A Framework for Quantifying Energy and Productivity Benefits of Smart Manufacturing Technologies

The transformative possibilities of smart manufacturing, which is defined by digitization, enhanced connectivity, advanced analytics, and integrated cyber-physical systems in manufacturing processes and systems, have been extensively discussed in the literature. Potential benefits underscored include cost reduction, production flexibility, shorter product times-to-market, energy efficiency, environmental impact reduction, and increased productivity. Scant attention has been given to formal methods for quantifying and analyzing energy productivity to aid a broad range of manufacturing industries in evaluating the merits of adoption. Here we present a strategic analysis framework to estimate cost-effective improvements in energy efficiency and productivity that may be realized through smart manufacturing. The framework uses the cost of conserving energy (CCE) as a complementary measure to determine the feasibility of a set of smart manufacturing interventions in the context of a specific factory, firm, or entire industry. Guided by a function-driven approach based on key performance indicators, the CCE measure accounts for system-wide changes in direct and indirect costs and total energy use relative to the same manufacturing system without smart manufacturing interventions. These changes include cost of cyber-physical systems, which include components such as sensors, controllers, smart equipment, and information and communication technology (ICT) equipment. Additionally, cost and savings are accounted from changes in primary and intermediate inputs, production time, off-spec production, and waste. Energy calculations include upstream energy use of the cyber-physical systems. For complex processes with significant circularity and/or feedbacks, we propose the use of input-output models to characterize elements of the CCE. The framework is discussed in the context of recent efforts in craft breweries to use smart manufacturing for reducing energy intensity and increasing product yield.