Resources Manufacturing & Automation

Smart Manufacturing & how to get started

    Report added by Ericsson on 31 Dec 2021
Report by Dominique Bonte, Jake Saunders, Dimitris Mavrakis, Ryan Martin


Deploying dedicated cellular-enabled industry 4.0 solutions can generate an operational cost savings ROI of 10x to 20x over 5 years. In aggregate, these solutions can generate 8.5% in Operational Cost Savings, which equates to US$200 to US$600 per sqm per year for a factory or industrial site.

Return on Investment (ROI) and Cost of Inaction (COI) analysis depends on the use cases and type of manufacturing site. In the case of a Tier 1 electronics factory, the COI is US$650 million over 5 years. For a Tier 1 automotive manufacturer, it is US$500 million.

In this study, ABI Research highlights five promising dedicated cellular Industry 4.0 use cases that harness the greater modularity and flexibility of dedicated cellular connectivity:

  • Mobile robots generated the highest operational cost savings of 1.95% of overall manufacturing TCO. Mobile robots include autonomous guided vehicles (AGVs) and autonomous mobile robots (AMRs) to speed up the supply of components and parts to workers thereby preventing slow-downs and maximizing the coordination of staff.
  • Condition-based monitoring (CBM) of connected equipment led to an operational cost savings of 1.65% of overall TCO. Condition-based monitoring improves maintenance schedules and prevents unplanned downtime.
  • Asset tracking led to an operational cost savings of 1.05% of overall manufacturing TCO. Asset tracking has a key role in tracking manufacturing production materials, personnel as well as the final finished product.
  • Augmented reality drove an operational cost savings of 0.55% of overall manufacturing TCO. Augmented reality facilitates the flow of information and the exchange of ideas across teams and between departments.
  • Provisioning connected products resulted in an operational cost savings of 0.5% of overall manufacturing TCO. Using dedicated cellular to provision connected products can help mitigate bottlenecks, improve flexibility, and streamline production.

ABI Research summarizes the operational cost savings for each Industry 4.0 solution in Chart 1. The data presented represents the aggregated operational savings ratio across various smart manufacturing scenarios and countries. Those manufacturing sectors that can leverage economies of scale and automation are likely to see additional gains.