Arrow Down

Your Guide to IoT-driven Digital Transformation in Manufacturing

Nisha Gopinath Menon
March 25, 2022

To achieve maximum productivity, provide customers with quality products and services within record time, and enhance manufacturing and supply chain to grow exponentially in a short period, businesses have now turned towards digital transformation. Over the last decade, due to Industry 4.0, digital transformation in Manufacturing has transformed traditional roles like sales, marketing, manufacturing operations, and product development and made businesses more profitable.

Industry 4.0 is the fourth revolution of industrialization that has brought about the need to convert the raw, unstructured data we collected during Industry 3.0 with automation into structured and precise information. The ultimate aim of Industry 4.0 is to move the industry towards complete automation and deliver faster results. Digital Transformation and Industry Internet of Things (IIoT) are the branches of Industry 4.0, taking forward the innovation of manufacturing and digitalizing businesses.

We specialize in IoT digital transformation for businesses and thus have created a guide to IoT-driven digital transformation in Manufacturing. Reach out to us here for more information on IoT application development.

What is Digital Transformation in Manufacturing Industry?

Digital transformation in Manufacturing refers to incorporating the latest technology such as cloud computing, data analytics, and machine learning into business processes to meet customer needs and market requirements. The digital transformation process relies on the complete optimization and application of modern technology to reduce manufacturing costs, maximize profits, improve the quality of products, and decrease employee workload.

Smart Manufacturing and IoT driving digital transformation have been frequently used in place of "digital transformation in the manufacturing industry" to describe the paradigm shift, i.e., creating a complete digital ecosystem by digitalizing physical assets and business processes. Additionally, the process addresses the challenges of the manufacturing industry and provides new opportunities to the workforce.

Industry 4.0, Digital transformation, and Industry Internet of Things (IIoT) go hand in hand. While Industry 4.0 is the movement that encompasses all the latest technological developments in the manufacturing industry, digital transformation in the manufacturing industry involves new technologies for efficiency. And finally, IIOT is the result of digital transformation, consisting of connecting various physical assets of the industry to enhance processes.

What is IIoT?

Industry Internet of Things (IIoT) results from digital transformation in the manufacturing sector. It is an extension of the Internet of Things (IoT), but for industries. Like IoT, IIoT has leveraged technology in the manufacturing environment to optimize the production process further and help businesses scale up exponentially. It is applied in the manufacturing industry to ensure proper utilization of assets, track and extend equipment service life, and provide the best returns on fixed assets.

IIoT strongly focuses on the machine to machine communication, big data, and machine learning, enabling manufacturing industries to achieve better productivity in their operations. It includes applications, robotics, software-defined production processes, and ordinary devices. IIoT consists of many technologies, but the fundamentals primarily consist of Artificial Intelligence, Cyber Security, Cloud Computing, Edge Computing, and Data Mining.

IIOT provides a better system integration in terms of automation and visibility of various processes in the supply chain. However, what differentiates IIOT from IoT, is the convergence of Operational Technology (OT) and Information Technology (IT) that fuels the optimization of resources as well as management in the manufacturing sector. OT refers to connecting business processes to Industrial Control Systems (ICS), a collective term for the various devices, systems, and controls operating and automating industrial processes.

The ICS consists of:
Human Machine Interfaces (HMIs)
Distributed Control Systems (DCS)
Supervisory Control and Data Acquisition Systems (SCADA)
Programmable Logic Controllers (PLCs)

The merge of OT and IT has proven beneficial for the industries, feeding the need for consistent monitoring and controlling of physical infrastructures via smart sensors and remote controls.

Impact of IIoT on the manufacturing industry

The Industry Internet of Things technologies has transformed the production processes and thus have positively impacted the manufacturing sector across the three dimensions of digital transformation.

The three dimensions of digital transformation from the IIoT and manufacturing perspective are:

Dimension 1: Visibility of shop floor/ field operations

Industrial IoT offers extensive visibility into the shop floor and reasonable control over the company's resources. IIoT is making manual data redundant with its automated collection of unstructured data and converting it into useful information. IIoT also provides manufacturers with real-time visibility of the shop floor, allowing businesses to increase their overall productivity for further growth and popularity.

There are two kinds of applications that are available for manufacturers looking for visibility into field operations:

  • Applications supporting manufacturing operations
  • Applications facilitating asset management

Dimension 2: Visibility into the manufacturing supply chain

Industrial IoT-driven digital transformation provides manufacturers with smart supply chain management solutions, giving them live insights into the location, status, delivery, and condition of each individual inventory manufactured through the supply chain segments.

For instance, before IIoT, the condition of packages could only be monitored post-delivery or at the warehouse. With IIoT coming into play, inventory, package components, and conditions can be observed en route.
IoT-driven digital transformation for the manufacturing supply chain is beneficial for manufacturers shipping perishable or breakable products.

Dimension 3: Visibility of remote and outsourced operations.

The demand for distribution and outsourcing of the shop floor operations in the supply chain was backed by an ever-increasing rise in logistics costs, demand for customization, and a trained workforce.

According to location, cost, and local expertise, the distribution of various manufacturing processes has made it impossible for businesses to keep track of inventory, manage employees, oversee the shop floor, and grow business with the traditional methods.

However, the production standards can be monitored through the implementation of IoT in the manufacturing sector. IoT-driven solutions provide manufacturers with real-time insights into the shopfloor, distributed in various locations, and help them track the efficiency of operations, violations of SOPs, breakages, etc.

Benefits of IIOT adoption in Manufacturing

1. Reduction of operational costs

Optimized asset and inventory management, reduced machine downtime, agile operations, and efficient use of energy reduce the company's operational costs and create new sources of revenue.

IoT-driven inventory management is an excellent solution to help manufacturers track and report their inventory using automation. IIoT also ensures transparency into the statuses of individual inventory products, which includes lead time and current location. IIoT in factories reduces employees' workload in administrative tasks that other processes can otherwise be utilized.

2. Enhanced Safety

IoT in the manufacturing industry also ensures a better and safer working environment for factory employees while addressing safety hazards. For instance, the environment of an oil and gas factory is constantly monitored by IIoT enabled devices to check for gas leaks via pipe networks.

The factory workers receive RFID tags to gather data on their location, heart rate, skin response, etc., for the company to monitor unusual behavior, accidents, and overexertion. The data is then uploaded to the cloud to be analyzed by the contextual data for the final results.
Wearable devices can also monitor employee health statuses and risky activities that may lead to accidents and injuries.

3. Mass customization

Even though this process requires a notable increase in production to diversify the line of products and boost inventory, IoT digital transformation facilitates mass personalization of products by providing data to track inventory and manufacturing processes.

4. Less product cycle time

Fast and efficient manufacturing processes and supply chain operations reduce the product cycle time to increase inventory and sales.

Disadvantages of IIOT adoption

1. High investment, less ROI

To incorporate IIoT in the manufacturing industry, companies incur a lot of investments, from suitable hardware (i.e., sensors, systems, gateways), connectivity, server set-up, cloud storage, technical support, and administrative workforce.

So, it becomes imperative for businesses to figure out to generate revenue using IIoT to recover the hefty investment in the setup.

2. Data security hazards

It is believed that IIoT increases the risks of cyberattacks and exposes the company's data to security threats. With the rise in popularity of IIoT for Manufacturing, cyber threats are also expected to rise, giving users a valid reason to not opt for enabling their systems with IIoT.

3. Lack of trained staff for implementation

Technological advancements like the IIoT require trained professionals who are adept with the concept, installation and implementation, and troubleshooting processes.

However, since IIoT is the latest addition to digitally transforming the manufacturing industry, only a handful of professionals are available to implement the technology. Thus making it difficult for all sectors, big and small, to go forward with IoT-driven digital transformation to enhance their business.


The Industrial Internet of Things has aided many businesses to increase their productivity and growth by reducing operational costs, boosting employee productivity, reducing production time, and eliminating waste. IoT has also provided manufacturers with deeper insights into manufacturing processes, supply chain management, market demands, and enhancing customer service.

However, choosing the right path of IoT digital transformation for your manufacturing business requires careful planning and thoughtful consideration throughout the application design, development, and execution. Our senior engineers have worked on many IoT projects and have provided many customized solutions to our clients. Reach out to us for our personalized IoT-driven digital transformation solutions.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Need help with product design or development?

Our product development experts are eager to learn more about your project and deliver an experience your customers and stakeholders love.

Nisha Gopinath Menon