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Smart Manufacturing to Reduce Costs

The world of manufacturing is changing in front of our eyes. First, traditional manufacturing techniques reached their peak decades ago, so companies had to develop new ways of increasing productivity while reducing costs. Then, as years went by, the increasing computing power and other technologies introduced new ways of improving manufacturing.

The so-called "smart factory" age is here, as the entire world enters the fourth industrial revolution dubbed Industry 4.0. It turns out that artificial intelligence, the Internet of Things, and automation can work together to bring manufacturing to a whole new level. Let's see the effects it has on operational costs.


Preparing Your Company for Smart Manufacturing

Digital technologies have reached a point where they can be applied to various practices and industries. For example, the manufacturing industry has always been at the forefront of adopting new technologies to improve production, and the same can be said for smart manufacturing.

The so-called industry 4.0 is already changing entire industries for the better. However, the Industry 4.0 definition is not the same in every application. Some companies use the Internet of Things technologies to interconnect all devices, increase visibility, and optimize production. Others subscribe to a SaaS solution designed to help improve resource and project management. The goal of every digital transformation is to increase productivity while reducing costs.

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Whatever the method is, the essential part of the process is to create a steady stream of operational data. Most software solutions that fall under the industry 4.0 definition require large amounts of data to make sense. The data is needed to help the AI-powered solution find errors and patterns through automation. For everything to work, the entire operation, including every CEO, employee, and team member, has to stick to a single adoption strategy.

First, companies have to find areas they want to improve, then ensure that the AI gets access to the correct data and creates a detailed roadmap of the entire process. In short, everyone involved has to share the same goals as the company, or the effort might turn out too expensive and inefficient.

The Correct Approach to Automation

As mentioned above, the approach to adopting automation and other technologies matters a lot. One wrong step can result in high costs and low returns. That's why you have to plan the entire process to the last detail. Generally speaking, there are three primary steps you need to take for automation to work. Here's a quick overview of the main concerns:

Evaluate Existing Systems

You can't adopt new technologies and expect them to benefit you before evaluating existing systems and infrastructure. That's the first step in adopting new technologies, and it's the most important step of all. Automation and artificial intelligence solutions are a part of the Industry 4.0 definition, but they can't do much without the proper setup.

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The bottom line is that you should take your time to plan the digitization process and follow it closely throughout every stage to get the best results. You will surely run into all kinds of challenges, so take your time to resolve problems one by one before moving on to the next stage.

Assess The Situation

When you know what you're working with and the state of your operation, you need to pinpoint the areas where digitalization is needed the most. Check back with your teams, see what your engineers have to say, and communicate the overall plan to your stakeholders as well.

Everyone involved has to stay in the loop if you want the digital transformation to work. Keep communicating with all departments and key personnel throughout the process and try to resolve potential issues as soon as possible. Remember to check in with team leaders frequently to ensure that everyone is on the same journey.

Identify New Business Opportunities

What good is an AI solution if you don't monetize it, right? Well, apart from increasing productivity and efficiency, AI also helps find new business opportunities. It's your job to apply the solution to the process to provide the most benefits. Once it learns how everything works, the AI will suggest how to improve targeting and meet your company's goals.

Cost-Saving Benefits of Smart Manufacturing

We've finally reached the part of the article everyone is waiting for. Now that you know more about what it takes to create a smart manufacturing plant, it's time to see what benefits you get from the process. Here are only some of the cost-saving benefits you will get after introducing digital technologies into manufacturing.

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Robots Work Nonstop

Most manufacturing plants have to keep their machines running to reduce costs and increase efficiency. Traditionally, employees had to work in three shifts to minimize production costs. However, robots will take overproduction once you introduce automation into the mix.

Robots play a major role in Industry 4.0 definition, as they increase productivity and improve product quality while reducing costs. AI-driven robots are able to perform high-precision tasks 24/7 without making a single mistake. That means that your production line will produce more units and have less waste. The best part is that robots will keep working with the same accuracy as long as your plant has power. So, in the long run, robots can help you save a lot of money on labor and production costs.

Improved Product Quality

Manufacturing companies have been losing a lot of money on returning substandard products. Industry 4.0 can help reduce those costs to practically zero through data analytics. The AI system, which is the brains of every smart factory, uses real-time operational data to learn how products work in various settings.

Once it gathers enough data, the AI will automatically identify all parts and design flaws. It will provide your engineers with improved plans and instruct embedded devices on what to do to increase product quality. Moreover, the system will work extra hard to improve product quality and minimize waste. Higher product quality will reduce defect costs, allowing you to increase revenues.

Reduced Operating Costs

Most manufacturing companies have been looking for ways to reduce costs and increase profits for centuries. The first three industrial revolutions led to mass production and cost reductions. The fourth industrial revolution follows the same approach, but instead of physical technologies, it uses digital technologies to improve manufacturing processes.

Manufacturers can increase productivity after the digital transformation is complete while reducing costs. New techniques such as real-time monitoring and quality control help reduce waste. AI solutions can also predict future maintenance efforts' exact costs and dates, minimizing downtimes and overall costs.


Industry 4.0 definition says that smart factories are the next step in the manufacturing evolution. There's no doubt that new digital technologies have a significant impact on all manufacturing practices, as well as costs. Digitalization doesn't change how manufacturing works. It simply finds better, more cost-efficient ways of optimizing production and reducing costs. It's the way of the future, and we expect to see most industries adopt this model in the near future.

Author bio

Rick Seidl is a digital marketing specialist with a bachelor’s degree in Digital Media and

Communications, based in Portland, Oregon. With a burning passion for digital marketing, social media, small business development, and establishing its presence in a digital world, he is currently quenching his thirst through writing about digital marketing and business strategies for Find Digital Agency.

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