The Road to Smart Factories

What do steam engines, factory assembly lines, and computers have in common?

They are all products of the first three Industrial Revolutions that shaped global economies and changed how we as a society lived, worked, and interacted with each other.

Today, as we stand at the cusp of the Fourth Industrial Revolution(4IR), technologies such as 5G will transform the next wave of automation and pave the way for Industry 4.0. Experts, in fact, suggest that the 4IR will be the most disruptive period for manufacturing since the first steam engine.

With 5G, factories can transform the way goods are produced and delivered. 5G networks offer manufacturers and telecom operators the chance to build smart factories and truly take advantage of technologies such as automation, artificial intelligence, augmented reality for troubleshooting, and the Internet of Things (IoT).  The mobile 5G technology will allow for higher flexibility, lower cost, and shorter lead times for factory floor production reconfiguration, layout changes, and alterations, enabling intelligent factories to drive productivity and efficiency, while lowering carbon footprint.   

Limitless Opportunities

According to a report[1] from ABI Research, deploying dedicated cellular-enabled Industry 4.0 solutions can generate an operational cost savings return of 10 to 20x over five years. In aggregate, these solutions can generate 8.5% in operational cost savings, which equates to $200 to $600 per square meter per year for a factory or industrial site.

However, economies empowering their manufacturing sector need to understand why and how they can develop the right connectivity strategies to unlock this value.

In Saudi Arabia, for instance, the National Industrial Development and Logistics Program (NIDLP)[2] aims to transform the Kingdom into a leading industrial powerhouse and a global logistics hub – focusing on Industry 4.0 – to generate new job opportunities and enhance the Kingdom’s trade balance and maximize local production.

Driven by Saudi Vision 2030 and its digital initiatives to fulfill the strategic themes of building a ‘thriving economy, a vibrant society and fueling an ambitious nation’, the Kingdom today is among the foremost countries with the ambition of utilizing technologies such as 5G to transform the economic and social landscape of the nation.

This is evident in the Kingdom’s drive to increase technical infrastructure readiness from 50% to 100% by 2025 in industrial cities. This initiative aims to benefit more than 40 industrial cities in Saudi, containing over 7,600 factories[3]. It offers the manufacturers opportunities to explore and adopt digitization and automation techniques and tap into new growth markets.

Furthermore, through a public-private partnership, the Kingdom has been able to collaborate on emerging technologies such as AI/MI, IoT, Edge, robotics, and many more to support the nation’s robust manufacturing sector. Ericsson’s 5G Innovation Hub in Riyadh, for example, was established to help the Kingdom leverage 5G cellular technology by testing new 5G-related use-cases and gain market insights on how it can positively impact Industry 4.0 alongside other growing sectors. Today, 5G is transforming industries, and together with Ericsson, businesses can pave the path toward a fully connected and optimized factory floor. 

5G Fueled Outlook

The rise of Industry 4.0 is the biggest change facing the manufacturing sector today. Yet, through 5G’s limitless connectivity and real-time cyber-physical collaboration it represents a paradigm shift in how factories of the future will operate. Today, no factory can afford to stay away from smart manufacturing and risk losing out on new growth opportunities.  These are exciting times for Industry 4.0, as manufacturers redefine business to create massive efficiencies and opportunities across the value chain. The Saudi manufacturing sector is well-positioned to capitalize on these changes and establish itself as a leading manufacturing and industrial powerhouse.



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Ericsson enables communications service providers to capture the full value of connectivity. The company’s portfolio spans the business areas Networks, Digital Services, Managed Services and Emerging Business. It is designed to help our customers go digital, increase efficiency, and find new revenue streams. Ericsson’s innovation investments have delivered the benefits of mobility and mobile broadband to billions of people globally. Ericsson stock is listed on Nasdaq Stockholm and on Nasdaq New York.




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