How IoT is Transforming Manufacturing Industry: Use Cases and Applications

Digitization in manufacturing landscape is led by innovative technologies such as internet of things (IoT) that is implementing operational intelligence, improving asset managements, and driving higher margins as well as improving customer satisfaction levels.


Looking deeper into its benefits, the internet of things provides various promising applications not only in operation but as well as talent & people management, and supply chain.

State of IoT in Manufacturing

Internet of things (IoT) and connected devices is driving the paradigm shift in manufacturing, helping the industry embrace digitization and automation to adopt, innovate, become resilient, and sustainable.


As one of the driving forces in manufacturing digital transformation, Industrial IoT (IIoT) value is expected to reach $232B by 2023, according to Zion Research.  The technology will mainly focus on data gathering, employee safety, and operational efficiency. IoT adoption is influencing production enterprises, creating smart factories, and transforming business and operational processes.

The implementation of IIoT is one of the key goals of numerous enterprises according to a PwC survey.

Industrial IoT

What is Industrial Internet of Things (IIoT)?

Industrial IoT is a system of interconnected industrial assets including machinery, equipment, vehicles, warehouses, inventory, and shop floors with built-in sensors and embedded software for data collection and exchange. These assets are controlled via a single platform to collect real-time information and extract valuable insights.

Application is common in supply and production areas as the technology empowers various devices essential to manufacturing – smart meter systems, sensors, cameras, industrial robots, and distribution control solutions.

Primary Use Cases and Applications of IoT in Manufacturing

Manufacturing KPI

KPIs or Key Performance Indicators aid manufacturers measure business performance and defining metrics important to focus on. KPIs include overall equipment efficiency (OEE) measured by calculating the factory’s performance, availability and quality which can be collected and integrated into the KPI dashboard using data from IoT.


Dashboards, analytics, and reports help business focus their priorities on operations that will make the most impact on their targets. IoT platforms aid in compiling and contextualizing these data.

Digital Factories

IIoT establishes connections between the factory, equipment manufacturers, employees involved in production and design development, and supply chain managers. This seamless connectivity enables cheaper maintenance and faster management.


Plant managers can effectively track employee performance, monitor equipment efficiency, and gather feedback from end users. Creating an environment where crucial data is shared easily in real-time.

Logistics Management

An essential part of manufacturing is its logistics – both acquiring raw materials and moving finished goods and products to customers. Manufacturing companies have high risk in logistics due to a number of uncontrollable conditions, the likelihood of fraud, and the large assets to manage.

Digital Twins

Digital Twins create a robust digital versions of the manufacturing plant or factory along with its machines, parts, processes, and environment. Through IoT, AI, and extended reality, enterprises can simulate processes to discover potential issues, and experiment with operational changes until the desired result is achieved without damaging the physical assets and disrupting the existing operation. Through IoT and Digital twins, factories and plants can have an in-depth analysis of their operation and potential next steps.

Benefits of IIoT

Improved Decision Making

Asset optimization and resource management require comprehensive data and information and with IoT-based sensors data flows seamlessly into reporting dashboards and shows accurate metrics. IoT technology facilitates real-time flow of information, making sure managers are equipped with accurate insights and are on top of their system’s performance.  Armed with information and performance status, managers are in the best position to make informed decisions.

Cost Efficiency

Manufacturing firms’ significant expenses come from losses from downtime, materials, and energy. With IoT, process automation results in considerable operational cost reduction. In tandem with predictive maintenance and asset management optimization, IoT eliminates common issues and saves resources.

Improved Safety

IoT sensors are an effective way to monitor working conditions, having these sensor-based devices detect potential harm helps factories maintain a safer working environment for their employees and allow the immediate intervention of possible causes of accidents.

Increased Quality Control

IoT is capable of helping factories maintain product quality which has a major impact on the company’s bottom line, customer satisfaction, and company reputation. The technology can pinpoint faulty equipment, identify changes in the environment, reduce productivity, and transportation issues so site managers can rectify the issues and avoid the significant quality effects.

Higher Customer Satisfaction

Connected devices minimize if not eliminate human error and prevent the distribution of defective goods. With quality as a decisive factor for many customers, it’s imperative manufacturing companies protect the quality of their products and maintain customer trust and loyalty. With IIoT, predictive maintenance tools, quality control, and satisfaction evaluations are collected and reported helping management plan, build, innovate, and design to meet customer needs.

Enable IoT Solution for Your Manufacturing Business

AI Consulting Group can help manufacturing enterprises who wish to adopt IoT-enabled solutions for their business. Speak to our management consultant to explore the best use cases to help your organization solve your most pressing challenges and achieve quick wins.

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