Five reasons why manufacturers are embracing the IoT

The Internet of Things (IoT) can help manufacturers in several ways by reducing costs and downtime as well as provide through operational savings and providing revenue systems.

By Doug Drinkwater March 30, 2016

The Internet of Things (IoT) is enabling manufacturers to be more efficient, productive, and profitable in the face of increased competition worldwide. There are five major reasons why manufacturers are betting big on these new technologies. 


Productivity is arguably the main driver of IoT in manufacturing, as companies recognize that the sensors and collected data enable them to be more efficient, minimize loss and waste, and make their workers’ more effective.

Trumpf is one of the manufacturers to have taken the plunge with IoT, harnessing C-Labs’ IoT software to connect equipment on the manufacturing floor at multiple locations with enterprise applications and systems running on corporate IT networks.

Ultimately, manufacturers are convinced IoT can reduce downtime, boost savings, and produce more goods, more accurately and with less waste.

New revenue streams

The IoT offers manufacturers the chance to drive bigger revenues, not only by being more efficient and saving costs, but also by making intelligent and expensive products.

Konecranes is a good example of this. The Finnish firm has been selling intelligent cranes and reinventing itself as a services company. These "intelligent" cranes are more expensive, but have more features too. They’re able to let the operator know (via sensors) their last known condition, how often they’re used, if they’re overused, improperly used, and when they are likely to break down. 

Operational savings

The one thing that is going to get your C-level executives on board with any IoT strategy is the ability to save or make money, and this is certainly the case with manufacturing.

Through the use of sensors on the manufacturing floor, on-site managers can reduce downtime through predictive maintenance, there’s less waste (you make exactly what you need), and staff are working on the things you want them to work on. 

Reduced downtime

Predictive maintenance is knowing when machinery is going to break down and fixing it before it does. And this is already a huge boost on reducing downtime, ensuring that operations are smooth and that repairs are done before equipment goes wrong. 

Keeping up with the competition

European manufacturers face a battle against their "low-cost" Asian competitors, but with IoT helping on all of the above matters, the war can still be won through leaner and meaner operations.

The German government has recognized this, and through Industrie 4.0 is trying to help German industrial manufacturing—the backbone of Europe’s largest economy—to keep its competitive edge against labor-cost advantages of developing countries and a resurgence in U.S. manufacturing.

During the next five to 10 years, Industrie 4.0 is expected to boost productivity across all German manufacturing sectors from €90 billion to €150 billion. Productivity improvements on conversion costs will range from 15 to 25%. When the materials costs are factored in, productivity gains of 5 to 8% will be achieved. Cost benefits like these can only help European manufacturers compete with global competitors.

Doug Drinkwater is editor at Internet of Business which is hosting the Internet of Manufacturing Conference November 1-2, 2016, in Chicago. This article originally appeared here. Internet of Business is a CFE Media content partner. Edited by Joy Chang, CFE Media,

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