Smart factories broadly refer to the fully connected and flexible production systems that leverage persistent data streams from connected manufacturing devices to learn and adapt to dynamic conditions. It represents a leap forward from traditional automation by allowing autonomous operation of entire production processes. The latest technology, including smart sensors and advanced robotics, allows next-generation interconnectivity between equipment, facilities, and processes across the value chain. IoT advances allow a new level of real-time data transmission and synthesis between smart devices and machines. The result: More efficient and agile manufacturing systems with less production downtime and better competitive advantages in the marketplace.
Canvass Analytics: reported an 85% increase of new leads by October 2020.
OTTO Motors: reported a boost in orders in June 2020 with more than 70% coming from Fortune 500 companies, including GE, Toyota, Nestlé, and Berry Global.
Fetch Robotics: saw a 64% increase in inbound inquiries during the first two months of the US Covid-19 crisis.
Bright Machines: is offering no-cost automation for up to a year as part of a three-year microfactory-as-a-service (MaaS) agreement with manufacturers producing equipment to help fight COVID-19.
Bright Machines: announced a Factory Resiliency Fund worth up to USD 50 million to support new customers with automation projects and future-proofing against future disruptions.
Uptake: is offering free predictive maintenance software to fleets of any size that transport essential items such as food, medical supplies, and personal wellness items.
Bright Machines: has developed a robotic COVID-19 test sample processing system to increase the number of tests per day while reducing risk of transmission.
By leveraging their capital and innovation capabilities while taking advantage of long-standing relationships with manufacturers, incumbents in the smart factory industry have captured considerable market size in each of these segments.
Of these seven segments, the data analytics, predictive maintenance, and advanced robotics categories are the most highly populated with disruptors and watchlist companies. Startups have been capable of capturing market share in these segments by leveraging risk-taking cultures to produce highly digitized products in a high-stakes physical factory environment to go head-to-head with established firms.
A number of startups are focused on data analytics, cloud networking, industrial robots, and factory automation hardware. Some disruptors have forged partnerships/collaborations with similar companies in Internet of Things (IoT), robotics, analytics, and other Industry 4.0 software providers to leverage their core competencies and capabilities, as well as with customers and integrators in strategic alliances.
SparkCognition is an AI analytics startup offering four deep learning product solutions: Darwin (automated model-building software), DeepArmor (AI-powered cybersecurity), DeepNLP (NLP solution), and SparkPredict (analytics solution utilizing sensor data). These products deliver actionable insights, predict machine issues via historical maintenance data, and provide security from cyber threats. These products can be deployed across multiple industries, such as manufacturing, defense, utilities, oil and gas, and aviation.
SparkCognition’s clientele comprises large companies such as Boeing, Hitachi, and British Petroleum. It has also built partnerships with Google for cloud platform services, Hewlett-Packard Enterprise to offer AI predictive maintenance on HPE Edgeline Converged Edge Systems, and OSIsoft to integrate SparkCognition’s machine learning technology with OSIsoft’s PI system to improve data and process data analytics. The company’s most recent funding round was Series D funding worth USD 123 million in January 2022 from March Capital, Doha Venture Capital, B. Riley Venture Capital, AEI Horizon X, and Temasek, and several others. The funds were intended to be used to invest in R&D, accelerate sales and marketing, facilitate organic and inorganic growth, and also for the working capital requirements of the company.
Most incumbents entered the smart factory market by introducing “Industry 4.0” Internet of Things (IoT) solutions. Some acquired smaller companies or formed partnerships to accelerate growth and synergize their competitive advantages. The result is that legacy players in the infrastructure management industry, such as Honeywell and Siemens, are gradually becoming software vendors as industrial IoT matures.
Following this trend, it is expected that larger incumbents will extend their dominant stance by merging smaller, innovative startups with their own development teams. Furthermore, incumbents are expected to diversify into multiple product offerings to provide vertical integration within the factory digitalization industry. Most of the incumbents identified below have acquired smaller companies and developed partnerships while developing in-house products.
However, many startups may be able to compete against the incumbents. Not only are they generally faster innovators and more agile, but possessing digital vision at the leadership level and a risk-taking culture of producing highly-digitized products for high-stakes physical spaces provide potential competitive advantages.
On the other hand, incumbents have more access to capital and can also leverage their longstanding relationships with manufacturers to develop stronger sales channels. This unique competitive landscape makes the smart factory industry a sector to watch closely.
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