Science fiction to science fact: IoT in manufacturing

June 27, 20175 Minute Read

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Manufacturing’s been having a quiet revolution when we weren’t looking—or, should I say, when we were looking at our mobile devices. In a world where hundredths of seconds can affect profitability and revenue margins, tech is touching everything. The manufacturing industry, in particular, has experienced significant innovation, and IoT technology offers companies the tools they need to be better and faster than ever.

When examining how IoT boosts manufacturing across industries, there’s data that supports improving quality, reducing costs, lowering risk, and introducing new potential for customized products. Did we mention a casual 82 percent of manufacturing organizations using IoT tech are more efficient?

The revolution is so real and measurable it’s been referred to as the Fourth Industrial Revolution. Buckle up—the AR tech behind last year’s Pokemon Go phenomenon is graduating to military and industrial applications, like helping engineers at Lockheed Martin assemble F-35 aircraft. Factory-floor workers can now see 3D blueprints as hologram overlays on machines they’re repairing. It’s science fiction as science fact, which we’ll likely see more of given the way tech is boosting efficiency today.

It’s all about the data

Manufacturing experts have long had an obsessive focus on quality and efficiency, enabled by tons of data. Putting an extra ounce of product in customer packages can result in thousands—or millions—of dollars wasted if these errors aren’t quickly caught and corrected. But, as Charles Horth points out, even really great technology-assisted quality control processes were still relatively “dumb” manufacturing. If you notice your products are the wrong size after just 15 minutes of manufacturing, an organization has still wasted time, effort, and inputs.

What’s the secret to faster, smarter quality correction? It’s in the data. IoT technology produces massive, fast-moving streams of data on everything, which at many manufacturing organizations, is integrated into resources planning technologies. These tools enable skilled technicians to map the process from customer order to delivery—controlling for customization, input ordering, and quality without an iota of waste or inefficiency.

IoT plays inventory Big Brother

In McKinsey’s 2013 interview, Markus Löffler said, “Most companies think of physical flows—meaning the flow of material components through the supply chain—as separate from information flows, and then consider how and where to coordinate and synchronize them.” Manufacturing organizations traditionally used cumbersome pieces of enterprise resources planning (ERP) software to track the flow of materials and determine which items need to be replenished on a just-in-time basis. Inventory and product are one process, and the technology used to track them is another entirely.

This is changing as sensors are integrated into the process. Now, some cutting-edge manufacturers in the retail industry are tackling the annual $49 billion annual shrinkage problem, or disappearing inventory, with RFID technology. While a great deal of this shrinkage occurs due to employee fraud and shoplifting in-store, there’s a number of points along the inventory’s journey to the retail storefront where inventory can just, well, disappear.

The impact of RFID, a relatively simple use of IoT tech, is already measurable. For major US brand American Apparel, it took just 4.5 months to earn back its initial investment in RFID and IoT technology to track all their products from factory to storefront. Looking toward the future, the integration of product and process will become even more intertwined. Instead of RFID tags on each individual item that allow logistics centers to track items from manufacturing to storefront, the product itself could contain the information.

Siegfried Dais, chairman of Robert Bosch GmbH, explained to McKinsey that the very materials used for additive manufacturing of a product could contain information on product design, manufacturing process, and intended customer. This “extreme vision” of IoT integration could mean a future where quality control processes are guided by the product’s ability to self-detect weaknesses or deviations. It means manufacturing where little human intervention or oversight is required.

Mass customization at scale

One of the greatest gifts big data technology has given our culture is the idea of personalization at scale. Even though you’re one of millions of people who use Netflix to unwind after work, their algorithms provide you personalized recommendations (and we got to enjoy hilarious algorithm fails as they improved it). Big data is also the reason your Spotify account understands your preference for “twangy political bluegrass jams” better than you do (the first step is acceptance).

Today’s consumer packaged goods (CPG) organizations are rising to meet customer demands for personalization in everything—from customized food products to clothes built to your exact measurements. Think of Coke’s personalized marketing campaign, enabled by HP Indigo digital presses, where cans had names on them as an early indicator of customization at scale.

The factory of the future will allow brands to communicate directly with manufacturers about demands for customized products, which will more likely be limited runs of specific products. Product specifications will be automatically translated into specific details on the product, quality standards, schedule, and an optimized cost per item. The machines will get to work, and the customer will have their limited-run product ready for distribution at your local grocery store.

IoT for on-demand everything

When this system gets optimized is about the time customers can get excited about how IoT boosts manufacturing across industries. Imagine a world where you could think of the strangest idea for a product ever—maybe a cucumber jalapeno and vanilla soda—and hop onto Amazon and place a not-too-expensive order that will be made to your custom specifications and dropped by drone at your door within a few hours time.

It’s a far-off idea that even the Jetsons couldn’t have dreamed of, but it’s also a possibility—one that manufacturing’s increasing use of IoT technologies may make real in your lifetime.

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