A Complete Look at Smart Factories

Jesper Sjogren, Prophecy Industrial IoT
March 27, 2023
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A smart factory is a digitized manufacturing facility that —through the use of connected devices, systems, and machinery— creates an ecosystem of data. Learn about how smart factories integrate technologies such as the Industrial Internet of Things (IIoT), artificial intelligence (AI) and machine learning (ML), big data analytics, and cloud computing.

We’ve all heard the phrase “work smarter not harder.” In many ways, this is what a smart factory can do for your manufacturing business. Smart manufacturing is the technology-driven approach that applies network-connected machinery and devices to monitor the production process. To simplify this more, a smart factory automates aspects of the business so that employees can focus on innovation and service.

As technology grows and changes, how can it help your team produce a business where customers and innovation are at the forefront? Let’s take a look.

What is a Smart Factory?

A smart factory is a digitized manufacturing facility that —through the use of connected devices, systems, and machinery— creates an ecosystem of data. This means that the data is continuously collected and shared, and it can then be used to make informed decisions about improvements for processes, production, inventory, customer service, maintenance, etc. The technology doesn’t just monitor the machines, but it can track employee performance and keep an eye on customer behaviors, the market, and suppliers, too.

Technologies commonly utilized by smart factories include the Industrial Internet of Things (IIoT), artificial intelligence (AI) and machine learning (ML), big data analytics, and cloud computing.  

The Key Principles of a Smart Factory

Smart manufacturers believe in combining and connecting the latest technologies and data to lead to improvements company wide. IIoT and AI allow for high efficiency, quality control, and cost-effectiveness. They also can create safer work environments.  

Benefits of Smart Factories

Due to the incredible amount of data and information at hand, smart factories are able to make fast evidence-based decisions that lead to greater productivity and, in turn, customer satisfaction. Utilizing data and automating various processes will also lead to less waste, lower costs, and limited downtime.  

This is because outdated or inefficient processes will be found and changed. The technology aids in the entire production process, beginning with planning and ending when the product is received by the customer.

The technology can also monitor maintenance of machines and employees. Through analyzing historical data as well as through use of things such as sensors, preventive and predictive maintenance can be scheduled for times that won’t interfere with the production line. The technology can also ensure that employees are wearing safety gear and monitor things like heart rate or temperature in order to avoid emergency situations.  

Levels of Smart Factories

There are four stages along the journey to becoming a smart factory. Level one is considered basic data availability.  

This is to say that at level one, the facility has yet to reach “smart” status. Data is being accumulated, but it isn’t able to be analyzed quickly and/or easily, nor can it be accessed for decision making.  

Level two brings proactive data analysis.  

What this means is that data is accessible and organized for employees to understand and use thanks to either an in-house data analyzer or a third-party team. Data should be centrally available for team members and structured in a somewhat visual, readable manner. However, some work is still required to make it match real-time.

Which leads to the third level: active data.  

Now, data is being analyzed via AI and ML, and there is very little employee supervision. There is no longer a concern of time delay, and the automated programs can predict things like issues or anomalies, thereby allowing your company to sidestep failures.

Level four is action-oriented data, and it just takes level three farther.  

By using historical and current data, the technology can spot problems, create solutions, and it does all of it without human engagement.  

How to Create a Smart Factory

Upgrading to smart manufacturing does require a financial commitment, but you can implement changes and new machinery over time. Begin by assessing your enterprise and determining which areas would most benefit from improvement now. To do so, build a team with a diverse understanding of your operation. Specialists from each department should be included in order to get the most in-depth understanding of current needs. Then a plan should be created for how to most quickly improve processes, lower costs and waste, increase sales, and get ahead of the competition.

Another important task is training employees to ensure proper usage of new machines and devices. There’s a false belief that smart factories require less employees, but instead, it just means employees are used in different ways, like monitoring systems, collating data and action improvements, and completing inspections or repairs, as well as in innovative tasks and building customer relationships.  

Smart Security

It probably goes without saying that the data generated is very vulnerable, and therefore a vigilant, intentional plan for cyber security is of the utmost importance.  

Data protection and privacy are vital for any business. Processes and data need to be protected not only from hackers, but also from accidental information leaks.  

Cybersecurity may extend your overall cost of a smart factory, either through expanding your IT department or by hiring third-party assistance. However, the expense is well worth it when you know your enterprise, your employees, and your customers are secured.  

Wrapping Up

Through a data ecosystem, smart factories are more connected, informed, and efficient than competitors. Through the use of IIoT, AI, and other areas of Industry 4.0, the benefits of smart manufacturing envelope all aspects of your enterprise: procedural and process improvements, enhanced inspection and maintenance, logistics and analytics, timing, and even staff utilization and safety.

While the benefits are tremendous, the cost of upgrading equipment, providing security, and retraining staff may be a deterrent for some business owners.

Is converting to a smart factory the right decision for your enterprise? Speak with the experts at Prophecy IoT® to find out. Prophecy’s team will listen to your needs and help you to establish goals both for now and the future. They can help you to achieve those goals, too, whether you’re ready to go all in today, or if you need to implement a slower transformation. Visit or call (586) 464-4400 today to see how smart technology can transform your enterprise for the better.

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Jesper Sjogren, Prophecy Industrial IoT
Jesper Sjogren, Prophecy Industrial IoT

Jesper Sjogren is the product manager for the Prophecy Industrial IoT platform. Before Prophecy Industrial IoT, Jesper worked in the Industrial IoT space for +20 years. He started his career working for Ericsson Inc., a Fortune 500 global market leader in Wireless Broadband Technology and Professional Services. In addition, he worked on Smart Manufacturing and Smart City applications as a strategic business consultant and project leader. Additionally, he spearheaded the Southeast sales function at relayr, an industry leader in IIoT and AI/ML, delivering business outcomes to Industrial manufacturing companies. Jesper Sjogren can be reached by calling 586-464-4400 or by visiting

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