Manufacturers are increasingly leveraging the Internet of Things (IoT), which entails the interconnection of unique devices within an existing Internet infrastructure, to achieve a variety of goals including cost reduction, increased efficiency, improved safety, meeting compliance requirements, and product innovation. IoT’s existence is primarily due to three factors: widely available Internet access, smaller sensors, and cloud computing.

Roughly 63% of manufacturers believe that applying IoT to products will increase profitability over the next five years and are set to invest $267 billion in IoT by 2020. They understand that IoT empowers them to make informed strategic decisions by providing crucial, real-time information. Nearly a third (31%) of production processes and equipment and non-production processes and equipment (30%) already incorporate smart device/ embedded intelligence according to The MPI Group. Similar percentages of manufacturers have a company strategy implemented or in place to apply IoT technologies to their processes (34%) or to embed IoT technologies into products (32%).

A breakdown in critical equipment is costly to manufacturers both in terms of repairs as well as downtime and loss of productivity. According to Information Technology Intelligence Consulting, 98% of organizations say a single hour of downtime costs over $100,000. Ensuring that all equipment is functioning optimally therefore remains a key priority for manufacturers, many of whom are turning to predictive maintenance technology to do so.

Widespread adoption of predictive maintenance technologies could reduce companies’ maintenance costs by 20%, reduce unplanned outages by 50% and extend machinery life by years according to management consulting firm McKinsey & Company.

Predictive maintenance programs monitor equipment using any number of performance metrics. By automating the data collection process through the use of IoT technology, manufacturers can develop a better understanding of how systems work and when they will fail. The ability to predict when maintenance should be performed saves manufacturers valuable time, money, and resources.

Many manufacturers who traditionally had a B2B business model are shifting to a B2B2C (business-to-business-to-consumer) model due to the many benefits selling directly to consumers provides including:

• Increased Profit: You get the full manufacturer’s suggested retail price (MSRP) rather than wholesale prices for your products.

• Faster Time to Market: You can prototype, test, and get products to market quickly instead of contending with the lengthy traditional retail sales cycle that requires locked-down product development far ahead of order and delivery. This agility gives you a competitive edge.
  

• Brand Control: You own your brand. It won’t be diluted or misrepresented by third parties.

• Price Control: You can reinforce your MSRP.

• Better Customer Data: Selling direct to customers allows you to collect data about them that ultimately results in better products, stronger relationships, and increased sales.

To effectively sell direct to consumers you’ll need to select a platform for your e-commerce operations that supports both your B2B and B2C sales platforms. It will have to deliver on order fulfillment and tracking, secure payments, customer service management, and sales and marketing activity tracking while providing a 360° view of all your B2B and B2C
customer interactions.

Remaining competitive means delivering more value to your customers than your competitors. While pricing is extremely important, savvy manufacturers will continue to distance themselves from price wars by leveraging new technology that simplifies supply chain management, which in turn delivers many competitive benefits. These benefits include being able to operate your business more efficiently, more visibility and control over inventory, reduction of operational costs, and improved customer satisfaction and retention.

Today’s supply chain technology solutions address manufacturing needs in a variety of areas, including:

• Manufacturing Optimization
  

• Logistics Optimization
  

• Sales and Operations Planning
  

• Product Lifecycle Management
  

• Business Intelligence
  

• Network and Inventory Optimization
  

• RFID
  

• Procurement

A third of over 2,000 industrial companies have digitized their supply chains while nearly three-quarters expect to by 2020, according to PwC.

Small to medium sized manufacturing companies are increasingly recognizing that an enterprise resource planning (ERP) system is key to creating a lean and competitive advantage.

ERP systems offer two key benefits:

• They streamline processes by automating all business operations and providing accurate, real-time information.

• By providing accurate, real-time information, administrative and operational costs are reduced. The end result is that manufacturers can proactively manage operations, prevent disruptions and delays, break up information roadblocks and help users make quicker decisions.

The lengthy implementation of traditional ERP systems can be frustrating for manufacturers. Now, however, you have the option choose a rapid implementation ERP system, which can be up and running much faster and more affordably than traditional ERP systems.

IoT is transforming almost every surface into a sensor for data collection and providing real-time insights for manufacturers. This ability to collect data from so many sources combined with increasingly powerful cloud computing is finally making big data usable. Manufacturers can slice and dice data in ways that provide them with a comprehensive understanding of their business. This enables them to improve production, optimize operations, and address issues before problems arise.

Assistive technologies, such as augmented reality (AR) and virtual reality (VR), will continue to create mutually beneficial partnerships between man and machine that positively impact manufacturers.

Due to VR software interfacing seamlessly with computer-aided designs, product developers can use VR to quickly make modifications and additions to products during the product design stage before they go into modeling and manufacturing processes. AR and VR can also decrease inspection time and assist in detecting errors in addition to improving workers’ sight line, which enables them to complete tasks faster.

For example, by using AR devices such as electronic glasses or goggles, computer-generated graphics can be placed in a worker’s field of vision that provide him with real-time help when it comes to performing a task. AR technology can also be used with cameras and sensors for training. Workers can be shown how to perform a task and use the data feed to correct mistakes, which makes it possible to quickly and effectively train unskilled workers for high-value work.

Manufacturers will benefit from faster, less expensive production as a result of 3D printing. It makes rapid prototyping, which is a highly cost-effective way for product designers to test and troubleshoot their products, possible. In addition, it enables manufacturers to produce items on demand instead of having to manufacture and warehouse them.

The expensive and time-consuming process of tooling for manufacturers is already being transformed by 3D printing. Historically the production of molds, jigs and fixtures used in the mass production of heavy equipment took months, was very expensive and typically involved utilizing tooling companies headquartered overseas. 3D printing makes it possible for tooling to be cost effectively completed on-site, in days, and has already been embraced by the automotive and aerospace manufacturing industries.

Reshoring – bringing operations back to United States shores – is becoming increasingly common among manufacturers. There are multiple factors contributing to reshoring. Firstly, the economies in many go-to offshoring countries are doing well, which has led to an increase in wages for their residents. Secondly, in countries where labor remains inexpensive, the infrastructures typically can’t support complex manufacturing operations. In addition, transportation costs are rising. The increased use of new software programs that help manufacturers utilize robotics to automate many of the processes that used to require a human, are also contributing to a resurgence in reshoring.

As manufacturers increasingly rely on technology, their need to hire tech-savvy employees is increasing. The challenge is that there are not enough skilled employees to fill the number of open jobs. To fill the void, manufacturers are having to do two things:

• Train existing workers to perform skilled tasks.
  

• Find ways to make their business appealing to computer coders, app developers, data scientists, 3-D printing specialists, and other highly trained professionals.

To stay Industry 4.0 competitive, manufacturers must commit to doing four things: identifying crucial business needs, investing in technology that will meet them, building organizational capabilities and actively adapting processes and culture so both remain relevant. Choosing inertness over action could lead to your manufacturing business shutting its doors instead of opening new and potentially lucrative ones.