Smart Manufacturing Era: How IoT is Reshaping Digital Transformation

By:
Kevin Claxon, Managing Director, Manufacturing Advisory Services, Aprio Advisory Services, LLC
Cliff Tironi, EVP Strategic Accounts, Thinaer

At a glance

• The main takeaway: IoT technologies are revolutionizing traditional manufacturing through digital transformation by enhancing efficiency, enabling real-time monitoring, and fostering innovation. 
• Impact on businesses: The manufacturing industry is evolving at a rapid pace and while digital transformation is complex, investing in IoT technologies is crucial to succeeding.
• Next steps: Aprio’s Manufacturing and Distribution Services team in collaboration with Thinaer can help manufacturers and distributors fine-tune their operations and leverage advanced digital technologies.

Schedule a consultation today

The full story

The manufacturing industry has endured four industrial revolutions, a global pandemic, and more recently, ongoing foreign trade tension. And yet, manufacturers and distributors continue to be at the forefront of technology. The rapid deployment of digital technology provides manufacturing companies with opportunities to increase productivity and throughput, gain real-time visibility, and reduce costs.

Digital transformation, when effectively leveraged, can pave the way for a new industrial revolution with smart manufacturing at the helm. By integrating digital technologies, smart devices and systems can transform traditional manufacturing into modern intelligent ecosystems. In a highly interconnected and responsive manufacturing network, every aspect of production from supply chain to customer interactions is optimized and data-driven.

What is IoT in Digital Transformation?

At the core of digital transformation are technologies like the Internet of Things (IoT), which in manufacturing refers to the interconnectivity of devices that collect, share, and analyze data to enhance day-to-day operations. While this connectivity offers manufacturers and distributors the opportunity to transition from traditional operations to a smart ecosystem posed to improve efficiency, productivity, and flexibility, many mid-sized manufacturers struggle to navigate the increasingly complex digital landscape.

How IoT is Reshaping Modern Manufacturing

The adoption of smart sensors in manufacturing products may date as far back as the 1960s. Manufacturing giant Proctor & Gamble was the first to coin the term “internet of things” in 1999, when an employee included the term in a presentation on supply chain optimization. Now, IoT smart devices are reshaping the industry by facilitating real-time data collection and decision making.

As a pivotal driving force in the industry’s connectivity between systems, machinery, and operations, IoT also extends to various aspects of operations from predictive maintenance to optimizing supply chain and inventory management.

6 Key IoT Sensors in Manufacturing

While there are hundreds of smart sensor variations, six of the most common manufacturing sensors are:

1. Temperature sensors measure the current temperature of machinery and rooms to help ensure the quality of the product is safe, such as food. These IoT sensors send alerts if temperatures move to levels that are too high or low based on programmed ranges.
2. Humidity sensors monitor the level of moisture in the air, which can degrade product quality and even some equipment. Humidity and temperature sensors often go hand-in-hand to ensure the environment of products and equipment are properly controlled. 
3. Vibration sensors monitor machinery and equipment vibrations to ensure everything is running properly. These IoT sensors can detect equipment failure, anomalies, and predictive maintenance early.
4. Proximity sensors are used to measure the distance between objects as they move throughout a warehouse or facility. The sensors emit electromagnetic fields and send alerts when there is a change in the surroundings. 
5. Pressure sensors measure the pressure of air, fluids, and gases that are commonly found in industrial environments. These sensors can detect substantial pressure changes as well as discover leaks or blockages within an environment.
6. Motion sensors are one of the most common sensors used to detect physical movement of people, products, and vehicles. 

Operational Efficiency Benefits of IoT Smart Sensors

IoT smart devices are central to digital transformation making them the eyes and ears of modern manufacturing, or what some refer to as Industry 4.0. They enhance production line efficiency, reduce operational costs, automate processes, and detect and address potential equipment failures to mitigate costly downtime. IoT sensors are central to the digital transformation in manufacturing, bringing about profound changes through several key aspects:

1. Improved efficiency and cost reduction: IoT enables manufacturers to optimize processes, reduce waste, and streamline production. The real-time data collected allows manufactures to make quick turns that lead to significant cost savings.
2. Predictive maintenance: Continuous monitoring of equipment health and analysis of data collection by sensors means potential issues can be identified and addressed before they lead to failures and minimizes potential downtime.
3. Supply chain optimization: IoT sensors provide visibility into inventory levels, track the movement of products, and monitor conditions during transit. This information is crucial for supply chains to reduce costs and lead times.
4. Enhanced quality control: Maintaining quality control and assurance is imperative in manufacturing. IoT devices provide real-time data on every stage of the production process to ensure that products consistently meet regulatory standards and customer expectations.
5. Safety and worker protection: Since smart devices are consistently monitoring the conditions of equipment, they also significantly improve safety protocols by increasing worker health and reducing workplace accidents.
6. Sustainability impact: By fostering more energy-efficient processes, IoT sensors enable manufacturers to identify areas where improvements can be made that lead to the reduction of energy usage and environmental impact.

Demystifying Three Common Barriers to IoT Adoption

While IoT sensors offer immense benefits, their implementation in manufacturing is not without challenges:

Cost of new solutions

The initial investment of new technology and the subsequent training will naturally feel daunting. To overcome the cost barriers of deploying IoT smart devices will require manufacturers to carefully evaluate the cost and potential return on investment. While the long-term benefits of IoT are substantial, strategic planning and transparent conversations with key stakeholders will be crucial in justifying the expenditure.

Downtime during implementation

Anytime downtime for manufacturers, planned or not, can be costly. Integrating IoT sensors into existing manufacturing systems can be complex and requires careful planning and execution. However, deploying IoT solutions is a matter of days not weeks, and can be done with little to no disruptions to operations and production lines. 

Data security concerns

As the world continues to grow increasingly digital, the adoption of IoT and connected devices raises significant data security concerns. To effectively ensure the data collected and transmitted by smart devices is protected, manufactures must implement robust cybersecurity measures, including encryption protocols, secure communication channels, and data monitoring best practices to safeguard sensitive information.

The bottom line

The journey to towards digital transformation is complex yet rewarding. With how quickly the manufacturing industry continues to evolve, investing in IoT technologies has become crucial for manufacturers and distributors to succeed in an increasingly competitive landscape. Integrating smart sensors and a digital strategy provides manufacturers with the agility and responsiveness needed to not only streamline existing processes but also innovate and swiftly adapt to changes in demand.

However, a commitment to digital transformation requires a strategic approach that fosters a culture of continuous improvement and leverages the full potential of IoT. Aprio’s Manufacturing and Distribution Services team in collaboration with Thinaer can help manufacturers and distributors fine-tune their operations and leverage advanced digital technologies. Don’t be left behind; leverage technology for the future of your business.

Related Resources

Aprio’s 2025 U.S. Manufacturing and Distribution Survey Whitepaper:
Discover Key Insights that will Impact the Future of Manufacturing

Everything included in Trump’s “Liberation Day” Tariffs

6 Manufacturing & Distribution Insights from Q2 2025 and What They Mean for You

Case Study: Process Improvement – Lack of Standardized Processes Delayed Time-to-Market