March 2, 2015
A look at what the internet of things and connected devices mean for US manufacturers.
We’re living in a hyper-connected world, an era of pervasive instrumentalization – from wearable technology, to people remotely “speaking” to their home appliances. On a consumer level, digitalized connectivity – made possible through a skein of communications through the Internet of Things (IoT) – has become commonplace, even expected. Indeed, the installed base for Internet-connected devices already exceeded 14 billion by early 2015, and is forecast to mushroom to nearly 50 billion by 2020 according to one estimate.
So, what does all this mean for US manufacturers? What we find is that connected devices and new data flows have already made impressive headway in manufacturing, but that we expect to see roll-outs accelerate, especially as the cost of the infrastructure (e.g., sensors, computing power and data storage) declines, and new IoT-related software makes analysis of the data from the devices easier to use. And, in a positive feedback loop, information technologies are in turn giving rise to entirely new kinds of data – and data flows – that can be acquired in real or near-real time.
Some manufacturers, of course, are further along than others in their IoT ecosystem build-out. In some ways, the ascent toward high operational intelligence through data-driven technologies can mean climbing up rungs – from deciding what data is to be collected to using data to automate operational decisions in near- or real time and to even inform long-term business strategies.
As part of our research, we surveyed US manufacturers to assess where they are with digitalized manufacturing and where they are headed. Some surprising findings include:
- 35% of manufacturers are currently collecting and using data generated by smart sensors to enhance manufacturing/operating processes; 17% plan to do so in the next three years, with another 24% with plans, but no timeline.
- 34% of manufacturers believe it is “extremely critical” that US manufacturers adopt an Internet of Things strategy in their operations; 60% believe it’s “moderately or slightly critical.”
- 38% of manufacturers currently embed sensors in products that enable end-users/customers to collect sensor-generated data; 31% have no plans to do so, and the balance plan to do so in the future.
As our survey of US manufacturers found, manufacturers are making impressive strides in leveraging more data in their operations. They’re also responding to customer needs by embedding intelligence into their products to increase functionality. Furthermore, manufacturers are connecting products to the IoT to track the performance of products over their life cycles to satisfy customer expectations for smarter products and to overlay services upon those products.
Manufacturers are undergoing an aggressive push to weave operations and processes of their factory floors into the Internet of Things, making this connectivity as commonplace – and expected – as consumers clicking on a check-out button.