- Blog , Engineering & Production
- Published on: 18.03.2025
- 14:10 mins
The Road to a Flexible Production System: Software-Defined Manufacturing as a Key Success Factor
Manufacturing companies are facing a critical turning point: the market is increasingly demanding customization, speed, and flexibility. Traditional production systems quickly reach their limits, as every new product variant requires costly reinvestment and ties up valuable resources.
Software-Defined Manufacturing provides an innovative solution. It decouples hardware from software, enabling flexible and agile adjustments to changing requirements without time-consuming retooling.
In this article, you will learn how Software-Defined Manufacturing can make your production more efficient, scalable, and competitive.
Challenges of Rigid Production Systems in the BANI World
In today's BANI (Brittleness, Anxiety, Non-linearity, Incomprehensibility) world, manufacturing companies in particular face numerous challenges. Rigid production systems, designed for efficiency and stability with a high degree of predictability, are reaching their limits.
Editor's note:
When we refer to rigid production systems in this article, we are primarily focusing on systems that are locally controlled by a physical Programmable Logic Controller (PLC) that is specifically configured for a single machine or plant.
Rigid structures are difficult to adapt to unpredictable market demands. This is due to the tight coupling between hardware and software, which makes it difficult to implement necessary system adjustments because local changes can only be made by physical intervention. In addition, innovation today is primarily in software, where innovation cycles are much shorter than in hardware. As a result, production systems quickly become obsolete.
This obsolescence and lack of flexibility leads to higher maintenance and operating costs, as well as inefficient use of resources. As a result, rigid systems tie up valuable capital that could be more efficiently invested in innovation.
Another challenge is the presence of data silos, which hinder the efficient exchange of information between departments and systems. This makes data-driven decision-making more difficult and complicates the analysis and optimization of processes.
The following section explains the advantages of flexible production.
Why Flexible Production Systems Make Sense
Flexible production allows companies to respond dynamically to complex market and customer demands while adapting processes to constantly changing conditions. Additionally, companies benefit from cost efficiency, sustainability, resilience, and adaptability.
Adaptability and agility
Flexible production concepts enable shorter time-to-market cycles and increase production flexibility to effectively handle unpredictable challenges.
Efficiency and optimized resource utilization
Flexible production also allows companies to streamline processes and reduce downtime. For example, if site A is unavailable, a flexible company can continue production at site B. This site-independence enables optimal utilization of production capacity.
Cost control and investment planning
A hallmark of flexible manufacturing is its ability to adapt quickly and easily. If many of these adjustments can be made centrally via software – without complex reconfigurations of machine or system controls – cost savings can be achieved over time. In addition, production capacity can be scaled more cost-effectively than with conventional systems. This means that targeted investments in flexible production systems and equipment lead to greater long-term profitability. By making their production more flexible, companies ensure agility and innovation in an uncertain and dynamic environment.
The Key to Flexibility: Decoupling Hardware from Software
To achieve the necessary flexibility in production, existing structures must be transformed by decoupling the rigid connection between machine hardware and its software. This approach frees production control from being tied to specific machines. Instead, companies gain software-defined systems that allow them to configure, plan, monitor, and control their production through software.
This approach, known as Software-Defined Manufacturing, is the foundation for agile, efficient and scalable production that is future-proofed and ready for the BANI world.
Use case: Software-Defined Manufacturing in practice
One example of Software-Defined Manufacturing is the flexible control of robotic arms in a manufacturing facility. In a rigid production system, each robotic arm would be tied to specific control software. If production requirements change, for example, switching from one product to another, the hardware, meaning the robotic arm itself, would need to be reprogrammed or replaced. These software updates typically need to be done locally and often with the help of external maintenance companies.
By decoupling the hardware from its software, this rigid connection is eliminated, along with the need for local software maintenance. With Software-Defined Manufacturing, the robotic arm is controlled through a central, flexible software platform that is independent of the specific hardware. This allows the robotic arm to be quickly and easily reprogrammed for different tasks, without requiring major hardware adjustments. A new product design primarily requires adapting the software, which significantly increases flexibility and makes production processes more agile. In this way, Software-Defined Manufacturing enhances the global adaptability of production.
How to Make Your Production More Flexible
Transitioning from rigid, tightly coupled structures to modular, software-defined production systems is a comprehensive process. Therefore, a step-by-step approach is recommended. Decoupling hardware from software forms the starting point. Overall, this process includes three successive phases for the complete implementation of Software-Defined Manufacturing, which can be tackled in parallel depending on the maturity of the available technologies and the implementing company. In addition, there are five supporting building blocks that provide the basic framework for the IT (Information Technology) and OT (Operational Technology) architecture. The specific approach and technical requirements for production are discussed in more detail below.
The 3 phases on the path to flexible manufacturing
The journey to flexible production involves the following three phases:
- Phase 1: Decoupling hardware from software
The first phase involves decoupling the hardware from its software in machines and systems on the shop floor. This creates the foundation for Software-Defined Manufacturing. The focus lies on implementing a flexible, modular software architecture with a central control unit for all shop floor components. - Phase 2: Implementing the Process Orchestration Layer (POL)
The second phase focuses on implementing the Process Orchestration Layer. The POL acts as a central control layer that bridges the production lines and the overarching control system. This orchestration layer ensures transparency across all processes and forms the basis for efficient and flexible control of all production processes. - Phase 3: Activating the local optimization tool
In the third phase, a Local Optimizer is deployed. It analyzes production processes in real-time and continuously optimizes them. This tool, at the production site level, is based on the long-term corporate strategy or objectives, such as maximizing profit by producing specific assemblies that yield the highest margin. The Optimizer passes the “model specifications” to the individual components of the production system, influencing decisions or the optimum performance of individual systems and the overall production system within the overarching goal. Through this data-driven approach, production remains efficient and agile, enabling companies to quickly and precisely respond to new challenges without losing sight of long-term objectives.
5 building blocks as technology enablers
Five key building blocks are required for the technical implementation of Software-Defined Manufacturing: Communications, Data Insights, Standardized Models, Process Orchestration and Optimization, and IT/OT Operations. Together, these building blocks form the technological foundation for an efficient shop floor IT/OT architecture, with the introduction of individual use cases already leading to significant efficiency gains. When combined, the advantages are amplified. This modular approach allows companies to immediately unlock optimization potential while gradually moving toward a long-term flexible and efficient production environment.
Communication
The existing IT/OT infrastructure on the shop floor is characterized by high complexity due to numerous, often unknown 1:1 interfaces between different entities such as machines, systems and equipment. This results in high operational risks and costs, as each interface needs to be created and monitored with significant effort.
To break up this rigid infrastructure, the Manufacturing Service Bus (MSB) is used. The MSB acts as a central IT system in each facility, solely responsible for message transmission between the aforementioned entities, similar to a postal system that receives and delivers messages to their recipients.
The MSB connects all the players on the plant floor and enables real-time data and information exchange. By reducing the number of interfaces to one per system, operational complexity, monitoring and integration of new machines can be significantly reduced.
In addition, the introduction of the MSB lays the foundation for entity autonomy, which plays a central role in Process Orchestration and Optimization. In this way, entities can not only participate in the value creation of production in parallel, but also reduce the complexity of integrating new players, such as new machines or IT systems.
Data Insights
In flexible production environments, data from various sources, such as machines, sensors, or IT systems, often leads to a fragmented and complex data landscape. The distribution across different databases increases management costs and makes it difficult to use this data for informed decisions and process optimization.
Data Insights solves this problem by centralizing data from multiple sources on a cloud platform. This data is extracted, structured, and enriched with contextual knowledge through a process known as ingestion. This contextualization makes the data actionable by establishing relationships between machine data, order information, and production processes.
A key benefit is the ability to stream and monitor data in real time to the cloud. This makes it possible to immediately identify weaknesses or deviations and take action, such as process adjustments or preventive maintenance. Using cloud services also provides access to advanced technologies, such as AI-powered analytics, without requiring companies to build their own infrastructure. Centralized data processing improves cost efficiency, scalability, and visibility.
Standardized Models
Today’s PPR (Product, Process, Resource) models are often not standardized and closely tied to the systems of specific software providers. The lack of standardization creates lock-in effects, meaning customers become overly dependent on specific platforms. This hinders data democratization.
Definition and role of the PPR model
The PPR model structures the product creation process by describing the three central elements of a manufacturing system: the product (what is being produced), the processes (how it is produced), and the resources (what is used to make it).
The PPR model plays a key role in the digitalization of production.
1. Production control: Product, process, and resource information must be complete and clearly represented in production control systems.
2. Data contextualization: All data collected during production must be captured in the context of the PPR model. This is the only way to ensure that data is interpreted meaningfully and that its qualitative use is guaranteed.
Standardized Models enable a uniform and vendor-independent description of data related to product, process, and resource. This improves compatibility between different systems, creates transparent and open access to data, and simplifies data contextualization. A concrete example of this is the Asset Administration Shell (AAS) developed by the Industrial Digital Twin Association (IDTA), which allows for a standardized and vendor-independent description of assets such as machines.
Process Orchestration and Optimization
In the traditional automation pyramid (ISA-95), the various levels of automation and information systems in a manufacturing operation are organized hierarchically.
However, this traditional approach presents several challenges, such as a lack of flexibility and scalability. Additionally, high operational costs arise from limited adaptability and the absence of integration of modern architectural principles, such as service and object orientation, into the control software. To address these issues, the “autonomous actor” approach opens up new possibilities.
By introducing autonomy based on the MSB, each actor is empowered to optimize its own subprocess and achieve its own optimal performance. When granting autonomy, it is crucial to ensure that each actor only takes on control tasks within their area of expertise.
The challenge lies in orchestrating the optimum of individual subprocesses from the autonomous actors into an overarching optimum, ensuring that the entire process of a production site, a line, etc., is made more efficient. This is achieved through central process orchestration, ensuring that all actors collaborate seamlessly in real time and are optimized based on data.
IT/OT Operations
The continuous digitalization of production requires closer integration of IT and OT. Traditional OT software, such as those used in PLCs and Supervisory Control and Data Acquisition (SCADA) systems, often relies on application-specific local solutions without modern, end-to-end architectural principles. This makes them inflexible, difficult to maintain, and risky.
To make production future-proof, software components from OT are being transferred to IT's responsibility. This allows modern development standards to be used, enabling a more flexible and secure design of production software. By transferring data and processes from OT to IT, production is operated in the same way as a data center: scalable, centrally controlled, highly automated, and efficiently monitored.
Opportunities of Flexible Production
The five building blocks form the foundation for a future-proof Software-Defined Manufacturing system. By implementing them, you transform your production into a highly flexible, efficient overall system that can respond optimally to changes.
Seamlessly integrating new technologies
Open, software-defined systems allow you to seamlessly integrate technologies like AI, Internet of Things (IoT), and Big Data Analytics as services. This keeps you flexible and enables you to quickly leverage innovations without disrupting existing processes. Additionally, production processes can be adapted to changing market conditions at the push of a button and in real-time. Moreover, SDM extends the lifespan of your machines, as they become more versatile, which also increases the Return on Investment (ROI).
Flexibility enables modularity
After decoupling hardware and software, individual machines and systems can be replaced using a plug-and-produce principle. Instead of replacing an entire machine, individual modules or components can be flexibly swapped out. This reduces costs, minimizes downtime, and simplifies the integration of new technologies.
At the same time, software updates can be implemented decentrally on existing machines. Adjustments or optimizations can be made across locations without the need for physical interventions on the hardware. This ensures that production systems remain scalable and future-proof in the long term.
This creates an overarching, modular manufacturing environment that can quickly adapt to changing requirements.
Optimizing data usage
Furthermore, the decoupling of hardware and software enables seamless data collection and real-time analysis across the entire production chain. In this way, data flows centrally and transparently through the production systems, providing a foundation for continuous optimization. This allows you to immediately adjust production processes based on real-time analysis when issues arise or demand fluctuates. By centralizing data availability, you overcome data silos, enabling you to make informed decisions and proactively manage production processes.
How MHP Helps You Establish a Flexible Production System
The opportunities of flexible manufacturing demonstrate the relevance of Software-Defined Manufacturing. Whether you are creating flexibility from the outset through new, modular production systems (Greenfield Approach) or gradually adapting and retrofitting existing facilities (Brownfield Approach), MHP provides comprehensive support in making your production more flexible, starting from your individual point of origin.
With our deep expertise and years of experience – for example, in decoupling hardware from software and process orchestration – we help elevate your production to a new level.
Our approach considers not only the IT/OT architecture conceptualization discussed in this blog post but also the strategy and implementation. In the three dimensions we structure with a Target Operating Model, the conceptualization phase forms the core for building a flexible production system.
Thanks to our cross-dimensional expertise, we can operate End-to-End (E2E) and thus ensure that all phases are smoothly coordinated.
Conclusion: Bring More Flexibility to Your Production!
When your company faces the challenges of a dynamic and uncertain world, a strategic and operational shift toward decoupled, modular, and thus flexible production systems provides a comprehensive solution. However, this requires investments in flexible production architectures and consistent data continuity. Decoupling hardware from software forms the foundation for Software-Defined Manufacturing.
The goal is to create a dynamic and agile production environment that can quickly and precisely adapt to new demands. This is the only way to achieve a competitive, resilient, and sustainable production system that can hold its ground in the global marketplace, both in the long term and in the face of unforeseen developments.
FAQs
Flexible production refers to the ability of a production system to quickly and efficiently adapt to changing market demands, customer-specific requirements, or fluctuations in demand. This is achieved through flexible machines, automation technologies, and adaptable production processes that enable the manufacturing of different product variants without major retooling.
Flexibilizing production is crucial in today’s BANI world because it helps companies respond agilely to uncertainties, sudden changes, and complex demands. It enables quick adaptation to market and demand fluctuations, improves resilience, and ensures competitiveness in an unstable and nonlinear environment.
Decoupling enables flexible and scalable production adjustments since the control system operates independently of specific hardware. This allows systems to be updated faster and new technologies to be integrated seamlessly. As a result, processes become more efficient, costs are reduced, and the system becomes more responsive to market demands.
Data analysis and Big Data enable the collection and evaluation of large volumes of data to monitor, optimize, and control production processes. For example, they allow for predicting bottlenecks based on data insights and making real-time decisions.
Jonas Mellmann
Management Consultant
Beatrix Haberl
Management Consultant
Denise Kleinert
Management Consultant
Thomas Kluee
Senior Manager
