Manufacturing IIoT and mergers and acquisitions

How to Save Costs, Optimize Operations and Increase Value

The Industrial Internet of Things (IIoT) is a transformative technology that is revolutionizing the way manufacturers operate. By integrating IoT sensors and devices into industrial processes, IIoT enables businesses to gather and analyze data in real-time which improves operational efficiency, reduces downtime, enhances productivity, and increases corporate value.

Technology has become increasingly critical in M&A transactions as acquirors look to jumpstart their Industry 4.0 processes. Some deals are based solely on the acquisition or sale of industrial technology – every other business asset is secondary. It’s the new gold rush. In performance improvement and restructuring engagements, technology is one of the first areas assessed and invested into aide in a business’s turnaround.

The implementation of key IIoT-based technologies will drive a host of decisions as manufacturers look to grow, from where to make factory and plant investments to what kinds of products to make, whom to sell to, how to organize supply chains, and whom to hire. For example, future population growth in many industrialized countries, and manufacturing’s traditional markets, is forecast to continue slowing down in coming years. As noted in a recent article in the Economist, industrial manufacturing in the U.S. has migrated to the South where companies have access to more potential labor and land for expansion. In addition to population growth, robotics and automation will be needed to fill the factories of the future to maximize productivity.

Top 3 Areas of Manufacturing Improvement with IIoT

1. Predictive Maintenance

One of the most significant areas where IIoT can save costs and increase value is through predictive maintenance. Traditional maintenance practices involve scheduled downtime to perform preventive maintenance on equipment and sometimes unscheduled downtime due to maintenance issues.

IIoT sensors can supply real-time information about equipment performance, allowing businesses to predict when maintenance is required. Predictive maintenance enables businesses to schedule maintenance during periods of low activity, minimizing downtime, and reducing product rework and maintenance costs.

2. Inventory Optimization

Inventory management is a critical aspect of industrial operations. Maintaining a large inventory can be costly, as it ties up capital and requires storage space. It can also result in excess obsolescence as excess inventory ages. On the other hand, keeping low inventory levels can lead to stockouts, production delays, and increased costs.

IIoT sensors can monitor inventory levels in real-time, allowing businesses to optimize inventory levels based on demand. By accurately forecasting demand and supporting optimal inventory levels, businesses can reduce inventory holding costs, minimize stockouts and obsolescence, and improve production efficiency.

3. Supply Chain Optimization

The IIoT can also help businesses optimize their supply chain, reducing costs associated with transportation, storage, and logistics. By leveraging IIoT sensors, businesses can monitor the movement of goods and track their location in real-time, enabling them to optimize routes, reduce transportation costs, and improve delivery times.

IIoT sensors can also monitor temperature and humidity levels during transportation, ensuring that goods are transported under optimal conditions, reducing spoilage, and minimizing waste.4. Quality Control.

Maintaining high-quality standards is critical for industrial operations. Inferior quality can result in rework, scrap, and customer complaints, all of which can be costly. IIoT can help businesses to maintain high-quality standards by monitoring production processes in real-time.

IIoT sensors can detect defects, allowing businesses to adjust production processes in real-time, reducing the likelihood of defects and improving product quality. By maintaining high-quality standards, businesses can reduce the cost of rework, minimize scrap, and improve customer satisfaction.

As with any technology, the key to success with IIoT lies in implementation. Manufacturers must carefully plan and execute their IIoT strategies, leveraging the expertise of experienced IIoT professionals to ensure that they achieve their desired outcomes. By taking a strategic approach to IIoT implementation, businesses can unlock the full potential of this transformative technology and reap the benefits of improved efficiency and reduced costs.

From predictive maintenance to inventory and supply chain optimization, to quality control, IIoT can provide real-time insights, allowing businesses to make data-driven decisions, optimize operations, and reduce costs. These are attractive qualities and can increase valuations or place a manufacturer in a stronger financial position to expand through acquisitions.


Interested in more IIoT trends in manufacturing? Check out our Manufacturing Sector Report!