Digital Factory

What is a digital factory?

A digital factory is a virtual representation of a physical manufacturing facility that incorporates all aspects of production – including raw materials, machinery, production processes, labor, and manufacturing overhead. Digital factories enable manufacturers to simulate, analyze, and optimize new product designs for cost, sustainability, and design for manufacturing and assembly (DFM&A).

With digital factories, product development teams can proactively identify and eliminate potential issues quickly, preventing delays and cost overruns throughout the product development lifecycle. Additionally, some digital factory software focuses on the physical layout and location of equipment on the shop floor to help enhance workforce efficiency, maximize factory space, etc.

Is a digital factory a type of digital twin?

A digital twin is a virtual model for product design and manufacturing, and there are three distinct “digital twins” for the design and manufacturing process:

• A digital product twin is a virtual replica (3D CAD model) of a physical product, including its geometry, components, and assemblies.
• A digital process twin simulates manufacturing process models to evaluate manufacturability and cost calculation.
• A digital factory twin simulates the physical production site.

Together the three digital twins help to ensure optimal manufacturability, cost-effectiveness, and sustainability.

How does a digital factory work?

It provides analysis and insights to optimize manufacturing by aligning the product design, manufacturing process, and specific factory. This approach provides the end-to-end visibility required to optimize and align design, sourcing, sustainability, and production. Importantly, product design and manufacturing teams can simulate and compare alternatives based on changes to the product design, bill of materials (BOM), manufacturing process, or factory.

Effective digital factories enable users to compare multiple options simultaneously to better understand potential trade-offs. The digital factory includes the following features:

• Optimize product design: Use manufacturing simulation software to analyze 3D CAD design geometric and material data, automatically identifying design-enhancing opportunities to address cost, DFM&A, and sustainability. Designers receive immediate feedback on the cost, DFM&A, and sustainability implications of their design choices, allowing for iterative optimization without leaving their 3D CAD environment.
• Identify the most appropriate manufacturing process: Based on the product design, a digital factory platform can suggest the most cost-effective manufacturing processes and sequences. Specifically, a digital factory platform can simulate the manufacturing process, identifying potential bottlenecks or inefficiencies and suggesting improvements.
• Compare and select the optimal digital factory: A digital factory is a virtual representation of a specific physical factory that enables product design and teams to simulate production. Product manufacturers can create digital factories to replicate their in-house production facilities and supplier factories and create digital factories in new regions to estimate production costs in a specific area. For example, a product initially manufactured at an internal manufacturing plant in Atlanta, Georgia could be evaluated against the cost of manufacturing that same product at a supplier in Guadalajara, Mexico. (Learn how a digital factory estimates production costs.)

What are the benefits of digital factories?

The digital factory provides myriad benefits to manufacturers, including:

• Manufacturability: Product feasibility early in design pinpoints manufacturability issues, reducing late-stage design engineering change orders (ECOs) that impede time to market. These automated insights enable manufacturers to scale product design, sourcing, and other vital operations. DFM&A, design to cost (DTC), and other product development benchmarks also improve and are more attainable.
• Profitability: Manufacturers can identify cost and carbon footprint outliers long before reaching the production floor, saving time and preserving profit margins. Additionally, they can optimize make vs buy decisions, informed by simulated demand per process
• Risk Mitigation: Since digital factory insights uncover issues early in the design stage, risks are mitigated quickly by running what-if scenarios to identify alternative parts, materials, or processes. This level of visibility can help mitigate product launch delays, supply chain disruptions, cost overruns, high carbon emissions, and other risks.
• Sourcing: Sourcing can streamline quoting times and supply chain management, mitigating issues, including material shortages and price fluctuations, quickly and early in product development. They also can identify new suppliers at the start, compare production environments to find the most optimal and cost-effective one, propel more successful negotiations, and better inform data-driven supply chain decision-making.
• Sustainability: A digital factory calculates material carbon emissions factors, cycle times, and electricity carbon for each manufactured part based on its manufacturing processes and routine logic as well as by region. Insights identify and mitigate the most significant carbon contributors early in the design process and lower their associated costs. Visibility into CO₂e drivers for all product CO₂e components for continuous improvement and effective upstream Scope 3 estimation.
• End-to-end visibility and time to market: Digital factories provide end-to-end visibility to quickly identify issues at every stage of product development, accelerating time to market with a better, more profitable (and sustainable) product.

What information does a digital factory use to estimate production costs?

A digital factory incorporates relevant costs to produce a product, including:

• Labor rates (fully burdened labor rate including direct wages, directly paid benefits, and social overheads)
• Materials (overhead, pricing, physical properties, and stock sizes)
• Direct overhead rates (machine maintenance and depreciation, machine power/energy usage, etc.) and indirect rates (rent, utilities, insurance, etc.)
• Total manufacturing rate based on the factory location and/or manufacturer or supplier inputs

Manufacturers apply should cost data from digital factories to:

• Conduct fact-based supplier negotiations
• Benchmark supplier quotes
• Assess the cost impact of sourcing components or toolings to various or new regions
• Develop budgetary estimates and track budgets spent to cost targets
• Compare the costs for design alternatives

Digital factories simulate manufacturing by leveraging all the intelligent features captured within a 3D CAD model specifications such as tolerances, manufacturing processes, and other pertinent information like annual volume, production runs, etc. As a result, design, manufacturability, and production are optimized to meet the specific parameters of that factory.

The digital factory should run in the background of your 3D CAD model, breaking down the design into geometric cost drivers. The result is real-time insights and data analytics for a part’s cost, CO_2e emissions, and optimal manufacturing process to lower carbon emissions, mitigate supply chain issues, reduce costs, and improve manufacturability and decision-making early in the design stage.

What are some considerations for implementing a digital factory?

Before selecting a digital factory solution, consider the following:

• Configuration: Out-of-the-box digital factories serve merely as a production deployment configuration baseline. Manufacturing practices and benchmark estimates are guidelines offering general production and overhead rates. One that can be tailored to the specific facility’s manufacturing practices, cost structures, and preferred suppliers’ capabilities is ideal.
• Integration: A digital thread can connect cross-functional teams, the digital twins, and other enterprise systems they use through a closed-loop process. It provides a single, reliable source of digital product data that enables fast, more informed decision-making. By weaving the digital thread throughout the product development lifecycle, manufacturers can connect the digital twin to data from the physical world (i.e., manufacturing capacity, supply chain sourcing, cost information, field service reports, and other operations).
• Cybersecurity and Privacy: A robust, secure digital ecosystem that will protect sensitive information from breaches is essential.
• Software Adoption and Change Management Support: True digital factory optimization and digital transformation require full organizational adoption and change management support. The best solution provider can facilitate adoption, ensuring seamless integration and a central data source from which all teams can work.