How IoT is Driving the Next Generation of Manufacturing

Remote monitoring, asset tracking, and condition‑based maintenance are the leading IoT use cases in modern manufacturing.

Verizon’s 2017 State of the Market: Internet of Things report offers a comprehensive view of how enterprises are adopting IoT and the market forces driving that adoption. The report heralds 2017 as the year IoT moves into the enterprise‑grade arena, detailing digital transformation across verticals such as healthcare, energy, transportation, and smart cities.

Manufacturing emerged as the standout vertical, with an 84% year‑over‑year jump in IoT network connections—more than twice the 41% growth seen in the energy and utilities sector.

Verizon projects that by year‑end 2017, global manufacturers will commit approximately $183 billion to digital transformation via IoT—a figure that eclipses the $85 billion invested by the transportation sector and nearly triples the $66 billion flowing into utilities.

Manufacturers are drawn to IoT because every efficiency gain translates into higher output at lower cost, thereby expanding profit margins. As Verizon notes, “In manufacturing, sensor data keeps equipment running and enables predictive maintenance, reducing downtime, cutting costs, and sustaining production flow.”

Condition‑based maintenance is one of three core IoT applications Verizon highlights—alongside remote monitoring and asset tracking. Whether it’s an automotive assembly line or a food‑processing plant, success hinges on equipment that remains in peak condition. Connected sensors deliver near‑real‑time insights into critical health metrics; data analytics can flag potential issues before they cause downtime, allowing remote interventions or on‑site fixes to prevent costly outages.

With sufficient investment, diagnostics, repair, and inspection can be largely automated. Beyond maximizing uptime and productivity, this automation reduces the administrative burden of manual record‑keeping, freeing time and resources for higher‑value tasks.

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Asset tracking is another critical use case that enhances supply‑chain visibility. In a factory setting, understanding the inbound and outbound flow of materials and finished products is essential for accurate output forecasting and reliable customer delivery schedules.

Verizon cites pharmaceutical manufacturers as a prime example. In the United States, the Drug Supply Chain Security Act mandates that every shipment be labeled with a unique identifier, serial number, lot number, and expiration date, and that detailed records of sales and movements be stored. These stringent requirements help curb the sale of counterfeit drugs—a cost the industry estimates between $75 billion and $200 billion annually.

As Verizon illustrates, consider a global pharma company shipping a $100 million order to a regional distribution center. Sensors in the containers continuously monitor location, temperature, and geo‑fencing parameters. If a major incident forces the driver onto an alternate route, the system immediately alerts the manufacturer, enabling the dispatcher to confirm the situation and pinpoint the shipment via GPS. This near‑real‑time data allows the company to adjust delivery expectations, preserving customer relationships and protecting brand reputation by tracking location and temperature throughout transit.

Sandvik Cormorant, a Swedish manufacturer of metal‑cutting tools, partnered with Microsoft to deploy Azure IoT and related services. By equipping production machinery with sensors that capture performance metrics, Sandvik feeds data into Azure for real‑time machine‑learning analysis. The platform’s predictive analytics inform maintenance schedules and trigger alarms before failures occur, optimizing workflow and reducing unplanned downtime.

Chief Architect Nevzat Ertan noted, “Digital transformation with Microsoft has empowered us to make quicker, data‑driven decisions and enhance profitability. Our new predictive‑analytics solution integrates shop‑floor control data—machine and tool metrics—into Azure for real‑time optimization and predictive maintenance, allowing us to preemptively shut down equipment before a failure.”

Given the clear return on investment and its global economic significance, the manufacturing sector’s embrace of IoT is unsurprising. Mike James, former chairman of the Manufacturing Enterprise Solutions Association (MESA) International Board, wrote, “Factories of the future will be 30 % more productive…Today’s manufacturers must invest in small‑data algorithms. Visionary statements are inspiring, but today’s actions, decisions, and resource commitments—both financial and human—drive tangible progress.”