Smart Manufacturing vs Digital Manufacturing

Recently, headlines related to Smart Manufacturing or Digital Manufacturing have been filling many trade journals and magazines in the manufacturing and supply chain domain.  Academics, Government, and major consultancies are talking about it constantly.  However, few manufacturers are responding to opportunities and threats presented by the smart/digital revolution in a comprehensive, coordinated way.   Here let’s examine what they are and what is the implication for your strategy.


Why are people talking about it?

With the explosion of new innovations, such as artificial intelligence, big data, automation, Industrial Internet-of-Things (IIoT), robotics, additive technologies, and augmented reality, leading experts agrees that the convergences of these recent innovations will transform every link in manufacturing value chain.  McKinsey estimates that IoT applications alone in manufacturing settings is expected to generate $1.2 to $3.7 trillion of economic value annually by 2025*.  Governments such as Germany establishes a national policy to support this transformation.


Are they different?

While the technologies have been maturing in the last 10 years, some experts coined this collective phenomenon in manufacturing induced by all the digital tools recently innovated “Digital Manufacturing” to describe the transformation.

On the other hand, “Smart Manufacturing” was born from a coalition co-founded by more than 200 partners in the manufacturing industry and academic institutions.** The organization, Smart Manufacturing Leadership Coalition (SMLC) recognizes that new information technologies have been applied to optimize individual unit processes in factories, but Smart Manufacturing (“SM”) systems that integrate manufacturing intelligence in real-time across an entire production operation are rare in large companies, and virtually non-existent in small and medium size organizations.  SMLC is committed to overcome barriers to the development and deployment of Smart Manufacturing (SM) Systems through an implementation agenda for building a scaled, shared infrastructure called the Smart Manufacturing Platform (SM Platform).***

However, the term “Smart Manufacturing” has evolved and is now almost synonymous with “Digital Manufacturing”, “Industry 4.0”, and other terms that similarly describe the leverage of recent innovations in technologies to transform the manufacturing value chain, confirmed at a recent Industry Week conference survey.****


Why does it matter to me?

The reason that this matters to you is because this wave of innovation will disrupt the fundamentals of the entire manufacturing value chain.  The key is to improve your operations leveraging the latest technology innovation to make you a better producer, making sure you will become the leader and disrupt your competitors, and not getting disrupted by others.







Frank Poon

Head of Product, Atollogy