Major Trends in IoT in the Manufacturing Industry

The Internet of Things (IoT) has become an essential resource for factories to provide an information network to deliver automation, analytics, and real-time decision-making capabilities. Nearly one-third of production processes and equipment use IoT technology. As a result of this, the manufacturing system brings pervasive visibility across factory operations, and streamlines the manufacturing process.

Some of the Major Trends in IoT in the Manufacturing Industry

Digital Twins

Digital representations of physical objects and systems are well-established ideas. When these ideas are integrated with analytics and real-time data, they can be powerful manufacturing operations tools. Manufacturers are focusing on the digital twin approach to identify the potential outcomes of maintenance. Globally, manufacturers are spending billions of dollars on digital transformation. For instance, Volkswagen, a leading automotive company, planned to pour billion of euros in digitization projects by 2023. In addition to this, the manufacturer also said that the digitization brings more than 2,000 new job opportunities in digitization projects. The emergence of digital twins brought a new revolution, enabling IoT, digitization, AI, and ML to disrupt the automotive industry. It enables the use of a computer program to observe physical objects in the real world, and to monitor and predict the behavior of virtual platforms in the automotive industry.

Sensors

Today, manufacturers are utilizing sensors in everything from product tags to production equipment. They collect all types of data, feeding data into factories’ analytics systems and tracking everything from access to logs, and thereby globally increasing the demand for Radio Frequency Identification (RFID) tags, which are utilized heavily by the manufacturing industry for name tags, product containers, manufacturing equipment, and other objects. These sensors help to keep a track of the employees and assets in the production operation. Globally, the industrial sensors market is driven by manufacturing industry due to growing demand for sensors in automotive, aerospace and heavy equipment manufacturing industries.

Swarm Intelligence

Swarm intelligence has emerged as a new trend in the manufacturing industry. It is a process that collects information from various sources and applys analytics tools to create actionable insights from connected devices. Globally, manufacturers are applying swarm intelligence in complex IoT systems to analyze and logically control the production of operations. Swarm intelligence algorithms help to resolve the complicated issues associated with IoT systems, such as detecting bottlenecks and optimizing manufacturing processes to streamline production flow.

Artificial Intelligence

Today, AI adoption is growing rapidly across various industries; the manufacturing industry, specifically, has experienced tremendous change. Artificial intelligence is an essential tool for predictive maintenance, a vast amount of data interpretation, and understanding the patterns in data in order to make insightful decisions. Artificial intelligence enables manufacturers to recommend a predictive maintenance option before equipment fails. In the future, AI will also perform hazardous jobs in the production process to minimize employee injuries and increase efficiency.

Major issues in the manufacturing industry include employee retention, the cost of production, and high competition. However, the integration of AI and IoT will result in better connectivity, a reduced dependency on manpower, real-time tracking, and a more efficient utilization of all available production resources.  AI and IoT will revolutionize the industry by achieving high production at a low cost:

• The manufacturing sector accounted for 25% of all AI implementation across the world for maintaining machinery and production assets; and
• General Motors detected 72 instances of component failure across 7,000 robots, to identify issues before they could result in unplanned outages.

Augmented Reality

Today, augmented reality is acquiring a new dimension, with IoT connecting the digital world and utilizing digital information from physical devices. Augmented reality is an enhanced version of the physical world that can be achieved using digital visual elements and sounds. IoT works as a bridge between physical assets and digital infrastructure, while AR brings digital to life by interacting with physical infrastructure in real-time. AR uses specialized software and hardware to connect with the real world seamlessly. The manufacturing industry can benefit from this technology by providing real-time information and instructions to workers about equipment and machinery performance.

Globally, augmented and virtual reality technology spending reached $10.5 billion in 2020, with the CAGR projected to increase 70% from 2019 to 2023. The manufacturing industry accounted for 19% of overall spending.

Looking for a more in-depth analysis of the industrial technology and IoT sectors?

If you are interested in discussing the current state of M&A within the Industrial Technology market, or the broader Industrials industry, please contact us using the form provided below. We welcome the opportunity to learn how we can assist you in navigating today’s dynamic M&A environment and maximizing your strategic objectives. Our industrial technology investment banking team has a deep understanding of the strategic, financial, and operational factors impacting middle market companies and has a long track record of success in representing companies in M&A advisory.