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Applications And Benefits Of Internet Of Things In Manufacturing

Applications And Benefits Of Internet Of Things In Manufacturing

The Internet of Things technology is one of the most revolutionary advancements in the past few decades. The IoT market keeps growing steadily every year as the world goes through a digital transformation. IoT technologies facilitate the use of small embedded sensors that gather operational data on the factory floor and send it to an artificial intelligence solution that finds better ways to optimize production.

The technology allows manufacturers to gain an advantage over their competitors and grow their businesses on the best practices. Let's see why IoT is so important for the future of manufacturing.

What is IoT in Manufacturing?

Industrial Internet of Things or IIoT technology is a special type of tech that uses data to improve efficiency and productivity in manufacturing. The concept uses embedded sensors and interconnected devices to increase overall performance and streamline manufacturing processes. IoT in manufacturing includes using other advanced tools such as machine learning and artificial intelligence. Together, these technologies can improve manufacturing, giving companies a competitive edge in the market. 

Moreover, this new AI-powered system is not only capable of optimizing production. It helps reduce operating costs, increase customer satisfaction, and help improve product design. The technology leads to all kinds of short-term and long-term business benefits we'll get to in a minute.

Impact of IoT in Manufacturing

IoT technologies are becoming more and more popular because they improve business operations on multiple levels. Here are some of the primary categories impacted by IoT technologies.

Increased Revenues

The manufacturing industry is undergoing the so-called fourth industrial revolution. As manufacturing practices move from traditional methods to a digital environment, IoT technologies play the main role in the process. As a result, manufacturers who adopt these new technologies reported a significant increase in revenue. 

AI-powered IoT solutions improve production, allowing manufacturers to increase product quality and reduce time-to-market. Better product quality and manufacturing practices lead to more sales, which improves revenues. IoT sensors allow manufacturers to monitor production in real-time and generate detailed reports to improve decision-making. Manufacturers can use the information to improve offers based on the customer's expectations and generate more revenues for the company.


IoT in manufacturing focuses on connecting all assets and individual machines into one system. The goal is to create an easily-manageable system that provides real-time performance monitoring across the entire production plant. In short, IoT technologies bridge the gap between different assets, tracking their performance and finding new ways to improve efficiency. 

All devices connected to the system generate performance data that allows the AI to learn how every asset works. Instantaneous monitoring is a massive advancement compared to traditional techniques because it empowers managers to access real-time operational data, monitor machine performance, and make better decisions.

Supply Chain Optimization

Supply chain management is a challenge even for the leading expert. Keeping track of the inventory, the delivery of raw materials, and thousands of customer orders at once is difficult, to say the least. Moreover, poor supply chain management can harm the overall operation by increasing downtimes and product shortages. 

Once IoT is applied to the system, it allows real-time monitoring, improves security, and provides essential information about the entire supply chain. The manufacturing sector can use that information to track every product and find ways to improve the supply. The goal of introducing IoT technologies in supply chain management is to make the process easier and help manufacturers find a cost-efficient way to optimize distribution. That is usually done by introducing automation to the mix.

Applications of IoT in Manufacturing

Now that you have a better idea of how IoT impacts manufacturing let's take a closer look at the primary applications of this technology. Here are some areas where IoT makes the most difference in manufacturing practices.

Quality Control

Traditional quality control efforts are inaccurate and prone to human error. Even the best quality control expert might miss a product defect which can lead to unhappy customers. However, IoT technology helps ensure that all products are tested in various stages of production.

Installing thermal and video sensors on the production line helps ensure that every unit is made perfectly according to the specifications. It can quickly identify product misalignment, defects, and other inaccuracies. Manufacturers using this technology don't have to worry about quality problems anymore, and the best thing is that they can change the data parameters allowing the system to perform quality control on new product lines. 

Inventory Management

When coupled with other advanced technologies such as radio frequency indication or RFID, IoT can bring inventory management to a whole new level. Every item in the system is labeled with an RFID tag and a unique identification number. Once the system scans all times, the data is sent to the AI that tracks every item in real-time.

That allows manufacturers to monitor every warehouse, truck, and other element throughout the entire supply chain. The same technique can also be applied to raw material order calculation for the following manufacturing cycle. The system sends automatic alerts if a critical item is missing, allowing managers to order a new batch of materials. IoT technology improves visibility across the entire supply chain, helps optimize costs, allowing manufacturers to prepare for any situation.

Predictive Maintenance

Predictive maintenance is one of the biggest changes digital technologies brought to manufacturing. Traditionally, manufacturers organized regular maintenance to ensure that all machinery kept working as it should. That had to be done even if the machines were in working order. Factory scale maintenance came with long downtimes and high costs.

IoT technologies are changing these inefficient practices by using real-world operational data to predict the exact time and date when a machine will break down. As a result, manufacturers can use the data to schedule maintenance only when needed, reducing downtimes and overall costs. Moreover, you won't need an inventory of spare parts anymore since the system will tell you exactly which parts are about to break down.


When IoT technology combines with big data analytics, it can provide some incredible insights into everything that goes on the factory floor. By tracking KPIs such as machinery damage, hazards, vehicle mishaps, and other areas, the AI can find solutions to improve the safety of workers and reduce injuries. Safety is another area where IoT in manufacturing makes a big difference.

Moreover, employees can wear IoT sensors that track their health metrics when working in extreme conditions. The sensors can track everything from body temperature, heart rate, fatigue, stress, and so on. Once the information makes it to the analytics stage, the data can help improve compliance and reduce insurance costs. Lastly, IoT can also help identify potential security concerns and introduce new policies to enhance overall safety.

Digital Twins

Digital Twin technology is redefining manufacturing as we know it. The concept is pretty simple, but the insights it generates are impossible to get in any other way. In short, this technology uses real-time data provided by the IoT sensors to recreate an entire product, service, or manufacturing line in a digital environment.

Engineers can then run advanced simulations in many different settings to see how machines will perform in the future. That way, they can simulate the entire lifespan of a machine, part, device, product, etc. DT also allows manufacturers to test product designs in extreme conditions to ensure that the product will perform as expected.


The number of applications of IoT in manufacturing is growing as engineers gather more data on product design, production, supply chain management, and many other internal and external processes. The technology is quickly finding its way into most industries and business practices, and it's showing significant improvements on all levels.

It's still in its early stages, but digitalization is, without a doubt, the way of the future. Companies that adopted AI-powered tools and IoT technologies got a competitive edge in the markets and increased customer satisfaction.