Smart Manufacturing with Internet of Things

Published by MBA Skool Team, Published on July 17, 2016

The percentage of population living in cities in 2040 will be around 65% in comparison to around 53% in 2016. 1.3 million people are currently moving into cities each week. Tokyo, the largest city in the world has already crossed 36 million mark. The top 600 urban centers generate 60% of global GDP. And cities use 60-80% of world’s annual energy needs. All these facts elucidate the profligate pace we have picked up, and everything from needs to data is increasing at an exponential rate. There is an urgent need to arrange everything in a structure or else the heap would crumble down.


In other words, there is a need of smart everything, starting from cities; which will be driven by low power sensors, wireless networks and their engagement and web and mobile based applications that will result in real time urban informatics. It will (has already started taking) take care of various segments of the human existence- environment, safety, transportation, utilities, buildings and so much more. Internet of things focuses on being able to control things remotely. With full application of internet of things a routine day will be beyond imagination. As soon as you switch off your alarm the geyser switches on and hot water is ready for you. You forgot to switch off some appliance while leaving home but as soon as you realized you took out your phone and switched them off. All this and much more will be possible with the help of everything being connected. From homes to industries, consumers to governments, the networking will allow to access whichever element of the chain precisely.

Image: pixabay

The Internet of Things is defined differently by different organizations but in simple terms it is just a network of a huge number of nodes or elements which interact using Internet Protocol connectivity. The basic requirement thus is a continuous and ubiquitous connectivity. Gradually more and more devices are coming under the network and are able to be controlled in no time. A lot of management and monitoring is required to make it work efficiently and this is brought about by proficient analytics.

Now this internet of things is being extensively used in industry as well and to such a level that without this kind of engagement companies cannot even think of working effectively, although there is still a big percentage of enterprises that have not adopted this ever rising technology due to the fear of heavy investment for at least few years from now. The internet of things helps to provide real time data and allows companies to adjust their production and maintenance accordingly, without affecting the performance. There is a requirement for manufacturers to invest in internet of things because of complex value chains, continuously advancing market, need to create visibility and strengthen brand reputation and ever increasing demanding customers.


Operational techniques and information technology including Internet of things are mandatory for manufacturers to design, manufacture, and deliver their products. Connectivity is omnipresent and one of the most important factor for letting IoT to work. Clouds are made available to enterprises so that they can make their products work, but recently there is a dilemma arising about the payment issues for these cloud services. The Internet of Things doesn’t stop at just cloud connectivity, rules engines, trusted social networks, community social networks, real-time big data analytics, command centers and intelligent mobile apps are part of it.


With the use of IoT, first of all the service facilities can be made whimsical. It allows manufacturers and service channels to improve consumer satisfaction by continuously monitoring the services and keep a check on repair and maintenance. Forecasted analysis helps to maintain customer relationship, retain customers for lifetime by capturing their desired value and keep modifying the product according to the latest advancements. Supply chains have been benefitted a lot by the use of internet of things. With the implementation of mobile devices and sensors, Radio Frequency Identification and Global Positioning System, inventory and assets can be tracked in a better way in the warehouse and on the way. Live demand and supply can be used to estimate the production needs, orders, shipments and inventory position, and accordingly make changes in quantities and inputs required at each stage. Cisco estimates that cities that run on information can improve their energy efficiency by 30% in a time span of 20 years.


Birth of specific technology elements like low cost sensors, reliable and affordable communication, storage capacity and big data and analytics has caused the possibility of internet of things to be applied in manufacturing and the major drivers for the same in this industry are Information technology optimization and modernization, product and service improvement, better supply chain management and logistics, competitive distinction, business process operations optimization and control, better customer service, customer acquisition and retention and lower operational costs.


But with the acceptance of this technology by every company, the competition has to be faced and beaten, so many organizations are adopting micro logistics. It involves replacing the conventional method of regional distribution centers and instead using local warehouses. Hence is provides greater visibility into actual inventory and helps to manage it throughout the complex supply chains including inbound material, production progress, product genealogy, inventory management, outbound finished goods, and demand signals. Not only this, but using local warehouses increases the efficiency of the whole system. In manufacturing, the operational intelligence helps to increase reliability of the system and decisions can be taken without much trouble.


By keeping in mind the exact business objective, be it increasing market share, lowering costs, improving customer service or increasing revenue, the appropriate shop floor and factory judgments can be made and this internet of things has already started making it much easier. The need of the hour for manufacturing industry or for that matter any industry is to invest in IoT without thinking much about the returns, because the returns could be late but will be huge.


This article has been authored by Akanksha Rajput from IIM Raipur

The articles in this section have been submitted by our Authors. They have been reviewed & uploaded by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

If you are interested in writing articles for us, Submit Here

Share this Page on:
Facebook ShareTweetShare on Linkedin