For the last few decades, the pervasive connectivity we expect in our personal lives has increased as much as it has at the office. While devices like computers, tablets, and phones demand internet accessibility, household appliances such as refrigerators and washing machines have expanded features and now make use of connected digital communication, too.
This interconnectedness of web technology and tech products that are all around us, referred to as the Internet of Things (IoT), is bringing expanded functionality and a significant boost to business processes in every industry. The manufacturing industry is especially feeling the impact – when interconnected smart manufacturing technology is incorporated, they’re getting entirely new levels of automation.
The IoT Disruption
The manufacturing industry is experiencing a massive shift as a result of a connected global economy. This shift is often referred to as “disruption” and forces a ground-up reconsideration of all standard business practices.
What’s so notable about the disruption of this industry is the sheer number of angles from which disruptive pressure is exerting itself on manufacturers. In fact, McKinsey estimates the economic impact of IoT applications in manufacturing alone to be $1.2 to $3.7 trillion by 2025.
As IoT infiltrates further onto the factory floor, manufacturers and their service providers must always ensure:
Connectedness and interoperability of their IoT technologies and manufacturing systems
Real-time access to and control of their IoT technologies and various devices communicating simultaneously
Security of their IoT technologies
ROI of their IoT technologies.
While the advent of IoT is its own disruptive force, it is also a response to other disruptive factors, including increased competition from overseas labor markets where manufacturing is cheaper, the ebb and flow of currency valuations in the global economy, new and expanded regulatory measures, as well as changes in the domestic and global labor markets. And that’s only scratching the surface.
Opportunity in Disguise
Machinery and processes are changing so rapidly that it’s forcing manufacturers to keep up with changing trends to stay competitive. Where IoT represents a disruptive force to manufacturing itself, it also represents an opportunity.
Some manufacturing companies can be so established in their way of operating that they become blind to a changing landscape of modern business. This creates an opportunity for early adopters to get ahead of their competition by boosting their efficiencies even more, improving business practices and becoming more cost-effective.
Manufacturers also have the opportunity for IoT to expand their product offerings and to help differentiate their products from their competitors’ offerings. In particular, the ability to generate and gather user data represents one of the greatest economic opportunities; in an increasingly data-driven world, gathering user data is no longer optional but is instead required for manufacturers to stay competitive.
Keeping up with the changing times precipitated by IoT requires new business processes that can be significantly streamlined by adopting faster, simpler and more flexible business management solutions. Next-generation manufacturing technology like Sage X3 is the best way for manufacturers to improve and increase their efficiencies, and realize the benefits of the IoT.
When the business-as-usual mindset of your competitors is creating an opportunity for your manufacturing company, contact us to learn more about Sage 500.
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