Smart factories need smarter supply chains

Automated manufacturing facilities will require higher levels of logistics integration.


It’s been just three years since Germany’s Federal Ministry of Education and Research coined the term “Industry 4.0” to describe a manufacturing and assembly process closely aligned through interconnected machines. Also known as the Fourth Industrial Revolution, the next evolution of manufacturing has arrived with the promise of increased efficiency, productivity, and quality control achieved by synchronizing industrial automation equipment to perform at levels seldom seen today.

Everything from fixtures and assemblies to complex finished goods production can benefit from Industry 4.0. Business size and complexity is no longer a barrier to using industrial automation equipment that speeds production and improves quality control. Even small and emerging businesses are investing in automation and robotics to streamline and grow their companies.

According to the Robotic Industries Association (RIA), the number of robot units ordered from North American companies increased 28% from 2013 to 2014. The number of robots shipped to North American companies increased 13% in the same period. It’s just a matter of time before the hardware and software that link this equipment together on the factory floor is applied for a more seamless and flexible production line.

When that time comes, the visibility of inbound and outbound supply chains will be put to the test. Factories will need higher levels of visibility for inbound raw materials and parts to protect against materials shortages. Outbound order-tracking will become more important as production schedules are further refined to align the assembly process, manage multiple production and distribution locations, meet customer deadlines and just-in-time delivery, and minimize overproduction.

The industrial Internet of Things

Wholesalers, retailers, and consumers also will be impacted by these technological advancements. Data currently available through smart labels, for example, will continue to be captured and tracked. Their role will become increasingly important at every phase of the manufacturing and distribution process.

Real-time visibility of inventory during transit and warehousing will allow companies to make better-informed decisions for increased operational efficiency. This system-wide intelligence also would improve customer service by minimizing out-of-stock items and enhancing inventory optimization between different geographic markets.

Custom approaches come standard

Automating production lines will require a more complex system of sensors and control software that synchronize the facility’s machinery. In addition to a single machine’s ability to detect small reductions in performance, the adjoining machines also would be able to detect variations in production or assembly performance, based on the speed that items are dispatched from one machine to another in the assembly line.

This machine-to-machine, or networked, communication makes the fully automated system substantially more powerful than the individual machines.

The higher level of efficiency should require additional emphasis on the facility’s preventive maintenance and service programs. Service agreements will no doubt evolve with more stringent requirements for responsiveness and reduced unplanned service outages. In turn, increased importance will be placed on field stocking locations and ready access to skilled technicians who are well-equipped to keep production on-line. As part of this, when the automation sensors and control software detect reductions in machine performance, they would alert the system manager of unplanned maintenance before an issue arises.

In many places where preventive maintenance is critical to operational efficiency, including UPS, these technologies and processes are already in use. The experience of these industry pioneers will help incorporate Industry 4.0technologies and practices into the marketplace.

For example, industrial automation equipment linked by technology enables UPS’s Worldport distribution center in Louisville, Ky., to sort 1.6 million packages on an average day, and as many as 5 million packages in a single day during peak periods. The ability to process large volumes quickly is being applied in smaller warehouse and distribution facilities around the world. In each case, automation technologies are using interconnected systems to access data from smart labels to increase productivity while reducing the physical size of the facility.

The flexibility and operational efficiencies promised by smart manufacturing will revolutionize manufacturing and distribution processes as we know it. The only question is, when will this take place? As the speed of business continues to accelerate, it will most likely be sooner than many people expect.

Charlie Chung is the industrial assemblies and machinery marketing manager for the Industrial Manufacturing and Distribution segment at UPS. 

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