The Role of IoT in Smart Manufacturing


The biggest industry in the world, manufacturing, cannot but be influenced by modern technologies. Today, the Internet of Things has an increasing influence on manufacturing, transforming both production and business management processes and creating smart factories. And it’s true to say that IoT is one of the core driving forces behind Industry 4.0 (aka the Fourth Industrial Revolution). In this article, we discuss the role of IoT in smart manufacturing and explain how connected devices can help manufacturers reduce production risks.

Smart Manufacturing Defined

Manufacturing is the production of a wide range of goods using human labor and machines. In recent decades, the industry has been implementing various digital technologies that have been gradually reducing human participation in production processes.

The following are the current top digital trends in manufacturing:

  • The Internet of Things — connected sensors and devices collect valuable data to simplify and improve industrial activities.
  • AI and machine learning — advanced algorithms analyze raw data and transform it into effective actions.
  • Robotics — industrial robots have been working in factories alongside human workers for quite some time. They help create efficiencies at all stages, from raw material to final product, are able to operate 24/7, and are highly cost effective.
  • Big Data and industrial analytics —  these technologies enable manufacturers to manage, update and analyze increasing amounts of digital content (consumer and product information), while decreasing cost and downtime.

Many enterprises have by now transformed their processes into smart manufacturing — the industrial branch based on intelligent automation and empowered by smart digital solutions with the aim to optimize production.

What is smart manufacturing

Smart manufacturing accelerates productivity, increases efficiency, minimizes downtime and provides a competitive edge for businesses.

Read also: How Will IoT Transform the Insurance Industry?

Internet of Things in Smart Manufacturing

In 2017, the Internet of Things reached the enterprise level, and is now at the very heart of industrial digital transformation. IoT solutions for smart manufacturing have created a subset of the technology — the Industrial Internet of Things (IIoT).

Manufacturing is the sector most affected by IIoT, with a potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025.


Source: Cisco

In general, the implementation of IoT for smart manufacturing is one of the key goals for numerous enterprises. A survey conducted in Germany by PwC reveals the following findings:

  • 91% of enterprises are investing in IoT and smart manufacturing.
  • 6% consider their factories to be fully digitized.
  • 75% invested in digital factories in order to better meet customer preferences.
  • 50% of respondents expect ROI from digitization in five years.
  • Companies expect a total of 12% efficiency gains over five years.

The German industrial IoT market will see rapid growth by 2025 in terms of three components: solution, service and platform.


Source: Grand View Research

How IoT Revolutionizes Manufacturing

The face of the manufacturing industry has been completely transformed by the replacement of humans by connected devices in numerous processes.

  • Advanced analysis. The integration of IoT-connected devices and relevant software solutions enables powerful analytics to predict failures and optimize maintenance. Sensors monitor networks and integral devices, measure performance indexes, assess operation features, alert users about malfunctions and react to abnormal events. Advanced analysis dramatically increases equipment efficiency, performance and uptime, as deficiencies do not go unnoticed.
  • Inventory level monitoring. In maintenance, repair and operations environments, IoT-connected devices monitor distributed inventory and tank fluid levels, the condition of wear parts and production rates, which enhances the communication between manufacturers and suppliers. Also, proper monitoring enables quick and effort-efficient identification of issues that adversely impact product quality or time-to-market.
  • Remote process monitoring and equipment configuration. Employees can remotely collect information on production processes and check whether they or their outcome meet specific regulations and requirements. In addition, they can tune and configure devices remotely, significantly saving time and effort.
  • Abnormality reporting. Human participation is no longer required to identify possible abnormalities in the performance and condition of equipment: IoT-connected machines alert responsible personnel about the deterioration of equipment, leaving employees to only take remediation steps.
  • Virtual equipment management. Automated devices allow employees to fix many performance issues via virtual networks, without being physically present, thus streamlining the management and monitoring of equipment. Also, virtual equipment monitoring allows employees to be aware of device location, including of movable assets.

As you can see, connected devices integrate employees, facilities, equipment and databases into comprehensive networks that can improve management at all manufacturing stages.

Read also: What Is the Internet of Everything (IoE)?

Four Benefits of IoT for Manufacturers

The majority of manufacturers are ready to transform their business because they see definite advantages of implementing industrial IoT in smart manufacturing.


1. Cost Efficiency

The greatest expenses for manufacturing firms are energy, materials and losses due to downtime. Process automation is the hallmark of IoT and results in a considerable reduction of operational costs.

Intelligent machines and data analytic software monitoring equipment analyze collected data and react to changes in the production process, such as material shortages, equipment malfunction, inefficient energy consumption and more, and allow employees to quickly fix the problems.

2. Improved Decision-Making

Resource management and asset optimization that involve both humans and machines require comprehensive data. IoT-based sensors gather valuable data and distribute it through robust networks in real time. Fast information flow throughout the manufacturing facility enables the ongoing creation of dashboard metrics that help broadcast results and facilitate decision-making.

When using IoT technology, managers are equipped with accurate insights and are continuously aware of the performance of systems and devices, which results in faster and better-informed decision-making.

Read also: Internet of Things in Healthcare: IoT-Connected Medical Devices

3. Quick Time-to-Market

IoT empowers direct communication between employees and network components, significantly enhancing productivity.

Also, real-time data access enables faster decision-making and contributes to improved responses to market fluctuations. That is why new products quickly move from concept to commercialization, contributing to significant time savings.

4. High Customer Satisfaction

Quality is the decisive factor that determines the behavior of potential customers and turns prospects into loyal clients. The Internet of Things technology provides predictive maintenance tools together with statistical evaluations that help innovate, plan, design, build, operate and maintain industrial facilities, resulting in improved quality of goods.

Moreover, connected devices eliminate human error and prevent the commercial distribution of defective goods, which significantly enhances customer satisfaction.

Challenges of Implementing IoT in Manufacturing

With such significant benefits to be realized, why are some manufacturers still holding back from implementing a comprehensive plan to connect the entire floor, or even the entire business?

Transformation of large, mature systems always requires a lot of effort and energy, no matter the industry. The adoption of the Internet of Things in manufacturing faces some significant challenges as well.

1. Security

Security remains the greatest concern of all connected devices because data is transmitted between numerous nodes and can be extremely vulnerable without proper security measures.

Today, manufacturing is the primary victim of hacking attacks. When traditional factories transform to digital ones, they turn into IP-based systems where each connected item is vulnerable to cybercrime. That is why manufacturers should prioritize security and safety by stipulating efficient protection solutions.


Manufacturers must adapt to sophisticated hacking technologies in order to avoid data loss, theft of intellectual property or other intrusions. Legacy equipment that incorporates IoT technology should be equipped with defensive tools. In the creation of a new connected environment, the security strategy should be considered from the very beginning.

Read also: A Mobile App for a Smart Home Solution: Takeaways and Guidelines

2. Skills Gap

With the increasing number of smart factories, the skills gap among employees is growing wider. Modern technologies implemented in production require qualified specialists and data scientists who understand new processes and can manage them.

It can also be difficult for industry executives to make decisions due to the lack of knowledge and IoT competencies. As a result, over the next decade, 2 million manufacturing jobs may become vacant due to the skills gap.

To address this problem, educational training on the Internet of Things and other technologies should be implemented as soon as possible.

3. Seamless Integration

Another challenge is how to seamlessly incorporate all devices into a huge manufacturing infrastructure and provide suitable networking capabilities.

To solve this problem, other intelligent solutions such as artificial intelligence, machine learning, 5G connectivity, augmented reality or digital twins should be used to simplify the process.

Guidelines for Success in IoT Transformation

To stay competitive and bring value from IoT to the business, manufacturers should:

  • automate and upgrade their processes with the help of strong automation vendors;
  • cooperate with experienced data scientists, developers and other companies that have already succeeded in this field;
  • consider the security strategy from the very beginning;
  • invest in the education and professional training of their employees.

Get Ready to Connect Your Business

The potential of smart manufacturing is enormous and should not be overlooked. Business leaders should realize this power and trust in the success of digital transformation, while at the same time considering IoT manufacturing risks.

SaM Solutions can become your reliable partner in creating embedded and IoT solutions. Our service offering includes a complete range of end-to-end embedded software development services, firmware and middleware development for IoT systems, cloud IoT platforms, human-machine interfaces and end-user applications, and more.

Contact us for a consultation. Leverage the power of IoT with SaM Solutions.

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About the author

Natallia Sakovich
Natallia Sakovich

A copywriter at SaM Solutions, Natallia is devoted to her motto — to write simply and clearly about complicated things. Backed up with a 5-year experience in copywriting, she creates informative but exciting articles on high technologies.