From vision to reality: Harnessing cloud ERPs for smart factory success

Smart factories represent the next frontier in operational performance, combining human ingenuity, advanced technologies, and data-driven insights. At the heart of this transformation lies data and its analysis. Data is the lifeblood of a smart factory, and its exponential growth necessitates a viable conduit to ensure seamless flow. 

The smart factory revolution 
Smart factories represent a paradigm shift in manufacturing and supply chain functions, driven by technologies like the Industrial Internet of Things (IIoT) and artificial intelligence (AI). These factories integrate collaborative manufacturing systems that respond in real-time to changing demands and conditions, encompassing the entire production process, supply network, and customer needs. They enable increased visibility, agility, and resilience, leading to more efficient supply chain models and overall business operations.

Data is the driving force behind smart manufacturing's optimization, resilience, adaptability, and agility. Cloud connectivity is crucial for seamless data flow across the smart factory, providing real-time information and enterprise-wide visibility. Operational data grows exponentially, and cloud-based solutions ensure the viability of smart factories by facilitating data harnessing, analysis, and scalability. 

To embark on this transformative journey successfully and optimize data, manufacturers must embrace cloud-based modern Enterprise Resource Planning (ERP) systems. 

The importance of cloud-based ERPs
Cloud-based ERPs are fundamental to the success of smart factories. They act as the central hub for collecting, maintaining, and sharing operational and financial data. By modernizing ERPs and migrating them to the cloud, organizations can unlock the full potential of smart factories. Cloud ERPs enable the application of AI and machine learning to operational data, offering end-to-end visibility and scalability for smart factory initiatives.

How smart factories work
Smart factories combine human creativity, digitally connected machines, assets, and AI-powered analytics. This integration enhances adaptability, customization, and productivity based on real-time data and insights. Smart factories leverage technologies like IIoT, AI, and analytics to improve visibility, agility, and resilience throughout the supply chain, driving efficiency and operational excellence.

Smart factory technologies can be broadly categorized into three areas:

• Cloud-scale data management and analytics: These technologies leverage predictive intelligence and forecasting capabilities, enabling end-to-end digital continuity from design to operations. Examples include digital twin and closed-loop engineering design.
• Connectivity: Leveraging IIoT, this category focuses on collecting data from existing equipment and new sensors, facilitating real-time monitoring and decision-making.
• Intelligent automation: This includes traditional automation systems like plant control systems and MES, as well as IIoT-enabled automation technologies such as machine vision and drones.

The closed-loop optimization paradigm
A key aspect of smart factories is the closed-loop optimization paradigm. It involves continuous procedural improvement, self-correction, and self-optimization to enhance productivity, adaptability, and safety. The goal is to enable the factory to self-optimize performance, adapt to changing conditions in real or near-real time, and autonomously run entire production processes.

The closed-loop optimization paradigm of a smart factory comprises three iterative steps:

1. Data acquisition: Leveraging IIoT and modern database technologies, valuable data from various sources is collected across manufacturing and supply chains. This data includes operational information, market trends, logistics, and more.
2. Data analysis: Through machine learning and AI, the gathered data is analyzed to derive actionable insights. This analysis enables predictive maintenance, pricing intelligence, customer experience improvements, supply chain planning, and scheduling.
3. Intelligent factory automation: Optimized workflows are determined based on data analysis results, and instructions are sent to machines and workers. This automation enables enhanced productivity, adaptive decision-making, and optimization across the factory, logistics, and aftermarket services.

Use cases for cloud ERP
Cloud-enabled ERPs bring significant value to smart factory initiatives. Some key use cases include:

• Kickstarting a smart factory by integrating ERP with systems like CAD, PLM, MES, and CRM for holistic decision-making.
• Conducting integrated business planning to maximize profit, reduce resources, and minimize risks.
• Transforming ERPs into self-learning knowledge systems, optimizing decision-making and manufacturing processes.
• Improving equipment performance through real-time monitoring, predictive maintenance, and transitioning to a predictive maintenance paradigm.
• Bridging intelligence gaps through IoT, AI, ML, and ERP integration, enabling new business models like servitization.
• Enhancing product quality through ML-enabled tracking and tracing capabilities, enabling closed-loop product design.

Smart factories represent a transformative journey for manufacturers, and cloud-based ERPs are the foundation of their success. By embracing cloud ERPs and leveraging smart factory technologies, organizations can achieve operational excellence, scalability, and rapid innovation. With data at the core, smart factories empower manufacturers to navigate the digital landscape and thrive in an increasingly competitive market.

See the results when a manufacturer that was running a 30-year-old legacy ERP solution moved to Infor CloudSuite Industrial as its digital platform for the future.