Disruption: How the Internet of Things Will Revamp Manufacturing

Disruption: How the Internet of Things Will Revamp Manufacturing

Disruption: How the Internet of Things Will Revamp Manufacturing

The Internet of Things is poised to disrupt multiple industries in the future as the centralized computing paradigm gives way to distributed, data-rich systems. In this series of weekly posts, we will explore how the Internet of Things will change a specific sector, why it’s needed, the trends and drivers, and the outlook going forward. This week, we will explore the future of manufacturing and how the Internet of Things will impact the way that goods are produced and distributed around the world.

Manufacturing is poised to drive enormous economic impact over the next decade. This is truly the next great industrial revolution; the next wave of manufacturing with IoT-enabled devices will enable peer-to-peer communication between products, systems, and machines. Intelligent networks along the entire value chain can communicate and control each other autonomously with significantly reduced intervention by operators. Currently, only 35% of manufacturers are collecting and using data from smart sensors to enhance their processes. While we may still be several years away from widespread adoption of IoT technology, there will be a major impact on five key areas of manufacturing and operations.

Connected Supply Chain

By connecting the production line to suppliers, all stakeholders can understand interdependencies, the flow of materials, and manufacturing cycle times. IoT systems can enable manufacturers to track the location of materials, monitor their inventory, and collect material consumption reports in real-time. All of this information can be fed to an ERP system providing up-to-date accounting and billing. With access to predictive analytics, manufacturers can identify inventory issues, lower their costs, and reduce their capital requirements.


IoT data and networks enables the automation of processes and reduces the need for human intervention to maintain and optimize production systems. Sensors can continuously measure key metrics such as the temperature or pressure of equipment and provide feedback to controllers. Using this feedback, controllers can remotely send instructions for adjustments to the process in close to real-time effectively eliminating the time lags that occur with human intervention. Add the connected supply chain, and suppliers can replenish stock just-in-time, reducing costs of carrying materials and depleted stock.

Remote Monitoring and Management of Assets

With greater visibility between stakeholders, equipment suppliers can have a more direct role in the operations and maintenance of assets in a manufacturing facility. Suppliers and manufacturers can access the efficiency of machines, view production, and reduce the time to decisions and actions. With new service offerings and business models based on visibility and remote monitoring, buyers can use equipment “as-a-service” which creates very closely linked business relationships between manufacturers and their suppliers.

Energy Management

Energy is one of the highest forms of overhead for manufacturing companies. IoT enabled systems can enable manufacturers to avoid peak demand charges and use prediction analysis to understand expenses and plan usage. Utility companies can also communicate with devices directly to prevent system overloads and optimize total cost of energy generation and consumption.

Proactive Maintenance

Preventative and condition-based monitoring is widely being adopted and deployed by manufacturers. The cost of sensors continues to fall, making it cheaper and easier to implement such programs and collect performance data and monitor equipment health. Manufacturers can improve overall equipment effectiveness, minimize equipment failure, and effectively plan downtime for maintenance while maintaining required production levels.

IoT presents a lucrative opportunity for manufacturing by improving and automating decision-making across the value chain. There are many challenges toward this realizing the full potential of this future. Interoperability, security and privacy, infrastructure, and big data analytics are enormous challenges that need to be addressed. While they can be overwhelming, investments in these capabilities can generate business-critical insight to reduce costs and increase efficiency.




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