Industrial IoT: Empowering Small & Medium Manufacturers – Part 2

Alain Louchez of Georgia Tech

Small and medium manufacturers (SMMs) remain a vital and dynamic segment of U.S. manufacturing. Part 1 of this series explored smart and digital manufacturing; this continuation focuses on the current state of digital transformation and practical pathways for SMMs to harness Industrial Internet of Things (IIoT) technologies.

Digital Transformation Still in Early Stages Among SMMs

A March 2017 World Economic Forum (WEF) white paper titled “Technology and Innovation for the Future of Production: Accelerating Value Creation” cited a recent study of 4,500 German SMEs that revealed fewer than 20 % had even heard of Industry 4.0, let alone begun implementation. Mary Bunzel and Alain Louchez highlight that this is striking given Industry 4.0 originated in Germany.

The WEF notes that many countries face a challenge in helping small and medium producers unlock these technologies’ value. A 2015 White House press release echoed this sentiment, stating that small manufacturers often lag behind larger peers due to unique barriers. For example, a recent survey found that under 60 % of small manufacturers were experimenting with 3‑D printing, a technology that could dramatically increase flexibility for small firms, whereas over 75 % of large firms were already using it.

Despite these gaps, SMEs stand to gain significant cost savings and new revenue streams by adopting IIoT. Their deep domain expertise and agile organizational structures position them to develop the analytical algorithms essential for edge computing, digital twin creation, and AI—core components of IIoT.

Consider the example of a seasoned boilermaker who, after 30 years in the industry, retired but wanted to share his expertise. Partnering with a former supplier and collaborating with data scientists, he helped embed operational models of steam feeds and hydraulics into an IoT platform, creating subscription-based analytical services for other companies.

In June 2017, MForesight (The Alliance for Manufacturing Foresight) released a report on “Ensuring American Manufacturing Leadership Through Next‑Generation Supply Chains.” It argues that regaining a competitive edge requires a holistic supply‑chain view that maximizes value, and that U.S. suppliers—especially SMEs, which account for 80 % of domestic content—are critical to manufacturing success.

MForesight stresses that both large and small companies must reassess supply‑chain management using proven tools and best practices to fully implement next‑generation supply chains.

What Path Forward Looks Like for SMMs?

For SMMs yet to embrace digital transformation, IIoT offers benefits on two fronts:

1. Directly, advanced manufacturing technologies can streamline operations, boosting productivity and efficiency.
2. Indirectly, integration into a larger supply chain can produce exponential growth: a small supplier that secures a major contract can see revenue rise by 250 % and create 150 % more jobs within two or three years (SBA data). To achieve this, their systems must seamlessly mesh with larger firms’ platforms, demonstrating high automation, integration, and—most importantly—trustworthiness.

Trustworthiness, as defined by the National Institute of Standards and Technology (NIST) in its Framework for Cyber‑Physical Systems (Release 1.0, May 2016, updated June 2017), encompasses cybersecurity, privacy, safety, reliability, and resilience.

While challenges exist, many can be addressed through the Smart Manufacturing Leadership Act, MForesight’s Supply Chain Innovation recommendations, and established programs such as the Manufacturing Extension Partnership (MEP) and Manufacturing USA. Cost‑effective tools—modeling, simulation, emulation, and even gamification—can smooth the transition to an IIoT‑driven production environment.

The authors of this blog are Mary Bunzel, Director of Manufacturing and Industrial, Industrial Sales & Marketing Group at Intel Corporation, and Alain Louchez, Managing Director of the Georgia Tech Centre for the Development and Application of Internet of Things Technologies (CDAIT).

The views expressed in this article are solely the authors’ own and do not necessarily represent those of Intel Corporation, Georgia Tech, CDAIT members, the University System of Georgia, or the State of Georgia.