Sustainable Manufacturing in the Metaverse(Web3.0) : How is the Metaverse taking Smart Factories to its next stage of evolution in Industry4.0 ?

Explaining a technology which doesn't exist yet is quite difficult. Metaverse is also something which isn't there yet in its full form but I have a firm belief that this would be a primary driver in making the process of manufacturing sustainable, automated, collaborative and decentralized worldwide.

What Is the Metaverse?

The metaverse is a digital reality that combines aspects of social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies to allow users to interact virtually. Augmented reality overlays visual elements, sound, and other sensory input onto real-world settings to enhance the user experience. In contrast, virtual reality is entirely virtual and enhances fictional realities. 

Author Neal Stephenson is credited with coining the term "metaverse" in his 1992 science fiction novel "Snow Crash," in which he envisioned lifelike avatars who met in realistic 3D buildings and other virtual reality environments.

Since then, various developments have made mileposts on the way toward a real metaverse, an online virtual world which incorporates augmented reality, virtual reality, 3D holographic avatars, video and other means of communication. As the metaverse expands, it will offer a hyper-real alternative world for you to coexist in. As the metaverse grows, it will create online spaces where user interactions are more multidimensional than current technology supports. Instead of just viewing digital content, users in the metaverse will be able to immerse themselves in a space where the digital and physical worlds converge. 

Expansion of Social Media Beyond Web 2.0

Zuckerberg and the people behind Meta Platforms recognize the capability of technology to allow people to connect and express themselves more naturally. But current social media platforms such as Facebook, Twitter, and TikTok, as well as communication platforms such as Zoom restrict digital human interaction within a two-dimensional plane.

Innovative Communication for Work and Education

The Covid-19 pandemic that started in 2020 compelled businesses from different industries and sectors around the world to embrace digital technologies or online-enabled forms of communication. Remote work or telecommuting and work-from-home arrangements have become a solution to keep these businesses running and individuals employed.

New Opportunities for Businesses and Marketers

Social networking sites and platforms have disrupted the media industry. Unlike the traditional mediums of mass communication such as broadcast and print in which the audience or confined to consuming and receiving messages, the introduction and eventual popularity of social media has enabled the public to become the messenger and content creator themselves.

Complementing the Applications of Blockchain Technology

Another notable advantage of the metaverse is that it supplements or complements the applications of blockchain technology. Note that blockchain is the primary technology behind cryptocurrencies such as Bitcoin, the Ether cryptocurrency of Ethereum platform, Dogecoin, and the Ada cryptocurrency of the Cardano platform.

But blockchain is more than just a technology for implementing and maintaining crypto-coins and crypto-tokens. It is specifically a decentralized or distributed database used as a record or ledger of transactions. Another one of its notable applications is in the creation and distribution of digital assets called non-fungible tokens or NFTs.

Creating and Further Promotion of a Virtual Economy

There are virtual economies existing in the current digital realm. Video games are a notable example. To be specific, interactive video games such as RPGs and MMORPGs, simulation games, action games, and even casual games have internal virtual economies as demonstrated through in-game acquisition and exchange of in-game assets.

A virtual economy is simply an economy existing in a virtual platform. However, it is also worth mentioning that virtual economies are different from real-world economies. People participate in virtual economic activities for entertainment and recreation. On the other hand, participation in the real-world economy is a necessity because it is a matter of survival.

How does a smart factory work?

We often talk about automated processes as if they were unique to a smart factory – yet automation and robotics have been in use for decades in manufacturing operations. Many traditional factories use automated machines such as barcode scanners, cameras, and digitized production equipment in various parts of their operation. But those devices are not interconnected. The people, assets, and data management systems in a traditional factory all operate in isolation from one another and must be manually coordinated and integrated on an ongoing basis.

A smart factory works by integrating machines, people, and Big Data into a single, digitally connected ecosystem. A smart factory not only curates and analyzes data, it actually learns from experience. It interprets and gains insights from data sets to forecast trends and events and to recommend and implement smart manufacturing workflows and automated processes. A smart factory undergoes continuous procedural improvement to self-correct and self-optimize – it can teach itself (and humans) to be more resilient, productive, and safe. 

The basic structure of a smart factory can be broadly summarized into three procedural steps

1. Data acquisition: Artificial intelligence and modern database technologies allow for the curation and acquisition of disparate sets of useful data across the business, supply chain, and the world. By way of sensors and gateways, the Industrial Internet of Things (IIoT) allows connected machines to gather data into the system. Through myriad other data portals, AI-powered systems can compile data sets related to performance, market trends, logistics, or any other potentially relevant source.
2. Data analysis: Machine learning and intelligent business systems use advanced analytics and modern data management solutions to make sense of all the disparate data gathered. IIoT sensors can warn when machines need repair or servicing. Market and operational data can be compiled to spot opportunities and risks. Workflow efficiencies can be studied over time to optimize performance and auto-correct as warranted. In fact, the data sets that can be compared and analyzed present an almost infinite possibility of combinations to inform smart factory optimization and supply chain forecasting.
3. Intelligent factory automation: Once the data acquisition and analysis have taken place, workflows are established and instructions are sent to the machines and devices within the system. These devices may be within the four walls of the factory or far afield in the logistics or manufacturing links in the supply chain. Smart workflows and processes are continually being monitored and optimized. If a news report warns of a spike in demand for a certain product, 3D printer workflows can be instructed to ramp up production priority for that item. If a shipment of raw materials is delayed, inventory buffers can be put into rotation to eliminate any disruption.

Benefits of a smart factory 

Many businesses have made do with supply chain operations and systems that have basically not changed in decades. But with consumer expectations and economic uncertainty at an all-time high, supply chain managers need solutions that can provide measurable and significant benefit – and can bring it quickly. According to Forbes magazine, in 2017 just 43% of manufacturers had smart factory initiatives underway. By 2019, 68% of them did. For companies that invest in digital transformation and smart factory solutions, there is potential for significant business benefits, including:   

• Productivity and efficiency: Throughout its history, manufacturing has primarily been about reacting – looking at an event or a trend that has already happened and then trying to steer the business in a different direction after the fact. Smart factory technologies are designed to reduce the need for reactive practices and move supply chain management into a more resilient and responsive mode. The use of predictive analytics and Big Data analysis allows for optimized processes to be identified and put in place. Just-in-time inventory management, accurate demand forecasting, and improved speed to market are a few of the efficiency benefits that smart factories deliver. Augmented by digital insights, the people working in smart factories are also able to streamline their efforts, adding to the overall productivity of the operation. In their 2019 smart factory study, Deloitte tells us that “Companies report up to 12% gains in areas like manufacturing output, factory utilization, and labor productivity after they invested in smart factory initiatives. Moreover, manufacturers with smart factories will likely surpass traditional factories with 30% higher net labor productivity by 2030.” 
• Sustainability and safety: In a 2019 Nielsen survey, 66% of consumers indicated that they would be willing to spend up to 10% more for products they knew to be sourced and manufactured using socially and environmentally responsible methods. Modern smart factory technologies make it easier than ever for businesses to identify and implement opportunities for more green, safe, and socially responsible manufacturing practices. Digital innovations such as blockchain and RFID sensors can be used by smart factory managers to ensure irrefutable provenance and quality control of all materials and supplies – coming from even the most distant links in the supply chain. And closer to home, the International Society of Automation reports that robots and automated devices can help reduce or eliminate three out of the five leading causes for workplace injuries.
• Product quality and customer experience: Much like the kids’ telephone game, traditional manufacturers often had a difficult time ensuring their directives were being accurately received and followed by the lower tier suppliers and manufacturers in their supply chains. In the smart factory, cloud connectivity and end-to-end visibility in smart factories brings real-time insights and recommendations to all tiers of the manufacturing process. The ability for rapid customization and response to shifting trends means that products are tightly up to date with customer desires. Advanced analysis of system data quickly spots weaknesses or areas for improvement. This leads to improved competitiveness in the market, better product reviews, and fewer costly returns or recalls.

Smart factory technologies 

Smart factory technologies are highly agile. As digital transformation initiatives ramp up within a business, there are almost infinite possibilities to scale, modify, and adapt as needed. 

• Cloud connectivity: Whether public, private, or hybrid, the cloud is the conduit through which all data and information flows across a smart factory. Business-wide and global cloud connectivity ensures that each area of the business is operating with real-time data and that there is immediate visibility into all the connected assets and systems within the supply chain.  
• Artificial intelligence: Operational systems that use integrated AI technologies have the speed, power, and flexibility to not only gather and analyze disparate data sets, but to provide real-time insights and responsive recommendations. The automated processes and intelligent systems within a smart factory are continually optimized and informed by artificial intelligence.  
• Machine learning: One of the most valuable benefits that machine learning brings to the smart factory is its capacity for advanced predictive maintenance. By monitoring and analyzing manufacturing processes, alerts can be sent out before system failure occurs. Depending upon the situation, automated maintenance can take place or, if necessary, human intervention can be recommended. 
• Big Data: Robust and large data sets allow predictive and advanced analytics to take place in a smart factory. Businesses have long understood the strategic value of Big Data but, until recently, have often lacked the systems necessary to make meaningful use of it. Digital transformation in supply chains and smart factories has opened up a world of potential for businesses to optimize and innovate using Big Data insights.  
• Industrial Internet of Things (IIoT): In a smart factory, when devices and machines are fitted with unique identifiers and the ability to send and receive digital data, they comprise an IIoT network. Modern machinery may already have digital portals but even decades-old analog machines can be fitted with IIoT gateway devices to bring them up to speed. Essentially, data sent from the device reports on its status and activity, and data sent to the device controls and automates its actions and workflows.  
• Digital twins: An exact, virtual replica of a machine or system becomes its digital twin. It allows for maximum innovation and creativity with minimal operational risk. A digital twin can be pushed to its limit, reconfigured in multiple virtual ways, or tested for its compatibility within an existing system – all without ever incurring risk or resource wastage in the physical world.  
• Additive printing: Also known as 3D printing, it allows smart factories to use intelligent automation for on-demand manufacturing. This is particularly crucial in times of unexpected supply chain disruption or sudden product demand. But even when it’s business as usual, virtual inventories can greatly minimize risk and waste by allowing just-in-time manufacturing. 
• Virtual reality (VR) and augmented reality (AR): In 2019, Assembly Magazine described some of the applications of VR wearables in the smart factory as “being able to tie together environmental conditions, inventory levels, process state, assembly error data, utilization, and throughput metrics in a context-dependent manner (where you look or walk).” This immersive sensory experience lets users augment their natural senses with real-time data from across any location or point in time – to give unobstructed awareness of factory status.  
• Blockchain: Fortunately, as smart factory technologies advance, security solutions are keeping pace alongside them. Blockchain has many applications in the supply chain, from creating “smart contracts” with suppliers to tracking the provenance of goods and handling across the supply chain journey. In smart factories, blockchain is especially useful to manage access to connected assets and machines across the business – protecting the security of the system and the accuracy of records held by those devices.  
• Modern database: In-memory databases and modern ERP systems are the “brains” behind Industry 4.0 and all smart factory and intelligent supply chain solutions. Legacy, disk-based databases are pushed – often well beyond their limits – to keep up with the complex data management and analytics functionality needed to run smart factories and modern supply chains. 

How Is Manufacturing Done Today?

Manufacturing is an incredibly complicated process and is probably the most critical step in supply chain management. Many different manufacturing strategies in today’s market optimize for different objectives. These strategies often consider labor costs, inventory control, overhead customization, and speed of production. You can find out more about these strategies here, but at a high level, these are the top three production strategies:

1. Make-to-stock: Optimization based on demand forecasts (using different signals such as seasonality, market size, etc.)
2. Make-to-order: Custom build products to specifications (typically used for heavy machinery)
3. Make-to-assemble: Hybrid model of the first two strategies that allows some components to be customizable based on customer demand.

In terms of the practicality of manufacturing, the main pain points with all of these models are long lead times, long-term fixed contracts, and quality control concerns from specific manufacturers. Furthermore, there are often risks in production design since there could be minor mistakes in facility layout, leading to faulty products and longer wait times for manufacturing. These mistakes usually cost businesses millions or billions of dollars to fix and can lead to scheduling delays that cause customer dissatisfaction.

How Do We Leverage the Metaverse for Manufacturing?

A metaverse-driven approach to manufacturing is akin to companies like Shopify democratizing e-commerce and facilitating relationships between business owners and suppliers. In the context of the metaverse, you have three key stakeholders in the manufacturing process:

1. Design Companies/Owners: Individuals or companies that will use simulation and CAD-like software to design factory layouts as well as design components to be manufactured.
2. 3rd Party Manufacturers and Logistics Providers: Individuals or companies in the supply chain ecosystem that will be able to set up manufacturing centers and produce different commodities with less friction and smaller lead times.
3. Customers: These users will see the delivery time for products in realtime.

Ultimately, there are key facets of a service-based metaverse that will change the manufacturing landscape for all of these stakeholders. Below are some of the key highlights:

• Rapid production process design — In a metaverse framework, you could easily drag-and-drop your assets in a physics-based simulation and can easily identify how to be more efficient or safe in manufacturing without needing to perform significant physical testing.
• Increase in number of product designs — As with any new technology where there is ease-of-access for user-generated content, there is an expectation to see more content provided within specific genres and business segments (similar to how content is handled by Youtube). In the case of manufacturing, the barrier to entry for designing low-cost, easy-to-build products is significantly lower with more specific measurements and advanced CAD-like softwares.
• More collaborative product development — The metaverse is a communal space for sharing ideas. As such, it is incredibly easy for different stakeholders within a business to design a product, share it with manufacturers within the same environment, and iterate based on feedback, which will shorten the product life cycle for projects.
• Reduced risk to quality control — With more detailed, physics-based designs, the margin of error for production is much smaller. In terms of impact to businesses, they will see lower churn rates for customers as well as lower return rates for defective products.
• Increased transparency for customers — Customers in the metaverse will have improved visibility into the supply chain process with 3D representations for how products are built, distributed, and sold. Increased transparency means that customers will be able to know what exact lead times are for goods and any expected delays in shipping, as well as more visibility into real-time shipping costs for different distributors for both freight and last-mile delivery.

What are the Next Steps to Optimize Manufacturing Processes?

Realistically, in the near term (5–10 years), five core areas need to see improvement before applying the metaverse to manufacturing can be done:

• Scaling Data Warehousing — Currently, most manufacturing businesses still rely on legacy systems for warehousing data provided by SAP and similar SaaS companies. In order to improve, manufacturing and logistics providers need to update their inventory management software using tools provided by FourKites or project44. These tools not only provide visibility but also enable businesses to better forecast inventory based on demand sensing algorithms.
• Improving Physics Engines for Simulation Softwares — In present scenario, facilities design softwares are fairly rudimentary when it comes to simulation. Prominent software tools such as Simio or AnyLogic focus less on physics and more on Monte Carlo simulations based on stochastic systems, which is not accurate in reality since a user will need to account for errors due to general mechanics in the real world. These simulation tools will need to be combined with physics-based tools such as SolidWorks in order to be viable for the metaverse.
• Apply Social Networking Fundamentals to Business Services — Most social networking platforms have focused on creating spaces for friends, professionals, and gamers. There is a lot of room to capitalize on this space within the metaverse for consumer services.
• Improving Cloud Infrastructure — Low latency solutions that can support significantly large numbers of concurrent users are incredibly important to storing product and process designs and collaboration. Both the Nvidia Omniverse and Amazon Cloudfront are examples of advancements in hardware and software in this space.
• New Consumer Hardware Applications — Devices such as VR/AR headsets provided by Oculus still have a long way to go before they become cheap enough and commercially viable to businesses to use in day-to-day planning.

Many of these areas are currently being worked on in parallel to transform how we think of supply chains digitally. This is an incredibly exciting time for innovation in operations management at a broad level, given applications from different technologies such as blockchain, AI, and cloud. Among these technologies also lies a spot for applying metaverse fundamentals to disrupt manufacturing systems.