Study: Implementing the Factory of the Future Will Reduce Conversion Costs by up to 40%

Investments in the factory of the future will pay off, and industrial companies that begin implementation today will save up to 40% of their conversion costs in ten years. To succeed, however, manufacturers have to leverage the potential of modular production concepts and new technologies, as well as optimize their processes.

These are the findings of the 2016 Factory of the Future Study, conducted by The Boston Consulting Group (BCG) and the Laboratory for Machine Tools and Production Engineering (WZL) at RWTH Aachen University.

“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.

Companies in the industrial sector have already recognized the potential of transforming their factories: 74% of respondents said their company had already implemented elements of the factory of the future or planned to do so within the next five years.

However, only 25% said they reached their related targets last year. To make the factory of the future a reality, companies have to invest 13% to 19% of one year’s revenue across a period of ten years.

Future Automotive Production Must Be Highly Flexible

Particularly in the automotive industry, flexible plant structures are becoming increasingly significant. In fact, 92% of automotive participants see modular line setups as highly relevant in the factory of the future in 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.

In addition, 85% of automotive respondents expect smart robots to be highly relevant in 2030, and 72% anticipate the same for big data and analytics.

Sixty-five percent of automotive respondents expect augmented reality to be highly relevant, particularly in vehicle assembly. Using smart glasses, for example, employees will be guided through work processes step by step and notified of any assembly errors or safety hazards.

Digital plant logistics and 3D production simulations will be key support systems in the factory of the future, enabling leaner production and faster reaction to more complex customer needs.

Strategy, IT Infrastructure, and Employee Qualifications Are Key Enablers

“The factory of the future belongs on the agenda of the top management. Its implementation is not just a job for production but for all functions in the company if it’s to be successful,” says Küpper. Most important, the factory of the future needs a powerful and secure IT infrastructure. Additionally, employee qualifications are key to the transformation agenda. However, 38% of automotive respondents see employee skills as a major challenge.

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