Robert B. Cohen, PhD
Senior Fellow, Economic Strategy Institute 

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Robert B. Cohen, PhD
Senior Fellow, Economic Strategy Institute 
December 16, 2020

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Robert B. Cohen, PhD
Senior Fellow, Economic Strategy Institute 
October 8, 2020

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Robert B. Cohen, PhD
Senior Fellow, Economic Strategy Institute 
June 29, 2020

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Click Here to Download the Full Report as a PDF File

By Robert B. Cohen, PhD, Senior Fellow, Economic Strategy Institute
September 18, 2020

Summary

This report finds that manufacturers are approaching a significant turning point where the full benefits of digital computing and analytics as well as 5G communications will reshape how goods are produced. While smart factories are uncommon, they offer overwhelming benefits in managing operations, output, and productivity. Enterprises should note that smart factories signify an economic disjuncture that alters the economics of the shop floor much as Adam Smith’s Wealth of Nations defined a conceptual model of the firm that relied upon the division of labor in a pin factory1. Today, smart factories with 5G communications indicate that our old conceptual model of the firm no longer describes modern industrial operations. We must develop a modern model of the firm that is based upon new job skills and the rapid analysis of information. This new manufacturing ecosystem will define the Factory of the Future.

What is striking about the smart factory with 5G private networks are the changes in flexibility, scalability, and reliability. These plants can change production lines and the products they produce in noticeably short times. Connectivity is wireless, so cabling on the factory floor is a thing of the past. In these smart factories only the floor, ceilings and walls do not move. Computerized models with digital depictions of production processes, products, and algorithms to improve operational performance are commonplace in these smart factories with 5G private networks. In addition, many of these factories can respond to demands for customization far better than traditional ones.

Click Here to Download the Full Report as a PDF File

By Robert B. Cohen, PhD, Economic Strategy Institute
April 16, 2020

Introduction

This study of “fully digital” firms finds that such firms change their value chains in two phases. In phase 1, they build smart factories and connect nearly all manufacturing processes to machine learning models and AI that analyze machine data rapidly.1 In Sanofi’s new Continuous Biologics Manufacturing Facility, or digitally enabled, continuous manufacturing facility, data from processes is evaluated in real-time and sent to workers’ iPads and displayed on digital screens. This lets Sanofi’s employees act quickly to adjust any processes that need to be changed.

Initially, these firms build a high-performance wide area network that connects all the equipment in a plant; this network connects with data analysis systems. With these systems, machine learning and AI are applied to important processes in the plant. This study finds that moving to automation and analytics has substantial benefits, increasing output and lowering costs.