Factory of the future will reduce conversion costs by up to 40%: BCG

Dec. 13, 2016 – Manufacturers that invest in the factory of the future will save up to 40 per cent of their conversion costs in 10 years, according to a new report from The Boston Consulting Group (BCG).

To succeed, however, manufacturers have to leverage the potential of modular production concepts and new technologies, as well as optimize their processes, noted the 2016 Factory of the Future Study, conducted by The Boston Consulting Group (BCG) and the Laboratory for Machine Tools and Production Engineering (WZL).

“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,” said Daniel Küpper, a BCG partner and head of the firm’s Innovation Center for Operations.

More than 750 production managers from industrial companies worldwide took part in the study, which focused on the automotive, engineered products, and process industries.

BCG said 74 per cent of respondents said their company have already implemented elements of the factory of the future or plann to do so within the next five years. However, 25 per cent said they reached their related targets last year. To make the factory of the future a reality, companies have to invest 13 to 19 per cent of one year’s revenue across a 10-year period, notes the report.

Ninety-two per cent 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,” noted Küpper.

In addition, 85 per cent of automotive respondents expect smart robots to be highly relevant in 2030, and 72 per cent anticipate the same for big data and analytics. Sixty-five per cent of automotive respondents expect augmented reality to be highly relevant, particularly in vehicle assembly. 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, according to BCG.

The report predicts implementation strategy, “powerful and secure” IT infrastructure and employee qualifications as key enablers for the factory of the future.