The Impact of the Internet of Things on Manufacturing

August 11, 2015

By Adam Beckerman, partner-in-charge of Manufacturing and Distribution, and David Siegel, assurance senior manager

Imagine a world in which industrial accidents don’t happen, a world where scrap doesn’t exist, a world where machines don’t break. In the next couple of decades, all of this could exist, and that will only scratch the surface.

The world is becoming more and more connected, and through the use of economical sensors and powerful analytical and predictive software, known as the Internet of Things, the manufacturing floor is ripe for a revolution. The technology that today is only available to the largest and wealthiest manufacturers will soon be available to the masses. Those that harness the power of information will succeed; those that don’t will be left to rust.

What is the Internet of Things?

According to the Oxford Dictionary, the Internet of Things is “the interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data.” Due to the drastically reduced cost of sensors and computing power over the past several years, the future of the factory floor will include millions of sensors on a variety of machines that produce terabytes of data. Successful manufacturers will harness this data and use it to improve efficiency and drive down costs, but how?

Predictive Maintenance

One of the most popular and well-publicized uses of the Internet of Things in the industrial setting is to track usage of machines and predict when they are going to break down. Startup Uptake and industrial giant GE are investing significant dollars to deliver sensors and software that will predict when machines should be serviced. By eliminating unplanned downtime, factories will cut out one of the most costly variables that lead to delays and unneeded costs on the manufacturing floor.

Management Insights

By attaching sensors to different machines in the production process, companies are able to track progress from across the world and immediately be notified when a line goes down. This saves manufacturers from having to wait until the end of the day, or the end of the month, to see if production targets are being met. Companies are also able to share progress with customers and vendors, bringing new meaning to just-in-time production. In addition, the costs of carrying inventory will be greatly reduced since companies will know exactly when they need parts, and exactly when those parts will be delivered.

The Human Implication

Not only are sensors being placed on machines, but sensors can also be placed on human resources on the manufacturing floor. Companies are already investing in equipment that enables employees to biometrically clock in and clock out of work. In the future, employees could carry an RFID sensor that automatically clocks employees in when they enter the factory, tracks time associated with individual jobs and could even detect if an employee is not keeping up with a benchmark speed. Using sensors, employers could identify employees that need extra training or identify the best performers based on hard data. From a safety perspective, managers could track the physical location of their employees should an accident occur, and the employer would have unprecedented visibility into the actions of laborers.

Not only are advances in tracking equipment inevitable, but the processes in which employees are trained are destined to see drastic changes as well. In the future, employees will use “wearable” technology such as interactive eyeglasses that provide employees with real-time assistance. Individuals working on the manufacturing floor will be able to read manuals through a screen on their eyeglasses and show a problem to a help desk that can provide assistance, all without ever taking their eyes off the task at hand. These types of technologies are already in the works.

Movement of Goods

One of the leading causes of accidents in manufacturing plants is human error. The more processes that can be automated, the safer manufacturing plants will become. One exciting improvement coming soon to manufacturing floors will be autonomous material movers. This technology will reduce accidents, reduce costs and improve efficiencies.


In the connected world that we live in, U.S. manufacturers are no longer the low-cost provider. U.S. manufacturers must compete on speed and quality without pricing themselves out of the market. U.S. companies will have to invest in new technology to keep prices low while at the same time lowering lead time and not sacrificing quality. The next decade will see a revolution on the factory floor with more processes becoming automated and tracked meticulously through the use of sensors and powerful data analytics in the Internet of Things.

For questions or more information, contact Adam Beckerman at or 404-898-7542.

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About the Author

Adam Beckerman

Adam Beckerman is Aprio’s Manufacturing and Distribution Leader and Assurance Partner. Adam's team of 30 professionals focus on the manufacturing industry with 20+ years of experience enabling the success of manufacturing start-ups, growth companies and businesses preparing for equity events.

David Siegel

David Siegel works closely with CFOs and business owners of high-growth domestic and international businesses to plan and execute exit strategies, improve EBITDA, and prepare for transactions. He’s passionate about helping innovative companies with complex business models navigate challenges and achieve business goals.