The State of the Connected Factory


Products are becoming more complex and unique, requiring significant changes to existing mass  production techniques. Global competition is pressing manufacturers to minimise or eliminate nonvalue – added activities and maximise uptime as well as reduce time-to-market in order to deliver  customised products that appeal to a wider customer base. Most of the advances in efficiency will come from optimisation of manufacturing protocols that arise from intelligent and flexible software systems. This optimisation will increase techniques such as predictive maintenance that arise from advanced data sorting and analysis. As these systems evolve, they will envelope and control more devices, leading to an increasingly connected factory. Automation component suppliers, end users, and those developing the software to connect it all will need to adapt in order to profitably accommodate increasing market demands.


  • Customisation of products will necessitate increasingly optimised factories.
  • Suppliers, end users, and software developers must standardise and adapt.
  • Manufacturing execution systems (MES) must be easy to both use and programme.
  • Opportunities and challenges still exist for software development companies,
    with Siemens leading the way.

The situation

The increase in M2M communication will force manufacturing facilities to evolve.

Global competition is pressing manufacturers to minimise or eliminate non-value-added activities such as set-up time, recipe validation, and quality issues. At the same time, consumers are demanding products that are more customised, which has upended many traditional mass production techniques. This dynamic has created a strong demand for a manufacturing execution system (MES), which can act as the backbone of a manufacturing operations management system (MOM) for one or many factories. Trends such as the Internet of Things (IoT) and big analog data are developing quickly, and factories must react aggressively in order to accommodate these increasing market demands.

vdc’s view

Exhibit 1: Type of industrial automation product, segmented by current intention to deploy M2M

Factories must focus on optimisation through software and automation to compete globally.

As the modern connected factory comes into focus, challenges still lie ahead. Many devices and systems are currently connected to industrial networks; however, they do not necessarily overlap or communicate in a way that fully realises their potential. Few companies have developed MES software solutions in order to accommodate this growing inefficiency within the marketplace. Enterprise MES initially were introduced as proprietary systems within niche industries, such as the pharmaceutical and semiconductor manufacturing sectors. As products become increasingly customised and more complex, more industries will need these software systems to handle MOM.

Siemens has emerged as the early leader within this space, boasting more use cases and customers than any other competitor. Siemens should dominate, as VDC estimates more than 80% market share for this type of software, which acts as a unified manufacturing operation backbone. Siemens recognised an emerging market opportunity arising from needs within the automotive and aerospace sectors and underwent a spate of acquisitions including LMS, TESIS PLMware, UGS, and Vistagy to
build a formidable strategic business unit.

With the pieces in place, Siemens has set out to build a domain-driven system in which operators do not need to possess a programming or IT background. This allows more people to use the system, which leads to increases in optimisation. As the use of these systems expands within leading automotive and consumer goods manufacturing organizations, so too does the benefit. Intelligent devices and systems will cooperate with classic automation in order to make the decisions and implementations necessary to ensure an optimized workflow. These efficiencies will lead to advanced decision-making ability that can react to trends such as seasonal changes in demand for consumer packaged goods or supply/demand cycles in the primary metals markets.

Challenges remain, offering opportunity for innovative software development companies.

Siemens offers a rather complete portfolio with out-of-the box solutions for virtually every industry; however, many challenges remain. One challenge involves events happening in real time vs. non-real time. Devices and components must be able to communicate in a “many to many” collaboration. This will allow devices to push information to other components in order to relay information such as configuration as well as reasons for the required configuration.

Another challenge, which may seem quite simple at first glance, is that of labeling. Labels are critical for record-keeping, compliance, design changes, and configurations. Without a label incorporating all of this information, the product will not ship. A multitude of systems including RFID must be involved in order to consolidate the appropriate labeling information, which can often incorporate thousands of touches along the design and production lifecycle. Eliminating or automating these thousands of interactions leads to immense savings for factories and plants. The use of RFID will increase; however, its adoption will require integrated MOM systems to support its full functionality.

Experimentation through software modeling is another solution that will offer value to manufacturers. A recipe transformation that can happen within a software suite and then be directly executable in the plant is a huge advantage. With the appropriate system in place, plants can swap materials and change equipment on the fly, which goes toward reducing the amount of non-value-added activities that manufacturers are looking to eliminate.


Suppliers should standardise.

Suppliers of PLCs, sensors, and other automation components should push to standardsze communication protocols as well as develop easily programmable software tools that can interact with other platforms. Using a standard and flexible software platform such as HTML5 or Java allows for applications to be easily replicated across a host of devices. Connection protocols such as WirelessHART, DeviceNet, and Ethernet IP will also play a role within this new evolution of products. In the past, suppliers would look to lock customers in to a particular environment. This paradigm has changed, and component manufacturers must now develop products that easily interact with a multitude of systems and devices.

Factories need to explore the new options.

The global manufacturing landscape is changing rapidly and end users, as well as the plants themselves, need to explore and employ these new technologies in order to stay competitive. Two factory models will emerge – the very large, such as the Tesla “giga” factory in Nevada, and the very small, such as the GE “micro” factory in Louisville. The Tesla giga-factory will focus on mass production, using the latest in automation techniques, in order to drive down the price of Lithium-ion batteries through pure scale and efficiency. The GE micro-factory will manufacture in a different way, using 3D printers from firms such as Stratasys to design appliances with unique features that cater to individuals and their lifestyle. A refrigerator that can automatically refill a Brita water filter is one simple example; however, the idea involves consumers being able to directly influence how these types of
products are designed.

Software developers must focus on usability.

Software developers who offer MOM solutions must focus on the ease of use in their systems. These MOM systems will utilise a multi-user approach wherein not all operators will necessarily have ITrelated skills. The same software systems and interfaces must be able to be used just as easily by the professionals on the shop floor, those in supply chain management, and C-level executives. Applications must be smooth, straightforward, and able to communicate with a multitude of components and systems. Trends such as IoT will drive this initiative as employees become more familiar with programming devices and interacting with computers and cyber-physical systems (CPS).


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