IoT in Manufacturing: What’s Fact, and What’s Fiction?

June 4, 2020 - 7 minutes read

We often hear about how the Internet of Things (IoT) is revolutionizing enormous industries like manufacturing. After years of optimization and the addition of many more sensors and devices, this digital transformation has cemented its place in these industries. Executives can easily keep an eye on all operational processes, and employees are freed up to attend to more important tasks than the monotonous, repetitive ones that occupied their time just a few years ago.

According to a recent study, 94% of the businesses that chose to implement IoT have already seen a return on their investment. If we can implement IoT in all of the businesses that could use it, we could create even stronger connectivity between companies and industries.

But before that can be done, we wanted to take a moment to clear the air. Many manufacturing businesses have misconceptions about how IoT works and if it helps. With these false assumptions, businesses delay implementing IoT, and it can negatively impact their bottom line. In this article, we’ll discuss some of the most common misconceptions and shed some light on why they’re incorrect.

Misconception #1: IoT is not suitable for smaller and medium-sized businesses

This is simply not true. In fact, IoT systems are suitable for enterprises of any size because they can scale when the business grows. IoT systems can also be completely customized and continuously optimized to fit whatever business needs you’d want to be fulfilled.

Many smaller manufacturers think that IoT requires a lot of time, investment, and ongoing effort to run successfully. But new tools have relieved a lot of the initial investment costs. For example, Seattle-headquartered Microsoft offers an open-source software called Azure IoT to help smaller manufacturing businesses launch their IoT systems without needing to buy costly IoT infrastructure or technology. Smaller businesses can also circumvent hiring dedicated engineering or IT teams.

Most of the time, implementing IoT ultimately brings about more benefits than cost or time concerns.

Misconception #2: IoT systems are only about connecting devices and sensors

Sensors and devices are major parts of the IoT system: they generate data, alert the appropriate employees to potential problems, and keep things running smoothly. But that’s just the foundation of an IoT system.

IoT developers have to contend with networks, gateways, APIs, the cloud, edge computing, equipment integration, data pipelines, and so much more. The main goal of IoT is connectivity through the interplay of hardware and software to generate insights in real-time for better decision-making.

Using IoT, manufacturers can predict outcomes, improve system uptime, and prevent failures in equipment and in business operations.

Misconception #3: IoT systems are not secure

As with any connected technology, security concerns are always an ongoing worry. The fact of the matter is that having a multitude of sensors and devices causes a greater risk of security issues.

But having an active security strategy helps manage cybersecurity incident risk. Building security into every level of the IoT system, from the device to the cloud to the devices used to access the data, is a good way to stay on top of system security. Localizing Internet access to an intranet network can also help mitigate much of the risk.

Since its early days, IoT security has improved consistently over time. As industries work together to standardize and regulate security features, we’ll see IoT security continue to strengthen.

After all of the investment and time spent in implementing the perfect IoT system, wouldn’t it be sad to watch it all crumble away from not having an active security plan? Make sure your IoT system is fortified with security measures.

Misconception #4: IoT isn’t necessary

Manufacturing businesses think that IoT is unnecessary, but their competitors are seeing record profits and efficiency because of their IoT systems.

Whether you feel that IoT systems generate more data than you could ever parse through or that IoT systems are too expensive for the benefit they bring, IoT brings to light valuable business insights that improve productivity and operational efficiency.

A report by McKinsey showed that 60% of the IoT market’s $11.1 trillion value in 2025 will depend on data analysis and integration.

Data goes underutilized more often than not. You don’t need an elite team of data scientists to mine your data for insights. But if you’re not analyzing your data effectively or at all, you’ll miss out on information for creating new revenue streams, insights across your supply chain, and how best to optimize your equipment’s life cycle for maximum output.

Ultimately, analyzing data saves businesses effort, time, and equipment costs.

Misconception #5: IoT is too expensive for your business

Being one of the first industries to implement IoT, manufacturing businesses who did not invest earlier will pay the price with a loss of revenue and customers. If an IoT system is too costly to implement, consider how expensive it is to constantly fail to meet revenue goals. As IoT grows, implementation costs decrease.

If you’re still on the fence about implementing IoT in your manufacturing enterprise, ensure you’re also taking into account the benefits that an IoT system could bring to your business, quantifiable or not. Eventually, IoT systems identify expenses that can be reduced as well as potential areas for growth.

Manufacturers Need IoT to Thrive

Manufacturing businesses experience cut-throat competition, with customers looking for the best quality at the best price. Automation and business intelligence through IoT can elevate manufacturers’ insights, efficiency, and profits.

Not only that, but the potential of a business goes through the roof with the implementation of this emerging technology. Is your organization ready for a bigger wave of productivity? Consider implementing or upgrading your IoT system!

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