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Manufacturing Tomorrow

Manufacturing Tomorrow


What’s the Potential Payback of the IoT for Discrete Manufacturers?

Jun 21, 2017
By: Mark Stevens

IoT Payback Manufacturing 

The Internet of Things (IoT) and, more specifically, the Industrial Internet of Things (IIoT), is a hot topic in manufacturing today. It has impressive potential to not only improve efficiencies and boost productivity throughout an organization, but also to help that organization predict its maintenance needs and avoid costly equipment failures. 

Because the investments of time and money required to take advantage of IoT strategies are significant, most discrete manufacturers, while very intrigued by the concept, are acutely interested in understanding the payback these technologies represent. Specific numbers are difficult to pinpoint because every manufacturing facility will use the technologies differently and to differing degrees, but one thing is certain: the potential for payback is undisputed. In a Morgan Stanley report, projections indicate that with just 50 percent penetration, the IoT could save $500 billion due to factory automation; SAP recently put the worldwide IoT opportunity for discrete manufacturing industries at $746 billion by 2018.

Let’s look at a few general areas in which IoT methods can provide payback to a discrete manufacturer:

  • Increased Productivity
    Using IoT to have devices perform tasks ordinarily completed by humans keeps those employees active in more productive work, speeding up the entire production process because the workforce is more fully engaged in the “right” work. You’ll also likely see related improvements in product consistency and accuracy when more and more tasks are automated.

  • Reduced Costs
    IoT can connect devices (gauges, sensors, etc.) and have them “talk” to one another, removing the need for human intervention in all but exceptional cases. The more tasks that can be handled by IoT and devices within the facility, the lower your per-unit costs will be (and the higher your margins/profitability).

  • More Consistent Quality
    Human error is unavoidable and costly, but when you leverage IoT to monitor processes and products—and resolve issues—your overall product and process quality improve, right along with customer satisfaction. 

  • Better Decisions
    IoT devices capture data that can be used to make better decisions. Rather than rely on instinct or guesswork, management can see exactly how every part of the production process is performing: where you regularly have slow-downs, what equipment is failing and why, what shifts are exceeding goals, what equipment needs more maintenance than expected for its age, etc. Analytics tools can be added to the IoT system to make sense of the numbers faster, which means actions—corrective and proactive—can be taken more quickly.

How to Get Started
Starting small is often the best approach for discrete manufacturers; it allows you to see how the IoT  works and “get a win under your belt” before committing to a larger investment. 

Some of the simplest projects involve linking a piece of equipment’s sensors/meters to a dedicated IP network to monitor performance. Analytics tools help evaluate performance and illustrate trends, like low production hours, downtime, etc. Let’s say you’d like to understand why your radial drill press requires frequent maintenance to maintain its expected productivity. In this case, you’d hook up the drill press (and any equipment connected to it) to the IP network and monitor performance over time. The sensors/meters will deliver data that allows you to understand the problem—sometimes immediately, sometimes after a period of monitoring. Maybe the press is being used at too high a PSI, isn’t being lubricated frequently enough, or is being used incorrectly. With this information, you can act to resolve the specific issue quickly and appropriately. 

The future of the IoT and the IIoT are mind-boggling, with one industry insider anticipating that “…the world of production will become more and more networked until everything is interlinked with everything else.” (Siegfried Dais, Bosch). The reason is the enormous value it represents in reducing costs, improving productivity, and improving quality. 

Discrete manufacturers that watch from the sidelines will soon be playing a game of catch-up, struggling to establish a competitive advantage. If you’d like some insights and guidance on how to take that first step into IIoT, talk with one of our manufacturing experts. We can show you some simple, cost-effective ways to start implementing it in your facility—and start reaping the rewards.


Mark Stevens
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