What Are the Characteristics of a Smart Factory?

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In one of our blog posts, we defined what a smart factory is and the factors that have led to its creation. But, just because a factory is automated and uses the technologies mentioned in the last post, does that make it smart? Deloitte has identified the five key characteristics of a smart factory – read on to learn what it takes for a factory to be truly intelligent.


Connectivity is a crucial feature of the smart factory. Equipment in smart factories is connected to networks so it can transmit information. This data is transmitted in real time.

Real-time data transmission enables a few outcomes, including the ability of manufacturers and suppliers to collaborate quickly and effectively. Moreover, internal collaboration (between departments) can take place because a single source of truth eradicates data silos.


Everyone wants to optimize their manufacturing operations, but what does it mean in relation to smart factories? Deloitte defines optimization in this way: a factory with reliable, predictable production capacity, increased uptime and production efficiency, and minimized cost of production and quality.

How do you attain an optimized factory? The answer is through automation. Smart automation dramatically reduces the need for human intervention, which reduces the amount of errors.


One of the problems with traditional manufacturing is that data is difficult to access. Moreover, there are data silos, which leads to questions about which source is the most accurate.

Smart factories are transparent. You can see what’s going on at your factory – there’s no more having to guess. Data is available in real time, so you can see which customers have placed orders and what customer demand will look like in the near future as well as the medium-term.


Another feature of smart factories is that the technologies within them enable humans to be proactive. Manufacturing equipment is being trained by computer scientists to identify anomalies in raw materials as well as finished products. In addition, sensors in smart factories can not only tell you that components for products are running low – they’ll automatically place an order when inventory dips below a certain level.

Proactive factories allow you to stop problems before they start. That’s the very definition of smart.


The fifth and final feature of a smart factory is that it’s agile. What does it mean to be agile?

Agility means being able to quickly respond to changes. Agile smart factories have configurable factory layouts and equipment to respond to changes in production needs. It’s easy to make scheduling changes and changeovers, and manufacturers can see the effects of production changes quite quickly.

Smart factories don’t happen by accident. You don’t create a smart factory simply by implementing these technologies, either. They’re designed with intention – manufacturers make choices to create smart factories and don’t rely on luck or fate. As a result, they have a competitive advantage over others in the market and can satisfy customers better than their peers. That is very smart, indeed.

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