IoT in Manufacturing – Use-Cases, Benefits and Challenges - PixelCrayons (2023)

While mobile phones have rapidly penetrated most areas of our lives, it is often underestimated how IoT can transform business models.

IoT in Manufacturing – Use-Cases, Benefits and Challenges - PixelCrayons (1)

Manufacturers, who have implemented smart devices and supported software platforms, are already reaping the benefits of a connected environment. Moreover, many of these organizations barely had to make any substantial investment.

Today, in this blog post, I will reveal the significance of IoT in manufacturing, along with the key challenges. So, let’s get started!

Table of Contents

IoT in Manufacturing Industry in Figures

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As per a recent report from Statista, 749 billion U.S. dollars were supposed to be used worldwide by 2020 on the Internet of Things (IoT). Despite a rise from the previous year, the 2021 spending will grow less than initially forecast due to the Covid-19 pandemic.

The forecast for global spending on IoT by 2023 would be 1.1 trillion U.S. dollars, as evaluated in 2021. Region-wise, the Asia Pacific held the most significant share of the IoT market. This was followed by North America, Europe, the Middle East, and Africa.

Also, McKinsey’s Global Institute foretells that IoT will have a financial impact of about $11 trillion by 2025. The increasing need for automation, predictive maintenance, and centralized monitoring leads the IoT in the manufacturing domain.

With problems like sudden outbreaks, conflicts, and disasters, manufacturers are raising their exploration of the Industrial Internet of Things (IIoT). By combining IIoT, they intend to stay competitive and strategize properly for business expansion. Let us learn the significance of IoT in manufacturing and its benefits.

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What Benefits Does IoT Bring in Manufacturing?

IoT app developers are in demand, and the reason is simple- the advantages of IoT. Here are some of the benefits of IoT in manufacturing that you must know-

  • Supply Chain Visibility

IoT enhances supply chain productivity and traces the materials’ movement, finished products, spare parts, etc., throughout the manufacturing process. Manufacturing businesses can keep tabs on production delays in real time and take immediate action to improve service levels.

Besides, it enables manufacturers to manage inventory more efficiently by monitoring their available products, location, and quality.

As a result, manufacturers can-

  1. Enhance business intelligence
  2. Improve customer service levels
  3. Reduce operational expenses
  4. Increase revenue opportunities
  5. Deliver compelling products to the right individuals at the right time
  • Enhanced Product Quality Controls

The IoT technology provides intelligent tracking and tracing of finished products, components, and spare parts throughout the manufacturing facility. Moreover, It prevents defective materials from reaching the assembly line and improves customer service by delivering faster product deliveries.

  • Real-time Insights

Real-time insights from IIoT devices allow manufacturing executives to track the number of finished products. Also, it helps them to maintain an accurate inventory and identify equipment malfunctions promptly. Hence, by reducing product defects, Internet of Things technology ensures a higher quality of manufactured goods.

  • Cost Savings and Increased Profits

There is a growing demand for well-made products at competitive prices that deliver value to end-users. Better production intelligence and tracking of the movement of materials, components, finished goods, and spare parts result in lower operational costs and easier inventory management.

Furthermore, Another benefit of Internet of Things technology is improved margins due to improved operational efficiency and product quality.

  • Asset Security

IoT sensor devices provide an up-to-date view of industrial assets, including condition monitoring reports and predictive maintenance assessments. It ensures safety during manufacturing by preventing malfunctions and protecting equipment life cycles.

  • Higher Customer Satisfaction

Manufacturing businesses use IoT devices and technology to offer a higher degree of customer service. The advanced devices and technology enable round-the-clock availability and faster product delivery to existing or potential customers. This results in increased customer satisfaction levels, repeat business from loyal customers, and more significant revenue opportunities.

Another advantage of IoT in manufacturing is that it enables manufacturers to monitor in real time and improve their energy-efficiency levels. The IoT can connect entire manufacturing sites using wireless sensors that produce data relating to energy usage in real-time, allowing manufacturing businesses to identify high-energy areas quickly.

Also Read:How to Improve Customer Experience for Your Business?

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IoT in Manufacturing Industry: 4 Use-Cases

  • Remote Production Control

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IoT allows monitoring of the production process in real time. And it is not only about the condition of machinery but also factory safety. For instance, using IoT-driven cameras on the roofs of buildings or at the entrances of production halls can help detect different distress signals (smoke, fire, violence, etc.) and warn security services.

Moreover, control rooms can be completely automated with IoT gadgets like smart buttons or video recorders with alarm functionality. The technology notifies managers about suspicious movements like productivity decreases, unauthorized access, etc. It ultimately reduces risks and improves overall productivity metrics.

On top of this, using IoT in production may help monitor employees’ attendance time, shift schedules, and working hours. Also, managers can optimize staff retention rates, boost employee productivity, or eliminate labor costs.

  • Asset Tracking / Condition Monitoring

Asset tracking is another aspect of the manufacturing process that can be improved by integrating IoT technologies. It aims at monitoring the condition of equipment, materials, tools, and other valuable assets to prevent losses.

Tires tracking is a good example here. IoT-powered tires are equipped with sensors that provide real-time data on their potential use time, which may help managers to schedule maintenance operations more efficiently. Besides, it allows identifying applications for optimal tire management.

  • Logistics Management

IoT can reveal supply chain inefficiencies by eliminating blind spots in logistics processes.


Asset tracking can be extended to other non-material assets as well. IoT sensors monitor various parameters, including humidity, temperature, location, and pressure. Businesses can overview the energy consumed or waste produced by each asset. By using IoT in logistics, manufacturers gain comprehensive data for nature conservation purposes and improve efficiency in their delivery processes.

In manufacturing, it helps to cut losses from spoiled products and materials and reduce costs of transportation and response times. IoT-driven logistics data is useful for predicting future problems in the production process(e.g., the lack of electricity during certain seasons).

IoT is especially relevant for today’s manufacturers as it allows them to monitor and control production status remotely without involving the workforce (time tracking, attendance monitoring), which increases productivity/profitability.

  • Predictive Repairing

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It is one of the most promising areas as it implies the usage of IoT-powered technologies that collect data on the condition and position of components. Manufacturers are notified about necessary maintenance operations or replacements as soon as a critical parameter is detected. Using IoT in manufacturing significantly cuts down costs and ensures a higher level of customer satisfaction due to improved product quality.

Challenges of IoT in Manufacturing

Challenge 1- Security

IoT opens a wide range of new attack vectors, which means more vulnerabilities than a hacker can exploit. Security risks may appear at all stages of IoT-driven production: from gathering and processing data to controlling your machinery remotely. A recent study by Ponemon Institute revealed that over 60% of companies using IoT technologies suffer from data security breaches.

Challenge 2- Interoperability

Manufacturers face increasing interoperability issues when integrating their devices with other systems and IT infrastructures due to the lack of standardization across IoT platforms and protocols. The absence of rules on interacting with other devices is a significant obstacle for manufacturers who want to implement IoT into their business processes.

For example, different companies are using other wireless communication protocols (ZigBee, 6LoWPAN, Thread), operating systems (Linux MQTT), and programming languages (ARM assembly or JavaScript). This means that even if you own a set of products that can communicate with each other, you have to spend a lot of effort and money implementing this process into your business.

Challenge 3- Data Privacy

Manufacturers face significant obstacles when collecting data from sensors embedded in their devices. By connecting these gadgets to the Internet, manufacturers also expose them to cyber threats. IoT-based production requires a comprehensive plan for data protection from the project’s onset to ensure compliance with security standards and minimization of privacy risks.

In response to these challenges, manufacturers are gradually increasing their awareness about how they can benefit from IoT technologies in their day-to-day work. Even though a lot is still left before this technology can be considered mature, IoT-based solutions are already being implemented in many industries.

5 Manufacturing Companies Who Have Already Implemented IoT

1. Nike

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Nike’s VP of Digital Sport uses IoT technologies to improve the Nike+ Running experience. He uses smart bracelets and sensors embedded in the shoes to track every step taken by athletes during their training sessions. This data helps Nike create personalized products to suit each customer’s needs better. Moreover, the smart bracelet analyzes each runner’s behavior during their workout and provides feedback through a mobile app.

2. Ford

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Ford successfully implemented IoT by equipping its factories with “smart lights” that adjust their intensity according to natural lighting conditions. This solution helped the company to save 4 million dollars annually in production costs. Moreover, Ford also uses IoT to optimize its business processes across multiple manufacturing facilities.

3. Volkswagen

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Volkswagen has implemented an innovative solution to save 4 million dollars in production costs. The company installed sensors into conveyors used during production, which automatically manage belt tension. Thanks to this solution, Volkswagen managed to cut down the downtime of conveyor belts from 1 hour to just 9 minutes.

4. Tesla

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Tesla uses IoT for loading and unloading cars onto trucks. The company equipped forklifts with sensors that automatically inform employees about any malfunctions or issues that might have occurred while a car was being loaded/unloaded. This solution allowed Tesla to achieve a rate of only 2 seconds of downtime per car.

5. Siemens

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Siemens uses IoT for predictive and preventive maintenance in its wind turbines. The company uses sensors to track each turbine’s operating conditions and behavior and detect possible malfunctions or issues that might occur before they actually do. This solution has helped Siemens improve the reliability of wind turbines by 30%.

Also Read:Top 12 Emerging IoT Technologies


The Internet of Things is an integral part of the future technology landscape, and it has already made its way into every industry imaginable, including manufacturing. However, to successfully implement IoT technologies into your business processes, you need to be aware of the challenges that manufacturers face today. As with any major technological transformation, it takes time for this concept to mature. Therefore, patience is required when investing in IoT. You can even hire IoT development companies in India for better outcomes.

Frequently Asked Questions

1. How is IoT used in Manufacturing?

IoT is used in Manufacturing for various purposes, such as machine automation, capacity planning, and predictive maintenance. It allows manufacturers to observe and understand machine data, configure them automatically based on collected data, predict necessary maintenance activities ahead of time, and schedule them accordingly.

2. Where is IoT used in Manufacturing?

The widespread use of IoT in Manufacturing can be seen across various industries such as aerospace, food and beverages, automotive, and metals.

3. What companies use IoT in Manufacturing?

IoT is used by companies, both big and small, for several reasons. Some of the most notable companies that have adopted this technology include Nike, Ford, Volkswagenartsila, Siemens, and Tesla.

4. What are the benefits of IoT in Manufacturing?

IoT technologies allow manufacturers to improve productivity by automating processes, optimizing capacity planning, and implementing predictive maintenance activities.

5. Why is IoT needed in Manufacturing?

Several reasons drive the need for IoT in Manufacturing:

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  • The industry faces a shortage of skilled workers, sending costs soaring and leading to drops in production numbers.
  • Competition from emerging markets such as China has caused pressure on high-cost manufacturers to cut costs and find ways to automate processes.
  • There is a need to enhance the customer experience.

6. What is the difference between machine learning and IoT in Manufacturing?

Machine learning is a subset of artificial intelligence that teaches systems to learn and work on data and information without being explicitly programmed. Moreover, IoT in Manufacturing is a more advanced version of machine learning as it facilitates the connection of physical objects that collect and exchange data with other devices.

7. What are examples of Internet of Things applications in Manufacturing?

IoT enables manufacturers to enhance their capabilities by implementing any of the following applications –

  • Predictive Maintenance: This allows manufacturers to predict problems and failures before they happen to avoid untimely disruptions.
  • Productivity Optimization: IoT enhances a manufacturer’s productivity by allowing them to monitor machine performance data, configure machines automatically based on collected data, collect relevant data from sensors that are then processed by production analytics software, and configure machines remotely through cloud technology.
  • Capacity Planning: IoT in Manufacturing is used for capacity planning to determine future customers’ needs effectively.
  • Product Tracking: This allows manufacturers to track all their products throughout their lifecycle
  • Supply Chain Management: IoT technologies gather data from various sensors collected at the production source. As a result, this information is then transmitted to management software for further processing, which helps manufacturers carry out necessary actions proactively

8. How does the Internet of things affects the manufacturing industry?

IoT uses new technologies such as sensors, machine learning, and wireless. These technologies help manufacturers to create various products and improve their production processes by measuring the speed they take to produce them.


What are the benefits of IoT in manufacturing? ›

Real-time production visibility: Adopting IoT provides manufacturers with real-time production tracking and holistic visibility into shop floor processes. Connecting with and drawing data from machines on the shop floor gives supervisors and managers an idea of what's going on across the factory floor.

What are the issues faced during IoT device manufacturing? ›

Lack of Standards. The lack of standards in IoT, especially for hardware, is a major challenge for implementation. Many embedded developers and designers have idiosyncratic ways of doing things, making the hardware industry highly fragmented.

What is IoT explain the challenges and problems that IoT is currently facing? ›

IOT has been facing many areas like Information Technology, Healthcare, Data Analytics and Agriculture. The main focus is on protecting privacy as it is the primary reason for other challenges including government participation.

How is IoT being used in manufacturing? ›

IoT makes it possible for manufacturers to reduce operational costs and create new sources of revenue by: Optimizing asset management and inventory management, Reducing machine downtime and. Enabling more agile operations and more efficient energy use.

What are the benefits of smart manufacturing? ›

12 Benefits of Smart Manufacturing
  • Improved data insights. ...
  • Maximized plant efficiency. ...
  • Faster issue resolution. ...
  • Tracking products across value chain. ...
  • Seamless data exchange. ...
  • Better safety and quality control. ...
  • Continual production improvement. ...
  • Ensure on-time delivery.

What are the benefits of working in manufacturing? ›

Between the high demand, skills needed, and nature of the job, working in the manufacturing industry comes with rewards: an average salary between $37,000 and $63,000, health insurance (including dental and vision), retirement funds, paid time off, career development and educational opportunities, and more.

What are the 5 challenges of IoT? ›

  • Challenges in IoT. Defining the path to market depends on many factors, including the company's maturity, available capital and the product's readiness and positioning. ...
  • Product. A successful IoT project is more than just a technical solution. ...
  • Hardware. ...
  • Software. ...
  • Deployment. ...
  • Maintenance.
Aug 18, 2022

What are the 3 challenges of IoT? ›

Common challenges in IoT Development
  • Security. In our opinion, security is the most crucial issue that needs to be addressed for IoT. ...
  • Costs. ...
  • Reliability and Hardware. ...
  • Ease of Integration. ...
  • Connectivity. ...
  • Development Skillset. ...
  • Quality Control. ...
  • Design.
Jul 15, 2022

Which kind of challenges need to overcome in IoT? ›

Top Five IoT NPD Challenges
  • Range Challenges. Depending on the distances across which your IoT innovation is intended to function, you'll need different technologies for solving your range challenges. ...
  • SWAPc Challenges. ...
  • Maintenance Challenges. ...
  • Security Challenges. ...
  • Supply Chain Challenges.
Dec 15, 2021

What are 3 examples of technology used in manufacturing areas? ›

Today, new tools and solutions help factories meet greater demand at a lower cost. Some examples of manufacturing technology advancements include 3–D printing, robotics and big data.

How is IoT used in manufacturing to make the process more efficient and effective? ›

IoT sensors allow manufacturers to maintain more diversity in production and inventory and to track it using real-time data. Such enhancements can be used not only with customized products but also with standard ones, providing a more consistent service that leads to greater customer trust and loyalty.

What are the advantages and disadvantages of smart manufacturing? ›

The more fundamental and holistic the planned changes in operations are, the longer and more cost-intensive the transformation process will be. But selective solutions are often discouraged - at least in the long term. Another disadvantage of a smart factory is that human conflicts can arise during the change process.

How is SMART technology used in manufacturing? ›

smart manufacturing (SM) Smart manufacturing (SM) is a technology-driven approach that utilizes Internet-connected machinery to monitor the production process. The goal of SM is to identify opportunities for automating operations and use data analytics to improve manufacturing performance.

What are the four main characteristics of smart manufacturing? ›

Characteristics of Smart Manufacturing
  • Connectivity, data and computational power. This includes IoT, Cloud Monitoring with MES or ERSP tools, and Blockchain.
  • Analytics and intelligence. ...
  • Genuine human-machine interaction. ...
  • Advanced engineering.

What are the key benefits of a strong manufacturing sector? ›

Manufacturing industries are important because they allow people to create and build things that are useful to society. Without manufacturing, many people would be unable to get the products and services they need. Manufacturing also helps create jobs, allowing people to earn money and support their families.

What is the importance of manufacturing in 5 points? ›

Importance of Manufacturing

(i) Manufacturing industries helps in modernising agriculture. (ii) It reduce the heavy dependence of people on agriculture income by providing them jobs. (iii) Helps in eradication of unemployment & poverty. (iv) Helps in bringing down regional disparities.

What are the main importance of manufacturing? ›

Manufacturing industries not only help in modernising agriculture, they also reduce the heavy dependence of people on agricultural income by providing them jobs in secondary and tertiary sectors. Industrial development is a precondition for eradication of unemployment and poverty from our country.

What are the biggest challenges to manufacturing? ›

Manufacturers need to reinvent themselves so they can sustain their businesses in the future.
  • Decreasing margins. ...
  • Keeping talent. ...
  • Increasing competition. ...
  • Aging workforce. ...
  • Lack of innovation, R&D. ...
  • Managing big data. ...
  • Employee wellness. ...
  • Rising costs of labor, materials, energy, and healthcare benefits.
Sep 8, 2022

What is the challenge in manufacturing production? ›

Inventory management remains one of the most critical challenges faced by the manufacturing industry, but it has become much easier with the help of automated solutions. Nonetheless, many manufacturers, tiny ones, continue to handle their inventories manually.

What are the main problems in manufacturing? ›

4 common problems in the manufacturing industry
  • The manufacturing skills gap. One of the biggest manufacturing challenges U.S. businesses face is the growing skills gap. ...
  • Inventory and supply chain management. ...
  • The Internet of Things (IoT) ...
  • Incorporating robotics and automation.

What are advantages and disadvantages of IoT? ›

Advantages are use in traffic systems, save time, enhanced data collection, improved security, improved security etc. disadvantages are security issues, privacy concerns, increased unemployment, the complexity of the system, high chances of the entire system getting corrupted etc.

What are four 4 issues might affect the development and implementation of the IoT? ›

Challenges facing network implementation in IoT

The enormous growth in number of connected devices. Availability of networks coverage. Security. Power consumption.

What are the challenges disadvantages of IoT? ›

What are the disadvantages of IoT in business?
  • Security and privacy. Keeping the data gathered and transmitted by IoT devices safe is challenging, as they evolve and expand in use. ...
  • Technical complexity. ...
  • Connectivity and power dependence. ...
  • Integration. ...
  • Higher costs (time and money)
Mar 29, 2022

What is the is the most difficult challenge for IoT security? ›

Weak and default passwords often top the list of IoT security challenges. Hackers use preset passwords and brute force to crack the passwords and gain access to the IoT device, and thereby to all the devices on the entire network.

What are the 6 different types of manufacturing processes? ›

Six types of manufacturing processes
  • Job shop manufacturing. ...
  • Repetitive manufacturing. ...
  • Discrete manufacturing. ...
  • Batch process manufacturing. ...
  • Continuous process manufacturing. ...
  • 3D printing. ...
  • Machining. ...
  • Joining.
Mar 1, 2021

What is the positive impact of technology on manufacturing? ›

Reduce costs: Technology can operate with better efficiency, less waste, and fewer workers, creating long-term cost savings. Decrease production time: Manufacturing technology expedites the production process, so more batches can be made more quickly.

Which growing IoT is used to enhance manufacturing? ›

Predictive maintenance — another IoT trend in manufacturing. By using the data from smart sensors, manufacturers can forecast when machines need predictive maintenance. Augmented reality (AR) — AR is used in manufacturing to provide operators with instructions and information about products and processes.

What are the three key benefits of IoT? ›

IoT in the World Around Us

Monitoring of tank levels in industrial and agricultural applications. Automating processes in industrial operations for safety, efficiency and cost savings. Detection of gas leaks in oil and gas operations. Tracking the location of goods in transit.

Which growing application of IoT is used to enhance manufacturing processes? ›

The industrial internet of things (IIoT) is the use of smart sensors and actuators to enhance manufacturing and industrial processes.

What challenges do you think manufacturers of IoT devices face with the development of new devices and upgrading existing devices? ›

Software and firmware vulnerabilities

Lack of computational capacity for efficient built-in security. Poor access control in IoT systems. Limited budget for properly testing and improving firmware security. Lack of regular patches and updates due to limited budgets and technical limitations of IoT devices.

What are the 2 key challenges in implementing IIOT in manufacturing applications? ›

High-Investment and Ownership Cost

However, not only development but support should be considered along with high skill resources who are expert in IoT. So, the overall cost of industrial IoT application implementation is very high.

What are the challenges and major concerns when it comes to having IoT ready devices? ›

IoT devices often have limited power and processing resources, making appropriate data encryption difficult. As a result, these devices may not always be designed to meet regulatory requirements for protecting the data that they collect.

What are the challenges faced by manufacturing and processing industries? ›

Inventory Management

Inventory management remains one of the most critical challenges faced by the manufacturing industry, but it has become much easier with the help of automated solutions. Nonetheless, many manufacturers, tiny ones, continue to handle their inventories manually.

How IoT is impacting the manufacturing industry? ›

The IoT offers manufacturers a new level of visibility, insights and control. This technology has the potential to revolutionize the manufacturing industry by optimizing production processes, reducing downtime, improving workplace safety and enabling predictive maintenance.


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