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Smart Factories: 12 Lessons Learned from the Field

This article is an excerpt from a larger report titled: Accelerating Your Smart Factory Journey. For more information, including an overview of the smart factory, specific guidance for getting started, and examples of success, download the full eBook today.


Take a moment to picture what a fully digital factory should look like. Imagine every part, product and process connected to a digital twin, linked by IoT into an end-to-end digital thread. Automated systems capture metrics, flag bottlenecks, and optimize solutions in real time, adapting and reacting to changes before they are visible to the human eye.

Smart factories like this are far from fiction.

On the contrary, they are becoming essential for continued success in modern manufacturing. Companies across a wide variety of industries – from fashion brand Hugo Boss to consumer goods giant Procter & Gamble to industrial equipment manufacturer Stanley Black & Decker – have started implementing this digital era must-have.

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Lessons Learned from the Field

Based on Kalypso’s experience helping our clients build brand new smart factories and transform traditional plants, here are 12 lessons learned for others undertaking the journey.

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1 - The factory must lead the initiative

A program that is led by the business, focusing on driving improvements in safety and production, is much more likely to succeed. Typically, the best combination is a model where the business drives the process, with IT and key technology partners as collaborators and enablers. Factory leadership should focus the initiative to provide meaningful value for the manufacturing process.

2 - Avoid overdoing the plan

Establish a vision but remain agile as the real value starts to emerge. Keep the transformation agile. The main necessities are a strategic vision, active leadership endorsement, and building on proven value.

3 - Embrace failure and learning

Adopt an agile mindset and allow for failure of proofs of value, especially when they are early in the process. Implement a mechanism to learn from failures and adapt to these learnings when starting new initiatives.

4 - Do not make a single technology the hero

A single piece of technology cannot and will not provide all the desired results on its own. Before implementing any technology, make sure that it can interface with the existing backbone to support other technologies, and confirm that there is a plan in place to properly fit the technology into the physical production process.

5 - Avoid implementing many technologies that do not integrate

Before making any technology decisions, establish a set of hypotheses around the architecture and prove those out during a proof of value. Be sure to involve qualified subject matter experts (SMEs) to ensure the technology implementations will help achieve your unique defined objectives.

6 - Bring in local process subject matter experts

A good smart factory team leverages people in the plant to incorporate their knowledge of the process directly into the solution design.

7 - Avoid operating in silos

Do not keep everything to yourself. Communicate pilot programs throughout different departments and locations. This will avoid duplicating work and spending unnecessary resources.

8 - Get beyond the pilot phase

The purpose of a good pilot is to prove the value case and test the set of architecture hypotheses. An over-extended pilot stage delays full implementation of digital technology and deviates the team's focus away from delivering value in the primary production process.

9 - Integrate data governance

As different technologies are implemented (creating connections between traditionally segregated IT and OT domains) it’s likely that data is defined differently in these systems or they may not be interoperable. This significantly reduces the potential value of smart factory solutions. Data governance and standards should be key considerations at the core of the initiative.

10 - Don’t assume one use case configuration fits all

The goal should be to roll-out proven technologies to multiple plants. However, production processes, equipment and connectivity might differ from location to location. Assess which solutions fit which locations and prioritize a plan that delivers value across the organization within reasonable timelines.

11 - Create smart factory experiences

When trying to manage change at scale, it’s much more compelling to showcase how new technologies can make a real difference within a plant than to show generic technology demonstrations that are not related to the company’s specific production processes. After the first technologies have proven their value in the pilot plant(s), it is a good opportunity to create experiences that can be shown to managers from other plants and regions.

12 - Communicate progress and celebrate success

It might not be feasible to create a detailed long-term plan in advance. To help overcome this, celebrate early successes and clearly communicate decisions to roll-out successful proofs of value to other plants.

The Bigger (SCO) Picture

Although this article is primarily concerned with smart factory development, smart factories are only one part of smart connected operations (SCO). Ideally, the end vision is to connect multiple smart factories to suppliers, customers, and logistics providers to create a smart connected production network.

Within this, all actors in the supply chain share data and there is live end-to-end insight into the value chain. This will allow companies to have full visibility of supply and demand and be able to react to disruptions and changes without delay.

New eBook: Accelerating Your Smart Factory Journey

Whether you are building a brand-new smart factory or transforming a traditional plant, your company will need a well thought out strategy to successfully integrate new technologies and stay agile in this rapidly changing marketplace. The leading practices and common pitfalls outlined in this eBook will help you build the right team and bring experienced professionals to the table as you start your smart factory journey.

This Smart Factory eBook includes:

  • Discussion of smart factory drivers and enablers, from technology to consumer demand
  • Overview of the smart factory
  • Guidance for getting started
  • Learnings and best practices from the field
  • Examples of success
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