IoT’s Impact on Manufacturing Innovation

Written By: Michelle Duke Hopkins
  • 4/1/2016

This week in Detroit the National Association of Manufacturers (NAM) gathered for a forum to discuss how the IoT is impacting manufacturing. It featured industry thought leaders and experts from Harvard Business School, GE, PTC, ServiceMax and other leading manufacturing innovators in the industrial IoT space. 

From discussions on how connected products are transforming competition and companies to showcasing smart manufacturing best practices and solutions that are already changing the factory floor today, the forum reinforced the impact that the IoT is having on the industry and the product lifecycle from product design to maintenance and service.

In opening remarks, NAM president and CEO Jay Timmons said, “The internet is not only changing what we make but it’s also changing how we make it. In the coming years, tens of billions of objects will be connected by the internet. Manufacturing is changing everything and all of these things are changing manufacturing. That’s why today manufacturing in the U.S. is leading an innovation revolution.”

Smart, connected products are indeed transforming manufacturing and the way companies compete in the marketplace. As manufacturers engage in Smart Manufacturing or Industrie 4.0 initiatives, you could also say smart, connected products are beginning to make smart, connected products.

During the forum PTC CEO Jim Heppelmann talked about how smart, connected products impact manufacturing in two primary dimensions— smart manufacturing operations and smart, connected product manufacturing. 

Smart Manufacturing Operations 

The first dimension involves furthering optimization in the factory through smart, connected equipment. Heppelmann highlighted how this level of connectivity can add new layers of control and even new kinds of autonomy into existing factories. He shared examples of how manufacturers can capitalize on smart, connected equipment that included:

  • Smart, connected equipment that integrates, automates, and optimizes the production process (e.g. Industrie 4.0 and Smart Manufacturing) to improve labor, material and energy efficiency

  • Smart, connected products that hold the individual production steps, including control of the manufacturing equipment, to automate manufacturing systems and enable multiple products on a single production line

  • Connecting equipment, factory sensors, and manufacturing systems to improve root cause analysis and corrective actions and enable real-time and predictive quality measurement

  • Utilizing Smart tools and smart work instructions connected in real-time to manufacturing systems to improve efficiency, quality and performance of assembly workers

Smart, Connected Product Manufacturing

In addressing the second dimension, the production of smart, connected products, Heppelmann says, “There maybe is no such thing as discrete manufacturing with smart, connected products because discrete manufacturing means do it and you’re done. In this case you’re never really done because you can keep changing the product years even after it has left the factory. You can think about new software capabilities, bug fixes and new enhancements.”

How do smart, connected products affect manufacturing production and ongoing product operation? Heppelmann shared that these types of products are capable of reducing the physical complexity of products as more features and variability are delivered via software, which simplifies assembly and also enables later stage design changes, via software, with the ability to finalize the product post-manufacturing.

And by relying on a cloud-based technology stack that must be continuously and seamlessly operated and improved over the product’s life, these products can be modified and enhanced after purchase and customized based on the customer’s evolving preferences.

These two dimensions have undoubtedly created an innovation revolution in manufacturing. It is evident from the discussions at the NAM forum that it is changing the way manufacturers not only think about manufacturing in the future but it is reshaping their strategy, operations and organizational structure today.

For more information on how smart, connected products are transforming companies and competition, download the Harvard Business Review article series co-authored by Jim Heppelmann, CEO of PTC and Dr. Michael Porter, Harvard Business School professor. 

Photo by D. Bohrer/NAM

Related articles:

Accelerating the Adoption of Industrial IoT
The Industrial IoT Gains Momentum


  • Connected Devices
  • Industrial Equipment
  • Industrial Internet of Things

About the Author

Michelle Duke Hopkins

Michelle Hopkins is Managing Editor of Product Lifecycle Report. She has spent her career in marketing and communications in the technology industry focused primarily on enterprise software. Michelle enjoys researching and writing about how new technology trends and innovations can transform business processes and impact customer relationships, competitive advantage and overall revenue and profitability. Frequent topics include the Internet of Things, manufacturing, service lifecycle management and STEM.