February 2021

Special Focus: Digital Transformation

Smart manufacturing standardization: Driving global interoperability for enabling factories of the future

Smart manufacturing is a topic that has generated considerable discussions within industry and standards organizations.

Smart manufacturing is a topic that has generated considerable discussions within industry and standards organizations. Starting off as a slick marketing term, the full impact of a manufacturing ecosystem that is enabled by information at each point in the product and production life cycle is compelling and encompassing. Smart manufacturing is a concept used to describe the application of different combinations of modern technologies to create a hyper-flexible, self-adapting manufacturing capability. It is an opportunity to create new forms of efficiency and flexibility by connecting different processes, information streams and stakeholders in a streamlined fashion.

The U.S. National Institute of Standards and Technology (NIST) defines smart manufacturing as “fully integrated, collaborative manufacturing systems that respond in real time to meet changing demands and conditions in the factory, in the supply network, and in customer needs.” The Smart Manufacturing Leadership Coalition defines smart manufacturing as “the ability to solve existing and future problems via an open infrastructure that allows solutions to be implemented at the speed of business while creating advantaged value.” The IEC and ISO jointly defined smart manufacturing as “manufacturing that improves its performance aspects with integrated and intelligent use of processes and resources in cyber, physical and human spheres to create and deliver products and services, which also collaborates with other domains within an enterprise’s value chains.”

In simple terms, smart manufacturing entails orchestrating physical and digital processes within factories and across other supply chain functions to optimize current and future supply and demand requirements. This is accomplished by transforming and improving ways in which people, processes and technologies operate to deliver the critical information needed to impact decision quality, efficiency, cost and agility. In turn, smart manufacturing is a corner-stone of digital supply chains and of Industry 4.0 strategies and programs.

The industrial policy initiatives of many nations (FIG. 1) are aggressively focused on the manufacturing sector. Digitization of manufacturing is important, and concentrated efforts are being made to develop and promote robust and localized manufacturing capabilities. Several nations anticipate that long-term benefits will be recognized beyond the manufacturing industry and diffused into other economic sectors. In turn, manufacturers are making significant changes to their strategies, advantageously leveraging these initiatives and improving local market competitiveness. The heritage of the various initiatives in FIG. 1 might appear different, but their initial designs and core concepts have minimal differences. Several ideas and concepts are often borrowed from one another to be unique, and differentiation is created through the following:

FIG. 1. Global smart manufacturing initiatives.
  • Promoting innovative models and setups through advanced technologies; these objectives are anchored by increasing integration, digitalization and new techniques for automating production
  • Sponsoring incubation and co-development by combining industry, technology and service providers and original equipment manufacturers (OEMs) with academic and government organizations
  • Developing and co-innovating new industry standards by way of exchange of experiences and access to testbeds and reference platforms.

Standards landscape

Standards are fundamental for enabling smart manufacturing. Different standards contribute in different ways to enabling the capabilities of smart manufacturing systems. FIG. 2 illustrates three dimensions of smart manufacturing, along with relevant standards. Each dimension—product (green), production system (blue) and business (orange)—is shown within its own lifecycle.

FIG. 2. Smart manufacturing standards (adapted from NIST IR 8107).

The product lifecycle is concerned with the information flows and controls, beginning at the early product design stage and continuing through to the product’s end of life. The existing standards—particularly, in the areas of computer-aided design (CAD) and computer-aided manufacturing (CAM)—have greatly improved engineering efficiency. In addition, these standards enhance modeling accuracy and reduce product innovation cycles, thus contributing directly to manufacturing system agility and product quality.

The production system lifecycle focuses on the design, deployment, operation and decommissioning of an entire production facility, including its systems. Areas of standards that support production lifecycle activities include production system modeling data and practices; production system engineering, operations and maintenance; and production lifecycle management.

The business cycle addresses the functions of supplier and customer interactions. Standards for interactions among manufacturers, suppliers, customers, partners and even competitors include general business modeling standards and manufacturing-specific modeling standards and corresponding message protocols. These standards are the key to enhancing supply chain efficiency and manufacturing agility.

Each of these dimensions comes into play in the vertical integration of machines, plants and enterprise systems called “the manufacturing pyramid” (the central pentagon in FIG. 2). In smart manufacturing, autonomous and intelligent machine behaviors—including self-awareness, reasoning and planning, and self-correction—are key, but information resulting from these behaviors must flow up and down the pyramid. This integration from machine to plant to enterprise systems is vital, and it critically depends upon standards.

Standards-enabled smart manufacturing integration allows the following:

  1. Access to field and plant data for making quick decisions and for optimizing production throughput and quality
  2. Accurate measures of energy and material use
  3. Improved shop floor safety and enhanced manufacturing sustainability.

Generally, existing manufacturing standards provide how-to instructions for designers, engineers, operators and decision makers to conduct disciplined activities within their domains. They also facilitate communication between stakeholders across domain borders, borders of the manufacturing system hierarchy and between lifecycle phases. Standards and reference models can offer an organization through a baseline for common lexicon for consistent engagement across different functions and geographies. At the most basic level, reference models and standards will help with business cases, technical feasibilities and value proposition evaluations. At a more detailed level, some might lend process maps and templates that help identify assets, applications and data, as well as potential resource allocations and security requirements—all of which are helpful for scale should prototypes be proven. However, standards still point toward individual processes and use cases vs. a complete smart manufacturing concept.

Driving global standards

Manufacturing organizations seek a manufacturing architecture that will remain consistent with a broader enterprise architecture for global visibility, collaboration and control, while still being flexible enough to support individual site goals. This is a challenge, especially for those who have inherited multiple divisions and sites, as well as multiple manufacturing styles and models (i.e., in-house, virtual or contracted).

Global standardization of the end-to-end supply network is done through common process standards that are transparent and supported by clear key performance indicators (KPIs). These standards provide a foundation for organizational consistency, without prohibiting local flexibility, reliability and innovation. While local execution is enabled by localizing global process standards to market specific best practices that consider the varying asset structures, other considerations (such as cultures, regulatory compliance and other local factors) have historically created constraints. These best practices are continuously improved to meet business objectives that are continually being reshaped by market dynamics.

Global process standards drive consistency and reliability in manufacturing, but deciding how far to extend them into local manufacturing operations without compromising agility is hard. The balance is tipping to a point where site autonomy and control over manufacturing systems is giving way to manufacturing standards mandated by enterprise architects. At the heart of these debates is how far to take the standardization of processes, information, technology and solutions, while allowing for specific local plant or functional needs. FIG. 3 provides a process and system map where organizations can define how far to extend global standards into local manufacturing operations, and how to follow local best practices without compromising reliability and performance. Enterprises can define the point (or “locus”) where unified and global standards, along with best practices and systems, align to deliver value to the business.

FIG. 3. Framework for manufacturing standardization.

Beyond this point, the lack of local flexibility, as well as the time and cost to establish standards, fails to deliver business benefits. For example, a precision parts producer that supplies piston pins to multiple automotive OEMs worldwide requires consistent quality. This producer pushes standardization down to the production processes, differentiating itself through a three-stage manufacturing process (cold forging, heat treating and finishing process) that is standard in each facility. Beyond quality, this degree of process standardization lays a foundation for agility in this producer’s manufacturing network. Because each factory produces the product the same way, regardless of different production equipment, the company can shift production from site to site to mitigate variable costs or similar risks.

The standardization conundrum is not confined to business processes only. Standardization is a challenge, let alone managing the heterogeneous manufacturing information technology (IT) system landscape. Heavily emphasizing IT integration-driven standards like ANSI/ISA-95 (IEC/ISO 62264) for plant-to-business integration is not getting the job done fast enough. Although these standards are valuable for defining a common vocabulary that IT and operational technology (OT) stakeholders can use when devising manufacturing system architecture, they do not reflect the dynamic nature of manufacturing today. These standards perpetuate the belief that a generally accepted and well-defined boundary exists between global standardization and local execution, but that is not actually the case. Individual factories that house manufacturing applications spanning different activities and tasks with various underlying data models are the norm for many global manufacturers—and this has intensified for those that have grown through mergers and acquisitions. In addition, the actual maturity and depth of system functionalities can vary from process to process and from site to site. Beyond packaged applications, the business and capital cases for standardization across the multiple forms of OT found in manufacturing (such as data historians, programmable logic controllers (PLCs) and other plant equipment and devices) are difficult to accomplish.

Smart manufacturing centers of excellence (CoEs)

Progressive organizations have created smart manufacturing CoEs to handle the coordination of scaling global process standards across their manufacturing networks. These CoEs are designed to enable operators to:

  • Document existing practices across the manufacturing network
  • Create a best-practice library
  • Establish a baseline on which process improvement work is required
  • Ensure consistent results.

These CoEs will develop the appropriate approaches or methodologies (e.g., total quality management) that will most effectively scale standards, so that multiple projects can happen simultaneously. Most manufacturing CoEs are virtual and are often dispersed within specific regions to best handle the coordination of local functions to achieve targeted milestones and outcomes. This approach is designed for:

  • Using a library of commonly defined business process templates vs. relying on individual projects that are developing “in their own way”
  • Establishing consistency across multiple projects, thereby enabling meaningful sharing of best practices for reducing complexity and redundancy
  • Complying with governmental regulations.

Although they feature a top-down approach, CoEs also capture feedback from those responsible for executing best practices to identify process innovations that will improve manufacturing to drive better results from the bottom up. The result is a CoE that is a cornerstone for moving an organization from simply conducting individual lean or Six Sigma projects at sites to scaling larger programs with more impact that are part of the systematized and supply-chain-wide continuous improvement program.

Smart manufacturers realize that the standards that define them and the best practices that support them must evolve. If anything, the standards are just a baseline, and moving toward a way of working across multiple geographies and cultures requires more than control- and maturity-based process improvement. Cultural readiness is critical, and, in some organizations, the CoEs feature innovative ways to drive the acceptance of standards.


The need to link detailed—and diverse—manufacturing operations with supply chains requires product supply architecture that supports both global standardization and local execution. Smart manufacturers must develop a targeted strategy that can systemically balance repeatability, standardization and continuous improvement with the paradox of innovation, agility, digitalization and constant change. Companies may find success with “locus” of control—which is a level of abstraction and interface that lets the enterprise manage assets the same way, where all production units look the same, accept the same kinds of data and orders, and produce the same information results—even though their details may be very different. HP

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