IoT Implementation in the Manufacturing Industry

Date:February 29, 2024

Author name:Raghuram Joshi

Date:February 29, 2024

Author designation: Senior General Manager - Enterprise Applications, IoT, and Cloud Services, Bosch

How to overcome pitfalls in IoT Implementation in the manufacturing industry?

IoT (internet of things) is a vital element of the digital transformation journey of an organization. The increased adoption of IoT across industry segments and businesses is opening up tremendous possibilities in terms of business and revenue models. The ability to help drive traditional product centric business into the realm of servitization has attracted lots of attention. While IoT is increasingly being successfully adopted in many scenarios, there are equal number of failed attempts, if not more. This pot of gold comes with its own risks and pitfalls that are quite different from a traditional IT implementation story. The article discusses the challenges and necessary measures in the implementation of IoT enabled solutions.

The new wave of transformative technologies

Manufacturing industry is undergoing a wave of transformation lead by advancement in new age technologies. Increasingly, standalone factories of the yore are metamorphosing into large connected production ecosystems aided by connected machines, connected supply chains and even connected people. At the heart of this mega transformation known as the Industry 4.0 is the Internet of things (IoT). This transformation is resulting in a very desirable scenario of having more efficient production based on highly networked and automated machines. These highly efficient production lines help in reduced time to market and increasing customer centricity and thus becoming a norm in the manufacturing industry.

These advantages are not just limited to increased production efficiency, they also results in derived benefits such as increased transparency, improved quality control and traceability. Implementation of IoT also opens up a new realm of possibilities in the non-linear space – turnover not directly linked to production. New revenue streams based on data economy open up opportunities that were not available in pure play engineering or product space.


Beware, Pitfalls Ahead!

Beware, Pitfalls Ahead!

Given these tremendous opportunities, it is but natural that it has attracted lot of attention. Organizations have invested heavily in riding this wave in an attempt to stay ahead of the competition. However, many of these attempts and investments have not yielded the desired outcome. More and more instances of failed or abandoned IoT projects have led to adverse impact on the digital transformation journeys.


Security: Essential for System Design

Security: Essential for System Design

Let us begin with one of the most talked about aspect, that of security. Traditionally, manufacturing setups have been closed systems, integration of IoT into the manufacturing system creates a realm of cyber-physical systems. There is a need to connect not just within a factory or an enterprise, but to an ecosystem, which would encompass other enterprises. One needs to consider security in two dimensions – security of the system and security over lifecycle.

Security needs to be an essential element of system design with necessary focus on prevention, detection and response. A full stack view of security, including hardware and software, especially for those components contributed from beyond the enterprise is necessary. The second dimension; security over the lifecycle basically relates to the need to have consideration for the fact that a typical IoT implementation integrates many entities and it would have a lifespan over decades. Interfacing and integrating them with a view on the overall lifecycle of the product needs a special consideration.


Team Composition: Need for Cross Domain Competencies

In the past, Information Technology (IT) and Operational Technology (OT) were looked at as two different parts of an enterprise. While IT focused on technology managed processing of information, the OT supported the devices, sensors and software that focused on the manufacturing process. Although, these two have been converging for some time now, emergence of IoT has accelerated the process. In many cases, the responsibility of digital transformation is left solely to the technology departments within the organization. There is a need for wider involvement of multiple teams, including business, technology, data science, finance, and user experience. Any missing element would show up as a suboptimal solution in the end.


Clarity on Purpose

Clarity on Purpose

While this may sound very basic, defining the problem statement with a clear purpose is sometimes subordinate to the more glamourous part of technology adoption. This invariably leads to divergent views on what success finally means. This gets accentuated when the beneficiaries of IoT implementation are spread across the organization. It is worthwhile to ponder over the priorities of the digitization journey, whether it is productivity, quality, time to market or some other business scenario While it is important to have a comprehensive blueprint, a step by step approach to running prototypes, followed by localized implementation and finally a rollout and at each phase validating the purpose.


Organizational Change Management

Organizational Change Management

A seamless data driven connected system, for example, brings various functions of the organization at higher level of transparency. While this may bring in cross-functional synergies, such openness would expose functions to inquiry into their areas of expertise, from other segments. This needs a culture of high degree of openness and trust in the enterprise.

Also, when it comes to working with external partners, new touchpoints within the enterprise emerge. Many have little or no experience working beyond the enterprise, as these touch points have traditionally been managed by few designated functions. To make it even more complex, production and supply chain processes that are part of larger ecosystems, could have completely unlikely partners, even competitors. Dealing with this exponential change in operations calls for major change management initiative.


Scale by Design

Scale remains one of the most prominent reasons for failure of IoT projects. Many of the pilots and proof of concepts work remarkably well in the confines of a controlled environment. However, they fail miserably in the field as the choices made for pilot prove to be inadequate once scale kicks in.

This does not require the pilot to be a full blown scalable model, however, it is crucial for the pilot to validate the project’s concept. When the enterprise moves to the full scale implementations, it is necessary to have a high level roadmap to replicate the desired outcome as experienced in a controlled environment. Scale by Design is an important element to be recognized and it should not be limited to technology, but extend it to external partners and organization’s overall business operations including elements of service.



IoT being a connected technology, demands a connected ecosystem; primarily comprising of three layers – device, platform and solution. The device layer (machines and sensors) and the platform layer (software solutions and cloud) are created in a broad manner not necessarily built keeping IoT in mind. The implementation partner stitches together the layers to create a customized IoT solution for the enterprise. There is rarely a case of ‘one solution fits all’. The high level of complexity and the need for high level of domain expertise necessitates a full stack IoT solution provider with profound domain knowledge as the implementation partner.

To overcome the challenges in IOT implementation and ride on the wave of connected technology, choose the right implementation partner.

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