In 2019, the World Economic Forum (WEF), in collaboration with McKinsey, identified 16 “Lighthouses,” beacons of learning that are leading the way in global manufacturing with Industry 4.0 technologies that advance operational efficiency, environmental sustainability and workforce engagement. Recognizing that digitization is no longer an option but a necessity for the future of manufacturing, both WEF and McKinsey set out to bring these smart, or virtual, factories into one greater community called the Global Lighthouse Network.
The goal is to further support and promote a new era in which virtual reality is used in collaboration with humans, artificial intelligence and robotics to increase production, improve predictive equipment maintenance, enhance worker safety and more. In March 2022, WEF announced the addition of 13 new members to its network, bringing the total of advanced manufacturing sites and value chains to 103. The criteria for inclusion: each must possess “all the necessary characteristics of the fourth industrial revolution, including automation, industrial Internet of Things (IIoT), digitization, big data analytics, fifth-generation mobile communication technology (5G) and other technologies.”
The transition to 5G is also becoming a cornerstone of the virtual factory. Thanks to the higher bandwidth, low latency and the increased reliability 5G brings, more organizations are building out private 5G networks to enable more advanced IoT applications that utilize virtual reality (VR) and augmented reality (AR) technologies. 5G’s lower latency, in particular, helps enhance the ability of machines to detect abnormalities in components, send alerts and stop conveyor belts in real time, with sensors responding within milliseconds. Factories are also able to visualize the workings of a machine right down to sub-processes. They can synchronize each movement to the millisecond and change timing to increase operational efficiency.
The benefits of building a virtual factory are numerous. This design itself ensures that systems can quickly be deployed, scaled, rearranged and even relocated, as well as integrated with both legacy and new assets. With connectivity and interoperability as key elements, information and data can be shared in real time between the production floor and all throughout the supply chain to the customer. With autonomous decision-making machines and other elements, such as sensors and embedded modules, the entire factory becomes decentralized.
Real-time data collection and analysis is key to empowering the virtual factory. In fact, the success of most IIoT projects depend on how well an organization can collect timely data from machines and systems on plant and shop floors, as well as combine it with information in the IT systems and make the data actionable for better business decisions. Better data can help businesses increase process efficiency and productivity, as well as eliminate unplanned downtime, reduce costs and risks, meet regulatory requirements, create new business models, keep employees safe and attract the next generation of workers.
Above all, organizations need the flexibility to change how data is collected, depending on the use case and environment—and without requiring developers to build custom code to create the interfaces connecting diverse components. The right technology can mask the complexity of connecting the factory or plant floor to IT systems. It shouldn’t take years to prove the value of operational data and what it can do for the organization. The system must be able to launch projects and realize tangible and desired results within a matter of weeks.
Deloitte’s 2022 manufacturing outlook report includes a survey of U.S. manufacturers, 50 percent of which expect to increase operational efficiency in 2022 with investments in robots and cobots, which work in close collaboration with humans. The report indicates an expected growth rate in AI investments of more than 20 percent per annum through 2025, with discrete manufacturing among the top three industries. It also underscores the important role Lighthouses play as leaders in showcasing “the art of the possible in bringing smart manufacturing to scale.”
In a PwC survey 2022 of more than 700 manufacturing companies across the globe, 64 percent said they are at the beginning of their digital transformation journey, with only 10 percent across the finish line. While progress is slow, industrial companies will invest $1.1 trillion a year on digital transformation solutions, which means it is a top priority. And for good reason. The survey results show that virtual factories are bringing in double-digit returns through cost efficiencies and greater flexibility. As we move closer to a fully connected digital world, manufacturing companies will be core to making the shift beneficial to economies, communities and consumers alike.
Ricardo Stefanato Buranello is the senior VP and head of IoT platforms at Telit. He has more than 16 years of experience in the technology and IoT industry. Before joining Telit in 2008, Ricardo worked for big technology companies such as Siemens and Totvs. With Telit, Ricardo held the position of head of business in Latin America, and in 2017, assumed the role of hlobal VP for Telit Factory Solutions, driving a significant growth for the business unit. Currently, Ricardo is the head of Telit’s Platforms Business Unit and is engaged in the creation and implementation of Telit’s platforms strategy, which enables some of the biggest companies in the world to deploy IIoT with advanced edge and cloud software solutions. Ricardo graduated from São Paulo Catholic University with a degree in business administration. He also has an MBA in business economics by FGV-SP and business extension program from NYU–Stern.