Five smart factories – and what you can learn from them

Five smart factories – and what you can learn from them

Amazon and Adidas aren’t the only success stories in smart manufacturing, says Kayla Matthews. Whirlpool, Siemens, HP, Hirotec, and Ocado are all redefining industrial processes in new and innovative ways. What are the key lessons?

Today’s customers want goods made to their specifications, and they want them the next day.

Smart factories and increased automation are one solution for manufacturers that need to drive their innovations faster – not just to keep ahead of competitors, but also to keep pace with customer demands. [Sean Culey’s excellent analysis of PAL value chains explores this topic in depth for Internet of Business.]

READ MORE: How PAL value chains use the IoT to transform manufacturing and logistics

“Thanks to digitalisation, the rollout time of new products can be cut by 25-50 percent and engineering costs can be reduced by up to 30 percent,” says Klaus Helmrich, management board member at Siemens. “Meanwhile, energy savings can increase by 70 percent.”

There are other benefits, too. A global McKinsey survey of business leaders found that 53 percent of respondents believe efforts to operate more sustainably play a key role in worker retention.

However, due to smart factories’ reduced dependence on human labour – and the evolving roles of employees – companies also experience less downtime associated with injuries, fatigue, accidents, and illnesses.

The data angle

As with all aspects of the IoT, smart factories are as much about generating data and analytics – including predictive workflows – as they are about making physical goods.

“As we begin to see the impact of the constant stream of data that is used to connect operations and production systems, we’re gaining end-to-end visibility of the order lifecycle in supply chains,” says Brad Stewart, president of Rockfarm Supply Chain Solutions. “The result: lower costs and an enhanced customer experience.”

Connected factories can highlight outmoded or cumbersome practices, too. “Smart technologies provide visibility over each segment of the supply chain, from customer order patterns – which deliver optimal production schedules and inventory management – to generating delivery windows for the customer,” says Stewart.

“The bonus for manufacturers is the connectivity inherent in smart technologies. Real-time visibility creates the flexibility to mobilise the supply chain to meet peak demand, or unplanned events.”

Case studies

That’s the theory, at least. But who – apart from familiar examples, such as Amazon, Nike, and Adidas – is putting it into practice?

Here are five companies that are finding new levels of success with smart factories and other automated facilities.


Appliance manufacturer Whirlpool set itself a goal of eliminating the waste that its factories send to landfills by 2020.

To help meet that objective, the company began using an analytics platform across all of its facilities to reveal the amounts of waste they generate, along with usage data about electricity, water, and more. This data is available via customisable, Web-based dashboards.

In addition to retrieving local information, the company can check the sustainability performance of its plants worldwide.

This is a prime example of how a company looked for the right intelligent tools to match its strategic goals: strategy first, followed by supporting technology.

Whirlpool also demonstrates that having a global presence is no obstacle when linking plants together. Via the IoT and its analytics platform, the company can measure how close any factory is to the zero-waste milestone, no matter where it may be in the world.


Established in 1989, the Siemens plant in Amberg, Germany, is a prime example of a well-planned smart factory.

Siemens’ Helmrich picks up the story. “A good example of Siemens’ investment in new technologies is MindSphere, our cloud for industry,” he says.

“OEMs and application developers can access this platform via open interfaces and use it for their own analysis – for instance, the online monitoring of globally distributed machine tools, industrial robots, or industrial equipment, such as compressors and pumps.”

MindSphere also allows customers to create digital models of their plants using real data, he says.

More, workers are able to reprogram Siemens’ factory machinery in just one minute, he claims — a process that once took two hours.

As a result of these and other innovations over the years, Siemens has seen productivity rise tenfold and has achieved a 99.9 percent level of production quality.

“Siemens is focusing on reshaping processes with digitalisation, both for its industrial enterprises and its production operations,” Helmrich says.

“Siemens is the only company to offer the latest software, robust automation technologies, and services for the entire product lifecycle, all under one roof.”


Hirotec is a global auto parts manufacturer with annual revenues of over $1 billion. As a result, the company is well aware that planned downtime is a major challenge: one that can cost up to $361 a second.

Hirotec wanted to reduce downtime and the IoT helped it to achieve just that.

Hirotec has employed a mix of IoT and cloud-based technologies, along with small, robust servers on its factory floors. These generate analytics data without sacrificing physical space.

Meanwhile, machine learning helps the company to predict and prevent systems failures. After running three pilots of its IoT platform and reviewing the data, Hirotec was able to achieve a 100 percent reduction in manual inspection time for its systems.


When HP split in two, it opened a 6,000-square-foot facility in Singapore devoted to smart manufacturing applications and research, signalling that it was entering the smart manufacturing sector for the long haul.

But this is merely the first facility of its kind for HP. The tech giant now hopes to use the knowledge gained from its operations in the country to boost productivity by 20 percent or more.

HP remains focused on development, too. Eventually, it may be able to both increase and supplement its profits by developing new industrial technologies and selling them to others in the space.


While not a manufacturer in the traditional sense, Ocado is the largest online-only grocery delivery company in the UK and uses many of the same industrial processes.

The company’s warehouses are heavily automated, with robot arms that can pick produce and other robots than can pack and shift boxes faster than humans can. Ocado is also investing heavily in self-driving vehicles to deliver goods to customers.

Meanwhile, its SecondHands programme is developing robots to work alongside humans – ‘cobots’ that can learn and predict employee actions. In January 2018, Ocado demonstrated its prototype ARMAR-6 robot, the first fruits of this internal programme.

An important lesson here is how Ocado has gradually increased its reliance on smart technologies.

Some business leaders may feel overwhelmed at the prospect of investing in smart equipment and – as Internet of Business’ Sean Culey suggests in his extended report – completely reinventing their processes for the ‘PAL’ age.

But they can follow Ocado’s example by realising that incremental change is not only achievable, but also necessary, in support of clear strategic goals.

Internet of Business says

Despite real concerns about long-term employment prospects for human beings, smart factories make sense in a world that needs to balance changing customer demands with environmental, sustainability, and logistical impacts. Smart factories can only get smarter, faster, and more efficient over time, and this will help to reduce organisations’ carbon footprints, especially when facilities are located near the mailboxes that need filling and the mouths that need feeding.

And when combined with sharing-economy models that reinvent warehousing for the new industrial age – using the on-demand, Airbnb-style model pioneered by Stowga, Flexe, and others – Sean Culey’s PAL model moves ever closer to becoming reality. But it’s important to state that robotics, AI, and connected devices will create new, skilled jobs, as well as automating repetitive manual processes.

Kayla Matthews is a senior writer for MakeUseOf, and a contributing writer to Marketing Dive, Manufacturing Business Technology Magazine, and You can follow her blog Productivity Bytes for more.