The Internet of Things and the Manufacturing Revolution

Manufacturing is the commercial giant that propels the world forward.

Like all sectors of the global economy, it is continually being reinvented through technology, particularly by the impact of the Internet of Things (“IoT”). The competitive landscape and critical business processes are rapidly shifting as IoT drives innovation and productivity improvements. Over the upcoming years, seismic changes will occur in how products are made, utilized, and interact with the world around them. It is both exciting and daunting to imagine how this incredible revolution will shape all aspects of business. We are on the cusp of incredible change.

Here are a few thoughts on how the Internet of Things (“IoT”) will improve decision-making for leaders and enable savvy companies to reap an increasingly larger share of the market moving forward, as well as the issues created by IoT that companies must anticipate and tackle.

The Growing Role of the Internet of Things in Manufacturing

The term “IoT” refers to the computerization and communication of physical objects. McKinsey & Company offers the succinct definition of the IoT as “physical objects embedded with sensors and actuators that communicate with computing systems via wired or wireless networks—allowing the physical world to be digitally monitored or even controlled.”

The IoT is everywhere, from smart homes to self-driving vehicles to entire city centers. The interconnected network of technologically enhanced objects is growing every year. In 2022, the IoT market was worth $544.38 billion. In 2023, a year marked by economic struggles, that valuation is still expected to rise by 19%.

Splashy IoT applications, like smart fridges and thermostats, are fun. But many of the best uses of the IoT in the coming years will likely take place behind closed doors, including in factories. In manufacturing, this is referred to as the “Industrial Internet of Things” or the “IIoT.”

Advanced sensors and connectivity technology are driving the IIoT forward at a blistering speed. It enables companies to utilize smart manufacturing to continually refine their operations by:

• Enhancing the precision of inventory management;
• Reducing operational costs across the supply chain;
• Monitoring both the need for new and the state of existing capital investments; and
• Gauging supply chain operations against customer demand.

All of these advantages will lead to a variety of distinct benefits. The most obvious of these is better productivity on a day-to-day basis and faster response times when issues arise.

As companies implement more sophisticated intelligent systems and their constituent IoT devices, the quantity and quality of data will also increase. This will provide detailed, real-time insights into how manufacturing processes are working and where to make improvements.

The Human Element of a Successful Industrial Internet of Things Transition

It’s difficult to put a specific valuation on the potential benefits of the IIoT in manufacturing. But there’s no denying the fact that the potential is incredible.

With that said, we’re still talking about potential benefits. It will take careful orchestration for companies to turn these latent benefits into bonafide realities as technology develops.

For example, brands will need complex and updated ERP (enterprise resource planning) technology to capture, organize, and analyze their growing data and insights. Integrated CRM (customer relationship management) technology will also be required to enable customers to have frictionless experiences with smart warehouses. Ongoing, intricate cybersecurity will also be a continuing concern.

All of this doesn’t even take into account the need to maintain, update, and upgrade existing IIoT devices on schedule. From successful implementation to maintaining profitability and productivity, the requirements here are significant. Cashing in on the increasing capabilities of the IIoT requires leaders with a visionary mindset and an exceptional ability to balance risk and act with confidence.

“Cashing in on the increasing capabilities of the IIoT requires leaders with a visionary mindset and an exceptional ability to balance risk and act with confidence.”

These are the kinds of individuals that our Stanton Chase team members are always looking for. Our experienced executive recruiters know how to spot forward-thinking leadership talent — the kind of professionalism that is at a premium. We have helped many companies build strong leadership teams that can tap into the IoT and other technologies with success.

Manufacturers that wish to take advantage of the potential of the burgeoning IoT in the coming years must ensure that they hire the best personnel for their C-suite to execute that vision. The companies with innovative leadership will make up the vanguard of the next great revolution in the manufacturing industry.

About the Author

Kevin McGonigle is a Director for Stanton Chase’s South Central region. Over the span of his three-decade-long career, he has garnered extensive experience across industries, including telecommunications, high tech, financial services, hospitality, consumer goods, and industrial. His career spans five continents and includes prominent Fortune 500 companies, private equity firms, and family-controlled businesses.

Click here to learn more about Kevin.