Industrial IoT for SMEs: How connected legacy systems are changing the manufacturing sector

  • June 20, 2022

What do small and medium sized enterprises (SMEs) in manufacturing need to know about the Industrial Internet of Things (or “IIoT”, for short)? The technology (and the acronyms) can often be baffling for the uninitiated, who may not understand much of the jargon. Or, more importantly, they may be unclear about the many practical and achievable cost-savings and business benefits the tech can help their company achieve.

In very basic terms, the IIoT utilises connected machine-to-machine (M2M) sensors and smart devices on the factory floor, delivering real-time data that provides manufacturers with actionable business intelligence. This helps the organisation reduce costs, increase efficiency and better plan for the future. Given the current uncertainties around the resilience of global supply chains, making manufacturing as lean as possible has never been more important.

Often synonymous with the term Industry 4.0, IIoT is at the forefront of digital transformation initiatives, converting traditionally analogue manufacturing businesses into modern, digital organisations. Yet while digital transformation and IIoT adoption has consistently delivered clear returns on technology investments for many large, multinational manufacturing companies, there is still a concern that small and medium-sized enterprises (SMEs) in the manufacturing sector are being left behind in the Fourth Industrial Revolution.

The World Economic Forum reported in 2020 that, while SMEs are critical to the global economy, SME contribution to US GDP fell nearly five percentage points from 1990 to 2014. Additionally, the WEF noted that the stark differences in the rates of IIoT adoption between large, global manufacturers and SMEs is “exacerbating economic inequality, stifling opportunities for social mobility and dragging down global industrial productivity.”

What holds SMEs back from investing in IIoT?

It’s instructive to understand what is holding many SMEs back from adopting and investing in IIoT and other emerging Industry 4.0 technologies, with the three key barriers identified by the WEF being a shortage of skilled labour, a lack of access to capital and, crucially, unclear returns on investment.

It’s something of a chicken and egg situation. Larger firms are more likely to benefit from analysis of data collected from IIoT devices, because they are overcoming these skills gaps, and they are more able to access funds to invest in new smart factory technologies, largely because they have a clear understanding of the ROI.

For smaller and mid-sized manufacturers, as we outlined in our earlier blog on improving ROI, the four areas where they see a return on Industry 4.0 technology investments are product quality, machine availability, efficiency and energy consumption. This is why setting up key performance indicators (KPIs) on each, before, during and after any IIoT trial or deployment on the factory floor, helps SMEs to demonstrate proven ROI.

A clear and affordable IIoT roadmap for SMEs

It is in demonstrating such achievable returns to an SME’s board of directors, investors, the bank, or other stakeholders that the numerous benefits of IIoT for SME manufacturers start to become clear.

This, in turn, enables the decision-makers within the company to set out an IIoT roadmap that is understandable, affordable and in line with the business’s short and long-term objectives.

A key difference between large, global manufacturing firms and small and mid-sized factories is the fact that SMEs generally want to see improvements in overall equipment effectiveness (OEE) from any new technology investments within weeks.

This is why helping SMEs to connect and visualise legacy manufacturing equipment on the factory floor is a vital first step in any IIoT roadmap, simply because they don’t have the time, money, or capacity to replace existing machines or infrastructure.

The successful adoption of IIoT for small and mid-sized manufacturers must always be focused on continuous improvement of the skills, technologies and infrastructure that is already in place and not about the wholesale replacement of machines, technologies and processes. If SMEs gain a comprehensive understanding of these requirements, they will be in a strong position to join their larger counterparts in making the very most of IIoT.

Clear, actionable business intelligence from data

IIoT can help SMEs to boost their efficiency, productivity, and safety through better connecting the various legacy manufacturing processes, devices, and systems (MES, PLM, QM, MM, ERP, CRM and so on) that have historically developed over time to enable the business to create value.

Yet too many SMEs still struggle to transform the oceans of data produced from IIoT sensors and devices into real-world business benefits. Decision-makers within the business, at every level, need to see clear, actionable business intelligence from the data generated by any new IIoT deployments on the factory floor.

Connecting and obtaining real-time data from all of the above-mentioned legacy systems and machines is the essential first step in any SME IIoT strategy. However, it should be made clear that the adoption of IIoT doesn’t need to be a wholesale ‘revolution’. That’s because, when thinking about adopting IIoT technologies or Industry 4.0 tools, too many SMEs become overwhelmed by the feeling that they need to cover all bases, and every aspect of the manufacturing process, all at once. This doesn’t need to be the case.

Instead, IIoT adoption for SMEs can be carried out in incremental sprints that are controllable, affordable and easily implemented. The key is to plan any IIoT technology rollout carefully, based on your specific requirements and goals, to ensure the minimum levels of disruption to your day-to-day business operations. This means starting from the production floor and scaling up gradually.

Following this, the real value comes from consolidating data from all of these different, previously siloed sources into a single, closed feedback loop to help managers and workers on the factory floor to make better decisions, faster. By taking the right steps to eliminate these data silos and unify the information they collect, SMEs can become masters of their IIoT destinies.

Bringing IIoT to life

The bottom line, for SMEs is this: IIoT data is worthless unless it delivers actionable intelligence, from the plant floor to the top floor. That’s why the best IIoT solutions for SMEs unify, integrate, and analyse this disparate data coming in from newly-connected legacy systems, presenting it in simple and easy-to-understand visual dashboards that enable immediate results and continuous improvement across the entire manufacturing process.

FactoryEye provides SME manufacturers with a dynamic and comprehensive IIoT solution, supporting continuous improvement and helping companies to improve factory performance by providing full visibility and real-time insights into operational processes and KPIs. FactoryEye has been designed to help SMEs improve business performance by connecting, analysing and delivering all the necessary information decision-makers need to make accurate, informed decisions in real time, any time and anywhere.


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