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What to Expect in the Factory of the Future

June 19, 2018
Relentless competition, new regulations, fluctuating commodity prices and new algorithms are forcing companies to look at new ways to streamline.

The Factory of the Future.

It’s something we’ve been talking about since…well… the early 1880s. The factory of the future always seems around the corner because it’s a never ending job. Manufacturing plants and equivalent facilities like oil refineries and power stations stand as remarkable achievements in engineering and process innovation, but they are also complex, multifaceted and can always be improved.

Today remains no different. Relentless competition, new regulations, fluctuating commodity prices and new algorithms are forcing companies to look at new ways to streamline.

So what will people focus on?

Energy. Energy can take up 30% of the cost of producing metals or running a water treatment plant. Data centers spend more on energy than anything else except employees. Renewables have become a high priority for many data centers because (1) it helps the company reputation and (2) it can turn what can be an unpredictable, variable cost for 30 years into a smooth, capitalized asset.

Industry, worldwide, consumes 54% of the world’s total delivered energy, or more than homes, office buildings and cars combined. Expect to see a big emphasis on the three S’s--solar, storage and software.  Companies like Alcoa that own their own power plants have  successfully fine-tuned operations to sell power back to the grid at peak periods, resulting in   a new, unexpected revenue stream. 

Change in ownership. Rather than sell the equipment they manufacture, equipment makers will install systems, maintain and control them and sell access to them as a service. Equipment as a service creates some legal headaches but financially it makes quite a bit of sense for everyone. Plant owners don’t have to invest up front and equipment makers can enjoy a steady revenue stream.

The oil industry is a pioneer in this regard. Exploration companies and refiners have long relied on third parties like Kongsberg Marine. In the factory of the future, long-established companies like Flowserve have started integrating digital monitoring services for better maintenance while startups like SenseOps are helping smaller equipment makers reach more customers. Instead of selling equipment, a producer can build one system and lease time on it to many people in the same region.

Remote work. As more systems get monitored and owned remotely, many employees (or rather the employees of your equipment providers) won’t need parking spaces. They will be working in control rooms off-premise

Michael Kanellos is a technology analyst at OSIsoft.

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