A L'Oreal factory

The digital industrial revolution is underway. Consulting, technology and outsourcing firm CapGemini recently announced its prediction that the global economy stands to increase by $500 billion in the next five years due to the use of smart factories. The results were collated in its “Smart Factories” report detailing the categories that are leading the adoption — and segments that are straggling behind.

To collect the data, CapGemini interviewed 1,000 executives between February and March 2017. Participants held positions of a holding director or above in companies that reported revenues of more than $1 billion. The research spanned six sectors: industrial manufacturing, automotive and transportation, energy and utilities, aerospace and defense, life science and pharmaceuticals, and consumer goods. Participants represented the U.S., U.K., France, Germany, Sweden, Italy, India and China.

The report depicted a landscape of companies quickly shifting their resources to underwrite the execution of smart factories. The researchers define these new, high-powered venues as deploying big data analytics, artificial intelligence and advanced robotics to improve productivity, quality and flexibility. Smart factories is also known as advanced manufacturing or smart manufacturing.

With the ongoing embrace of the new technologies and work processes, the researchers said that manufacturers expect their investments in smart factories to inject a 27 percent increase in manufacturing efficiency over the next five years, which would result in an additional $500 billion added value to the global economy. “The average automotive manufacturer could drive up to a 36 percent improvement in operating margin through improved logistics and material costs, equipment effectiveness and improved production quality,” said the report.

The consumer-goods segment is faring decently, according to the research. Of all the segments, it has the second-highest score of digital master ratings — five percent — after industrial manufacturing, proving that executives are investing in the supply chain and the professionals needed to run it.

That saidm many companies are still struggling to harness the full potential of smart factories. “Only 14 percent of companies are satisfied with their level of smart factory success and 39 percent said they were not satisfied and give themselves a low rating in terms of success levels,” said the report.

As the ongoing digitization of the global workforce spreads, companies should be compelled to introduce new training for the technology for improved satisfaction. “Respondents see automation as a means to remove inefficiencies and overheads, rather than jobs, so more than half (54 percent) of respondents are providing digital skills training to their employees and 44 percent are investing in digital talent acquisition to bridge the skill gap,” the report said.

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