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Manufacturing is changing dramatically. Industry 4.0 is taking shape and being viewed as the advent of smart technologies based on the Industrial Internet of Things (IIoT). It’s affecting everyone, with impacts that ripple across the supply chain.

Your IIoT Primer

The IIoT represents the convergence of three technologies: connectivity, low-cost sensors and advanced analytics. Let’s break this down:

Connectivity – WiFi and Bluetooth enabled devices like thermostats or smart speakers help make our lives better and easier. Now those same technologies are making their way into factories. Machines are being networked, but so too are individual sensors.

Low-cost sensors – Accelerometers, temperature sensors, light sensors and similar devices are growing smaller and cheaper to a point where it’s practical to monitor every property and parameter of every piece of manufacturing equipment.

Data analytics – Sometimes referred to as “Big Data”, cloud-based software can trawl through immense data sets to identify patterns and trends otherwise undetectable.

Adding connectivity to sensors and integrating them into manufacturing equipment can prove beneficial. You will then have machines that can report a wealth of data about their operating conditions and what they’re doing with this data. Feed this into Big Data tools and suddenly engineers and operations managers have far more information about what’s happening on the factory floor.

Process Insights and Smart Manufacturing

Here are some ways in which the IIoT benefits manufacturers:

Improve asset utilization – Most manufacturers measure Overall Equipment Effectiveness (OEE) to identify where capacity is being lost. Changeovers, waiting for material, shift changes, scrap and low yields are just a few examples. IIoT technology provides data on which to base critical decisions.

Increase flexibility – Real time data on machine availability, speeds and so on, can be fed into the Cloud ERP system, enabling faster decision-making and more accurate scenario evaluation. For example, when a customer asks for a rush order, the manufacturer can see how to fit it in using real data rather than estimates.

Machine condition monitoring – Temperatures, vibration signatures and motor torque are just a few examples. Such data enables predictive maintenance, fixing problems before they lead to breakdowns. This benefits OEE, enables better schedule adherence and reduces the amount of maintenance being performed by letting managers prioritize and do only what’s needed.

Quality – Manufacturing operations often struggle with variability in incoming materials. Adapting to differences in material strength, dimensions and finish slows production, increases waste and results in inconsistent products that disappoint customers. But machines that can sense such differences adjust parameters to achieve high levels of consistency. In other words, they’re “smart.”

If we were to sum up these changes in a phrase, it would be: lower costs, less waste, higher quality, but also, more flexibility.

Some IIoT Examples

These advanced technologies and concepts are newer, so applications are actively being sought and developed. A few examples of the IIoT and smart manufacturing at work include:

  • A press monitors deflection and load applied, so detecting deviations of material hardness from what is expected and adjusting the bending process to suit.
  • A machine tool line reports data on speeds, motor current drawn, vibration and the operation of actuators. This gives the business improved uptime and availability data, enabling more precise scheduling.
  • In electronics manufacturing, a line reports process data including soldering temperatures, component placement precision and test results. Deviations from process norms are identified quickly and changes made, reducing rework and warranty claims.

Supply Chain Impacts

So how does the IIoT and smart manufacturing affect the supply chain? Well, simply put, shorter lead times, less inventory and less waiting.

IIoT technology will make manufacturers more flexible. When combined with advanced ERP systems, there will be a greatly increased ability to juggle and adjust schedules. In addition, machine changeover times will be much quicker. Two trends to expect are:

Improved schedule adherence – With less waste and unplanned downtime eliminated, goods can be manufactured exactly when planned. There will be fewer shortages, stoppages or delays.

Less finished goods inventory – Why carry goods in stock when they can be produced with little to no lead time? The flexibility of smart manufacturing will take away the cost penalty of short production runs, enabling far more manufacturers to adopt make-to-order strategies.

The IIoT Changes Everything

The IIoT is bringing about a revolution in manufacturing. Smart, connected sensors plus advanced analytics will yield unimagined insights into manufacturing performance. Schedule adherence will improve dramatically while costs fall and short runs become more economical.

Impacts will be felt across the supply chain. Inventory holding and ordering patterns will change dramatically and businesses will be challenged to respond. One thing is for sure: only those that are prepared will thrive!


  1. It’s great that IoT technology can help in eliminating the unplanned equipment downtime. Downtime can seriously impede business success, it depends on the frequency and duration, it can result in a lot of lost productivity and money.