Digital factory – still a long way to go

The term digital factory can mean a lot of things. So, before discussing the reasons behind our view that there is still a long way to go for manufacturers, we would like to provide a clear definition of what we mean by this buzz word. 

PAC prefers to use the term digital factory to describe the current digitization wave around manufacturing processes. A digital factory uses both integrated cyber-physical production systems as well as smart products and services to become highly efficient. This covers the improvement of internal production processes, intralogistics and the supply chain, as well as the delivery of smart products and services to help others in realizing a digital factory.

So, why do we think manufacturers still have a long way to go in this regard?

In a recent report, PAC evaluates several use cases in the context of the digital factory, which – in our view – have the highest relevance for this field. These are:

  • Predictive maintenance
  • Connected worker
  • Smart intralogistics
  • Digital twin
  • Traceability
  • Digital quality control
  • Mass customization
  • Products as a service

This list of use cases summarizes many relevant use cases in this space; it should, however, not be seen as an exhaustive list and can certainly be broken down into more detailed use cases. For each of the above-mentioned use cases, PAC did an evaluation of their strategic relevance for manufacturers, their level of maturity as well as expected speed to adoption. 

Digital Factory classification use cases

What we found is that all the uses cases differ quite substantially in all three categories: for example, even though projects around the “digital twin”, “mass customization” and “products as a service” offer a great potential for companies to achieve a real competitive advantage, it must be considered that their implementation and realization is very complex. It is for this reason that their level of maturity is currently still very low; also, their speed to adoption is expected to be slower than for other use cases in the digital factory space. Thus, despite the high potential these three use cases offer in terms of a competitive advantage, their high complexity means that some more time will have to pass until we will see wide-scale adoption.

For manufacturers aiming to realize short-term benefits, use cases around “predictive maintenance”, “connected worker” and “digital quality control” are far more suitable, due a lower complexity and focus on what is called the “low-hanging fruits”.

For a more detailed analysis of this topic, we would recommend taking a look at our full online report (subscription-based).