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Smart Factory
Overview
Smart factories–the next transformation for manufacturing
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 is more efficient and agile manufacturing systems with less production downtime and better competitive advantages in the marketplace.
Industry Updates
Market Sizing
The US smart factory market is estimated to reach USD 15.9 billion–32.5 billion by 2027
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Use cases
Smart factory technologies have been adopted across diverse sectors, with prominence in the materials and industrial sectors. This specifically includes the chemicals subsegment for industrials as well as the machinery subsegment for industrials.
The adoption rates for robotic manufacturing solutions, encompassing both hardware and software, have been relatively high, due to benefits like reducing labor requirement, increasing production speed, minimizing downtime, and ultimately improving overall efficiency of manufacturing operations. These solutions include robotic solutions like gripping materials/products in the manufacturing process, machine tending, welding, cleaning, and finishing. Solutions for manufacturing process optimization and equipment maintenance, which involve manufacturing and machine data collection and analysis, have also seen widespread adoption. These solutions help manufacturers to identify machine failures before they occur, improve machine utilization, and identify opportunities for cost reduction.
We have identified key smart factory use cases below:
Market Mapping
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.
Data Analytics
Predictive Maintenance
Industrial IoT
Equipment and Assembly Line Inspection
Autonomous Mobile Robots
Advanced Robotics
Robotic Software
The Disruptors
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.
Funding History
Competitive Analysis
Incumbents
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.
Notable Investors
