SMEs need the digital factory now more than ever

Global pressures on manufacturing are changing the landscape, but digitalization can help give SMEs a competitive advantage.

Autodesk has sponsored this post.

(Image: Autodesk.)

(Image: Autodesk.)

Although digitalization efforts have been ongoing in manufacturing for decades, there are still numerous businesses operating on old, analog processes. Walk into a small job shop anywhere in North America and you’ll likely see paper invoices, bills of materials and maybe even Post-it notes with operator reminders or machine settings.

Between inflation, rising interest rates and a scarcity of qualified labor, digitalization is nowhere near the top priority for many small- and medium-sized enterprises (SMEs).

But maybe it should be.

As it turns out, deploying a digital factory as a SME could be exactly what’s needed to reduce costs, increase production efficiency and gain an edge over the competition. To see why, let’s start with what a digital factory is — and, more importantly, what it isn’t.

What is a digital factory?

The concept of a digital factory is essentially the integration of various digital tools across the entire manufacturing lifecycle. The goal of this integration is to improve production efficiency by digitizing and automating processes, including data collection and analysis. When it works, a digital factory enables a manufacturer to adapt to changing market conditions quickly, reducing costs and increasing revenue as a result of this enhanced agility.

The digital factory may be easily confused with the concept of a smart factory but, as Rohit Auluck, industry strategy manager for mobility and transportation at Autodesk explains, there are important differences:

“From our perspective, the digital factory includes everything involved in designing, building and operating a factory. That means not just the building and the equipment, but the people and processes. In contrast, the smart factory is much more focused on the operational side of gathering data and using that to make process improvements. The digital factory is a more holistic approach.”

The threshold for what counts as a digital factory is thus much higher than that for a smart factory. In the latter case, it could be enough to have some basic data collection and a few closed loops to count as a smart factory. Nevertheless, digital factories and smart factories both depend on data —not just collecting it, but storing and sharing it as well. This brings up a related concept: the industrial cloud.

Typically, the various teams working in a factory tend to be siloed in their functions —quality, manufacturing, logistics, etc. — as is their data. By collapsing those siloes together into an industrial cloud, manufacturers can aggregate their data across these functions for better decision-making.

“An industry cloud also gives you access to capabilities that you might not have with just a standalone, on-premise offering,” Auluck says. “If you need something like simulation, being on an industry cloud allows you to get as much of that capability as you need.”

The last concept worth touching on when it comes to understanding the digital factory is the digital twin. As Auluck pointed out, this is a term with a lot of confusion around it, primarily because it applies to multiple levels of explanation. “The digital twin could be at the supplier ecosystem level, providing a picture of everything that’s going on, or it can be a specific piece of equipment in a single plant,” he says. “We say that there are different maturities, different types, of digital twins.”

In logical terms, a smart factory, an industrial cloud and digital twins contribute to implementing a digital factory but they’re not sufficient alone. What’s missing is a holistic view of the entire manufacturing operation, facilities, equipment and personnel. That’s the digital factory.

Deploying a digital factory

So, what does a working digital factory actually look like? Auluck has a couple of examples to offer.

“When Porsche developed their new Taycan factory, they used our tools across the design, build and operate stages,” he says. “They also used high-end visualization tools that are photorealistic, which made it easier to sell their vision of the factory to senior and other internal stakeholders before starting anything, and there’s huge value in that.”

Porsche Taycan factory in Stuttgart, Germany. (Image: Autodesk.)

Porsche Taycan factory in Stuttgart, Germany. (Image: Autodesk.)

The Taycan factory is the largest construction project in the Porsche’s history, with every aspect of it, from robot positioning to the placement of garbage cans, developed and approved through digital planning. Moreover, the digital-coordination model used to build the facility will serve as a foundation for ongoing operations and maintenance.

Another example comes from the German company Viessmann Climate Solutions, which recently invested €200 million in the construction of a new heat pump factory in Legnica, Poland. Digital factory planning played a crucial role in the Legnica facility’s design and construction, enabling the company to collaborate with external contractors in real time.

Viessmann used the digital factory as a single source of truth, converting the 3D factory model into a digital twin to assist with facility management, maintenance and operations. In this case, the digital factory helped Viessman avoid planning errors and minimized the amount of necessary rework.

Digital factories for SMEs

The examples above involve greenfield investments: new facilities that can incorporate the digital factory across the three stages of design, build and operate. But it’s not only these sorts of projects that can benefit from digital factories. Brownfield investments have something to gain from digitalization as well, especially when it’s done incrementally.

“If we take Fusion, as an example, it’s not a single capability: it’s got CAD, CAM, PDM and PLM, which works well for SMEs because they don’t need top-level capabilities every time,” Auluck explains. “They just need enough to be dangerous, so they can pick and choose their own adventure, which is more cost-effective for them.”

Of course, the drawback to having so many possible paths is trying to determine which one to take. For many companies, the biggest challenge with implementing a digital factory is deciding where to start. In such cases, Auluck’s advice is simple: “Don’t try and bite the whole thing off at once, because it’s not an off-the-shelf product, it’s a journey specific to your business. Start where you’ve got some data, and where you currently have an issue.”

A digital factory can be enormous, but by starting small and focusing on areas with known challenges, an SME can make an incremental digital transformation. “If I’m using paper today and I move up just one level on the digital maturity stack,” says Auluck, “that might improve my process by 50%. I can then target the next stage to incrementally mature.”

The message for SMEs considering digital factories is clear: identify where to start, execute and scale gradually.

To learn more about Autodesk digital factory solutions, visit this page