analysis.

3. Active Data

The next level of a SMART factory is active data. In this stage, data that is collected can be used in proactive analysis with the help of machine learning and artificial intelligence, rather than manual processes or simple display dashboards. These technologies help to identify problems or patterns that aren’t readily distinguishable by humans and manual data examination. The SMART systems in place will identify issues and anomalies to help prevent future errors while giving you valuable insights.

4. Action-Oriented Data

The final level of a SMART factory is action-oriented data. Here, machine learning not only notices patterns and errors, but identifies actionable solutions to any problems. Because all the machines and devices are connected together in a system, you can implement these changes without any direct action by a human. This means that data is collected, issues are identified, and solutions are generated and implemented without human intervention.

How to Transform Your Factory Into a SMART Factory

In order to become a SMART factory, you need the right tools by your side. Amper offers a noninvasive IoT production monitoring solution that helps you automate production, collect real-time data with helpful dashboards, and reduce unplanned downtime. With Amper, you’ll get the tools you need to track, improve, and run your factory. Book a demo today and see what Amper can do for your factory!


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