Over the next decade, the U.S. could be short of 12 million skilled workers, per a report issued by Deloitte. As the availability of skilled labor in manufacturing continues to worsen, original equipment manufacturers are looking for ways to increase manufacturing efficiencies by doing more with less.

Lean manufacturing principles, which form the backbone of smart factories, are being increasingly integrated into everyday operations, with impressive results. OEMs that accelerate adoption of lean manufacturing and the transition to data-led practices can increase their competitive edge in a tight labor market.

Here are four ways that manufacturing companies can increase efficiency and gradually phase into a smart factory.

Increase Employee Productivity

Manufacturing efficiency can be dramatically improved by essentially cutting down the times individual tasks must be unnecessarily duplicated and by untethering employees so they can work from anywhere on the shop floor instead of being tied to a desktop workstation. A smart factory eliminates the paper trail. Digital task management, often done on a mobile device, ensures all jobs are conducted in the right order and by the right employee.

Freeing workers from having to use a desktop increases productivity by cutting down on the distance they must travel to complete a task. Mobile devices that can deliver desktop capabilities on the go enable staff to access enterprise resource planning (ERP) software on the plant floor, eliminating duplicate data entry at the end of the workday.

Improve Asset Maintenance

Manufacturing companies cannot afford unplanned downtime, which puts a $50 billion annual dent in manufacturers’ revenues. They are turning to lean manufacturing principles such as predictive maintenance to ensure that cash flow is not tied up in spare parts that never get used before they get outdated.

Embedded machines on the manufacturing floor of a smart factory deliver data that is continually processed by on-board processors and fed to algorithms that can predict when a machine is about to break down. When a certain preprogrammed threshold is reached, a trigger can be sent to an employee’s smartphone or wearable. Machine learning ensures that the algorithms work with current data, constantly updating the model and making it smarter over time.

Create a Digital Core

The next industrial revolution, Industry 4.0, uses data as its central currency. Data breaks down silos between departments and allows them increased transparency into processes. In the smart factory, such transparency is the engine for a self-correcting automated manufacturing loop, where all decisions — from which goods to manufacture on any given day to which raw materials are to be reordered — can be executed with minimal intervention from workers. Such automation, driven through data, liberates skilled labor from the more mundane aspects of running a manufacturing pipeline and focuses their efforts on where they are most needed.

Data to create the digital core can flow from a number of discrete sources, including embedded devices on the shop floor and inventory scanners in the warehouse. A centralized system to receive and process data into uniform semantics that can drive operational models will also increase the usefulness of data and distinguish good data from bad.

Rethink the Customer Paradigm

To improve manufacturing efficiency, OEMs must work backward from the customer. Why does this matter? In today’s rapid cycle of customer demand and supply, the antiquated and linear design-manufacture-market-sell process does not increase competitive advantage, because demand forecasting is never as effective as ongoing collaboration. When customers are enabled to participate continuously in product design and make updates to their orders, they enjoy a more satisfying, productive relationship.

Many customers have learned to expect digital connectivity with thier manufacturers. An IDC report predicts that by the end of 2019, 75 percent of OEMs around the world will risk losing revenue because they fail to respond to customer needs. A dissatisfied customer leads to unsold goods and setbacks in manufacturing efficiency.

It takes a multifaceted approach to increase manufacturing efficiency. But in the age of Industry 4.0, the transition to these data-driven solutions are well within reach, even for OEMs who have been reluctant to jump on the bandwagon. Much can be gained by adopting digital solutions and phasing the transition to a smart factory.

Read a Forrester report on distinguishing your factory through customer-centric digital transformation.