The recent unveiling of Alibaba's new digital factory is making waves in the manufacturing world. Data and insights form the core of its operations. The factory's debut has come at an opportune time, as manufacturers are describing digitizing as an essential element for growth.

Over the last 10 years, the sector has adopted a collection of disruptive technologies, though adoption hasn't been uniform or as widespread as needed. These include robotics, the Internet of Things, machine learning, artificial intelligence and 3D printing, among others.

As we traverse through unprecedented times, we can see how our work and daily habits have changed. COVID-19 is reshaping our lives, and companies are reshaping their business processes. Digital transformation is no longer a luxury but a necessity for survival.

The recent MPI 2020 Industry 4.0 Study shows that most manufacturers describe Industry 4.0 as an essential element to adapt to the changes. Eighty-three percent support innovation-driven growth strategies, while 56% believe that Industry 4.0 will have a significant impact on their business.

Alibaba Group is leading the way. The Chinese company’s New Manufacturing model combines powerful digital technologies with consumer insights.

The Alibaba factory offers SMEs a digitalized and comprehensive manufacturing supply chain powered by a cloud computing infrastructure. It leverages IoT as a disruptive technology. This gives smaller businesses and manufacturers the ability to design demand-driven and fully customized production.

Traditional manufacturers can respond better and quicker to customers' changing needs with new technology. They can meet the consumer preference for personalized goods rather than mass-produced ones. It will also help reduce their inventory levels, improve profitability, increase efficiency, and the level of customization.

Alibaba's agile model of production is based on real-time demand backed by data-driven intelligence and technology. The integrated product design platform is aided by artificial intelligence. It boasts of a superior trend and sales forecast model that offers deep insights into consumer preferences. It has reduced research and development costs and will enable businesses to provide better consumer personalization.

Factories of the Future

COVID-19 has been a catalyst for the digital transformation of different industries, including manufacturing.

It is not just Alibaba that’s taking a step in the right direction. Weidmueller, a German electrical connection technology company, is using intelligent assets as well. It started using the SAP Digital Manufacturing Suite a year ago. It uses real-time information to connect the user to manufacturing and logistic processes.

Agility is the key. Smart factories use technology and data to change and improve productivity. Having the ability to communicate during every step of production helps manufacturers improve designs, lower costs, and achieve increased customer satisfaction.

Organizations are leveraging these intelligent assets to generate new business models to transform from being responsive to predictive.

A new survey shows that the adoption of Factory of the Future (FoF) technologies is gaining momentum across the manufacturing sector.

The study, conducted by Oliver Wyman/L'Usine Nouvelle, of industrial firms found that manufacturers are ready to embrace the critical disruptive innovations and implement them. Eighty percent of respondents are familiar with crucial FoF concepts.

They want to use these emerging technologies to shift from mass production to mass customization. However, they realize that they have to contend with human capital issues and lack both hard and soft internal skills. Unless they deal with these issues, they cannot push digital transformation along.