Faced with increasing competition, more and more small and medium-sized manufacturing companies are looking for solutions to become more efficient and profitable while meeting the growing expectations of their customers. Increasing productivity by 10% to 25%, or a value of more than $1.8 billion, with the help of the Internet of Things could become a reality as early as next year, according to studies.

Author: Guido Voigt, Lantronix

Decision-makers in small and medium-sized enterprises are considered to be particularly deliberative when it comes to investments in their operations. At the same time, they are the ones who make smart purchasing decisions to ensure that their production meets required quality levels – which often means world-class. It is therefore hardly surprising that this group questions particularly clearly what the introduction of IoT means in their production.

Yet there are good answers to this question, as there are many factors that make IoT attractive to manufacturing:

Short time to market

The faster products can be manufactured and brought to market, the more revenue a company can generate. The Internet of Things in manufacturing and supply chains makes the process more efficient and adaptable to market changes, reducing overall time to market.

Improved security

The Internet of Things can help make the work environment safer and healthier for workers. Devices equipped with sensors can monitor the environment for dangerous situations such as mechanical failure or gas leaks. It can also monitor situations that could lead to workplace injuries, such as employees working under the influence of alcohol.

Lower costs

The Internet of Things lowers costs in many ways, such as reducing machine downtime, lowering inventory costs, and using energy more efficiently. Optimized asset and inventory management also helps reduce operating costs by opening up new revenue streams.

Mass customization

The process of mass customization presents inventory management challenges as the number and variety of SKUs produced increases and individual batches must be produced quickly. Tracking these processes can be difficult or even impossible for some manufacturing companies. However, the Internet of Things is making mass production easier by providing real-time data for planning and forecasting.

The impact of IoT for manufacturing companies

The IoT can revolutionize manufacturing in three areas:

1. increased visibility of operations.

The Internet of Things increases visibility into manufacturing operations and helps operations better manage resources. Even advanced technology tools such as enterprise resource planning and manufacturing execution have blind spots and gaps, such as lack of real-time information or cumbersome manual data entry, that can be closed by the IoT.

These devices provide real-time manufacturing data that can be used to improve processes. Asset management and manufacturing operations applications provide the highest level of visibility.

According to a McKinsey study, IoT applications in manufacturing could reach more than $470 billion in annual revenue by 2025. IoT applications in manufacturing could include devices that monitor and optimize equipment performance, production quality control, and human-machine interaction.

Another aspect of IoT-enabled productivity in manufacturing is monitoring asset utilization. Such solutions can help manufacturers increase productivity by 10% to 25%, which will be worth more than $1.8 billion by 2024, according to ITIF.

Real-time asset metrics help manufacturers understand every stage of the production process. This is achieved by collecting relevant data on equipment parameters such as uptime, operating speed or performance and sending it to the cloud for processing. The data can then be processed and analyzed to gain insights into utilization and plan more efficient processes.

Another advantage is monitoring and quality control. The Internet of Things allows manufacturers to verify work during the production cycle or calibrate manufacturing equipment for precision processes. Both options improve quality control, but checking work during execution is more accurate and time-consuming. Monitoring equipment calibration provides less insight into the process, but can be helpful in uncovering inefficiencies in the production cycle or identifying machines that need routine maintenance.

The Internet of Things can also monitor other aspects of the manufacturing process, such as machine health, equipment calibration and environmental conditions. These parameters are examined for factors that can affect the final product, such as speed, humidity and temperature. If these parameters exceed a threshold, it can lead to product defects or mechanical failures, but IoT monitoring can detect and alert to these issues.

For employee safety, the IoT can help with devices such as RFID tags and wearable sensors. These devices collect data on heart rate, skin reactions, temperature and other medical data that can be compared with historical and contextual data to detect anomalies that could negatively impact health. For example, medical wearables can detect anomalies in heart rate that indicate a possible cardiac event.

2. Visibility in the manufacturing supply chain

End-to-end visibility in the supply chain is the holy grail for many manufacturers, but it remains a challenge to achieve this goal. IoT applications in manufacturing offer a potential solution to improve visibility throughout the process. With supply chains already using cloud-based networks, adding IoT-enabled supply chain management is a simple process that can increase productivity and efficiency.

IoT-enabled supply chain management solutions provide comprehensive visibility into the status, location and condition of products that are on the shop floor, in transit or in the warehouse, regardless of their position in the supply chain.

With traditional methods, the information manufacturers can obtain about a SKU is limited. They are typically general in nature, e.g., they can see that 2,000 items of a SKU are in warehouse C. IoT goes a step further and provides granular information about the SKU, e.g., that 1,000 products were produced a month ago and 500 were produced two days ago.

IoT can also monitor the condition of stored and shipped items. Before IoT, the condition of items was only monitored during delivery, but IoT enables monitoring during transportation to avoid problems with fragile parts or products.

3. visibility of remote and outsourced operations

The increasing complexity of the global supply chain, shortage of local labor, rising logistics costs, and demand for greater personalization and customization pose enormous challenges for manufacturers. These hurdles often force manufacturers to consider offshore or offshore outsourcing options.

However, outsourcing to other regions or countries brings additional challenges. It is important to maintain corporate standards for manufacturing and production regardless of location, which is not possible with traditional methods. The Internet of Things can help keep production standards high and consistent across all locations.

For example, predictive maintenance with IoT can detect potential mechanical failures in advance, giving you the advantage of predictive maintenance scheduling that optimizes your machines without the need for an in-house maintenance team.

Monitoring also allows you to evaluate the efficiency of processes without having to be on-site, which is critical for managing remote teams.

Improve the manufacturing process with IoT

IoT-driven manufacturing is a revolutionary concept for small and medium-sized manufacturers looking to overcome market and supply chain challenges. With IoT, you can maximize productivity with less waste, lower costs and maximum uptime.

About the author 

Guido Voigt is Director of Engineering at Lantronix, a global provider of turnkey solutions and engineering services for the Internet of Things (IoT). Guido’s and Lantronix’ goal is to enable their customers to deliver smart, reliable and secure IoT and OOBM solutions while accelerating time to market.