Market demand will shape the factory of the future

The factory of today is on its way to becoming the factory of the past—and we shouldn’t be surprised by this.

Several trends and technologies are converging that will change the way factories operate. The new breed of factories will adapt to meet new market demands, and the resulting change will be beneficial not just for manufacturers but also consumers.

However, before we can understand where factories are going, it’s helpful to look at where they are today. A typical automotive plant is a good example of the way factories currently operate. For example, they are typically set up to have economy of scale on a very limited range of models. The factory has dedicated tooling, equipment, and other resources that are specific to certain car models.

However, with this type of set-up the factory doesn’t necessarily produce what the market is demanding—it produces what it has been set up to produce. As a result, you have a certain amount of inefficiency built into the marketplace: the auto manufacturers can barely keep up with production for popular hot-selling models, and on the other end of the spectrum, they can barely give away models that aren’t selling.

Modularity, flexibility and reconfigurability

In order to improve upon this model of production, the factory of tomorrow needs to exhibit greater modularity, flexibility, and reconfigurability. In a smart automotive factory for example, the equipment is flexible and adaptable so that it can be quickly changed over to manufacture multiple models within the same factory. Intelligently managing the flow of materials to the markets means companies will be able to produce something that’s much closer to market demand.

The above scenario isn’t as far-fetched as it seems. The rise of the Maker Movement, and of the Maker, speak to the growing appeal of smaller batch manufacturing. The companies that are best able to meet that market demand for individualised, personalised products are going to be the ones who will thrive in this kind of an environment.

For a consumer products manufacturer, it means that instead of producing 100 million smartphones a year that all look virtually the same, they will now offer a high degree of customisation and build phones to customer specifications. Potentially, no two phones would be the same. In order to meet this “small batch production” trend head-on, the factory of the future will become more decentralised and able to flex far more efficiently to meet consumer demand. One way this will be achieved is through more local manufacturing. We used to know the people who made our products, and consumers are seeking to regain that “personal” connection to the products they buy.

Urban manufacturing

Small batch manufacturing also means more urban manufacturing. The availability of 3D printing and other additive manufacturing technologies allows for spaces that normally wouldn’t have been appropriate for a manufacturing facility—say, a small office space in London or a room in an apartment—to function perfectly well as a small-scale factory. We may also see several different small batch manufacturers organised as communities and co-located in urban manufacturing hubs—a very different kind of vertical organisation from what we typically see today.

The trend towards producing closer to the point of use makes sense not only from an economic perspective but also from an ecological perspective, given the lower transport costs, fuel costs, and other environmental factors. When we consider that, if it were a country, shipping would be the sixth largest producer of greenhouse gases, there’s certainly a strong case for looking at changing our processes for the future.

Similar gains can be found on the factory floor too, as sustainability can be something as easily identifiable as energy consumption. Today’s factory typically has a large amount of equipment on the plant floor that runs continuously whether or not it’s being used, because shutting it down and then booting it back up takes too long or is too tortuous of a procedure.

The factory of the future is going to have a more dynamic approach, with demand management systems and energy management systems in the plant that provide feedback at the micro and macro level. These systems can help the plant owners analyse when the optimal time to operate equipment might be, or whether the equipment can be designed in a way that it can be quickly shut off and brought back online without negative effects on production.

However, to design for any type of sustainability, the factory of the future will need to have digital model counterparts that allow them to optimise the factory layout virtually before it is built physically in the real world. Crucially, those digital models will accept data feeds from the real world that will allow them to monitor the overall health of the factory in terms of various sustainability metrics and then aggregate the data.

More dynamic

The factories of today are poised to become the smart factories of the future by becoming more dynamic and decentralised, as well as more flexible, adaptable, and reconfigurable. This will allow them to produce a wider variety of products from within the walls of a single factory; embrace smaller batch manufacturing that delivers more personalised and individualised products from closer to home; and make sustainability more of a factor in manufacturing. The tools are already available to support this type of understanding and analysis of new and existing factories, and now is the time for businesses to consider how they can make changes to their manufacturing practices.

In accomplishing these goals, factories are merely doing what successful businesses have always done: give the market what it is asking for. Those that don’t risk getting left behind by this latest wave of manufacturing.