Factory of the future will reduce conversion costs up to 40%: BCG

Study finds leading manufacturers focus on modular production, advanced analytics, smarter robots, augmented reality.

December 6, 2016   by PLANT STAFF

DUSSELDORF, Germany — Manufacturers who invest in the factory of the future now can look forward to saving 40% of their conversion costs in 10 years, says a study from The Boston Consulting Group.

But they’ll have to adopt modular production concepts and new technologies, as well as optimize their processes, according to the findings of the 2016 Factory of the Future Study, conducted with the Laboratory for Machine Tools and Production Engineering at RWTH Aachen University, in Germany.

“The factory as we know it today will change radically: assembly lines will be replaced by flexible manufacturing islands, and work pieces will communicate even more extensively with production machinery,” says Daniel Küpper, a BCG partner and head of the firm’s Innovation Center for Operations.

BCG said more than 750 production managers from leading companies worldwide took part in the study, which focused on the automotive, engineered products, and process industries.

The factory of the future requires an investment of 13% to 19% of one year’s revenue over 10 years.

Many of the companies have already begun transforming their plants: 74% of respondents have implemented elements of the factory of the future or plan to do so within the next five years, but 25% reached their related targets last year.

The study notes flexible plant structures are becoming increasingly significant in the automotive sector. Most (92%) of automotive respondents see modular line setups key by 2030.

“The growing complexity is the central challenge of production. The factory of the future will have to handle a much larger number of product variations, while at the same time increasing productivity,” says Küpper.

Eight-five percent expect smart robots to be highly relevant in 2030 and 72% anticipate the same for big data and analytics. Sixty-five per cent cited the importance of augmented reality in vehicle assembly, where, for example, a worker wearing smart glasses is guided through work processes step by step and notified of any assembly errors or safety hazards. Other advanced technologies include digital plant logistics and 3D production simulations, which will enable leaner production and faster reaction to more complex customer needs.

Kupper said the factory of the future is not just a job for production but for all functions in the company if it’s to be successful, and it will need a powerful, secure IT infrastructure.

“Additionally, employee qualifications are key to the transformation agenda. However, 38% of automotive respondents see employee skills as a major challenge,” he said.

Click here to download the study.

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