IoT and the Modern Shop Floor: Prioritizing Flexibility in a Shifting World
In modern manufacturing, the only constant is change.
MCA Connect Expert:
Director of Technology Innovation
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Remember the early days of the COVID-19 pandemic? When manufacturers across the globe were caught flat-footed?
Well, the reality is that COVID wasn’t the last (or first) large-scale disruption we’ll need to contend with. In modern manufacturing, changes are a certainty, whether that comes down to tariffs, supply chain issues, or demand swings.
And no doubt the stakes are high. Downtime can cost millions, and rigid systems simply won’t survive disruption.
For modern manufacturers, flexibility is the only path forward. Tools like the Internet of Things (IoT), artificial intelligence (AI), and smart, cutting-edge platforms won’t just optimize your operations — they’ll make them future-ready.
But how do you get started?
Over time (and through plenty of real-world experience), I’ve learned the key to minimizing downtime, improving agility, and ultimately staying ahead of the curve lies in your foundation, strategy, and tech stack.
Build a Foundation with IoT
At the heart of the modern shop floor is connectivity and automation
Here’s a quick reminder:
The Internet of Things
The Internet of Things, or IoT, is a network of physical objects — think: machines, tools, and sensors — connected via the internet. Connected “things” can share data and receive commands remotely.
Essentially, IoT enables machines to communicate in real time, sending signals that can be monitored and analyzed for operational efficiency.
Complete digital transformation projects can take years, but IoT drives quick, effective insights while the bigger plan is underway.
IoT enterprise spending slowed in 2024.
That means, if you manage to invest quickly, you could have a huge advantage over many competitors.
Hone Your Strategy
Once the heart of your factory of the future (an IoT-enabled shop floor) is complete, ensure your strategy allows for max flexibility.
Cut Costs
Many manufacturers recently lost the competitive advantage of cheaper items via overseas production. If you’re in this boat, the question becomes: how will you respond?
Some manufacturers have admitted to using tariffs as an excuse to raise prices across the board, increasing their margins opportunistically. Can’t say I recommend this.
We’ve also seen some clients shifting operations closer to home in recent months. Bloomberg has 80% of surveyed manufacturers considering bringing some operations back to the US.
If you see yourself reflected in that figure, just keep in mind that manufacturing in the States is a completely different ballgame.
In China, you can throw bodies at problems — simply add another operator, and another, to manage every single stage of the process. This only works when labor is inexpensive.
In the US, it’s cost-prohibitive to staff plants in the same way, so automation will need to pick up the slack. Smart shop floor machines make more sense than a team of three operators.
For some businesses, this just isn’t feasible. They might simply choose to leave China for Vietnam, Thailand, or Mexico, trimming down on expenses whenever possible.
Others are taking a joint approach, essentially keeping materials assembled overseas and waiting to bring them over until the “storm” has passed and they can release the floodgates.
While I’d caution against blindly raising prices, if well-planned, the other strategies can be sound.
But I’d take it a step further. My suggestion would be to tack on an often-underutilized technique: SKU rationalization.
Because nobody has time for another internet search:
The Internet of Things
SKU rationalization is the process of analyzing product performance and removing low- or non-performing items.
Some manufacturers carry an overwhelming number of SKUs, and the reality is that not every product is worth fighting for. Some products are not worth sourcing in a different way to avoid tariffs because they have low margin, low volume, or overlap with another offering.
Develop (or, for bonus points, automate) answers to the following questions:
Which SKUs are performing best?
Which SKUs are underperforming?
Which SKUs are redundant and could be consolidated?
Then, make the hard choices.
This will not only simplify operations but could free up valuable resources, from production capacity to warehouse space.
So, you can focus on high-margin products, reduce costs, and take another step toward optimization.
Scale Up Software
With an IoT-enabled shop floor and a data-informed strategy, manufacturers can layer in additional tech and data tools to maximize flexibility.
Hone Your Predictive Maintenance Approach
Imagine your car breaks down en route to an important meeting without warning. You call up a mechanic, and they say they’ll have the replacement part ready next week. In other words, you’re out of luck for the short term (and you’re probably finding a new mechanic).
This doesn’t have to be your operation’s reality.
By layering AI on top of your IoT-enabled shop floor, you can identify maintenance needs before issues arise. These technologies collect data from sensors embedded in machinery and analyze it in real time to detect subtle signs of wear, stress, or anomalies that may not be visible to the human eye.
They then predict when a part may fail, so maintenance can be scheduled during planned downtime rather than during peak production. Think of it as the equivalent of a highly sophisticated “check engine” light for your machinery.
As a result, you could cut down on costly surprises, keep production lines running smoothly, and ultimately ensure that timelines are met.
But keep in mind that predictive maintenance only works when data flows freely. Siloed systems can’t deliver the visibility required for informed, real-time decisions. You’ll need to completely break down data barriers to truly capitalize on predictive technology.
Plan Ahead of Supply Chain Disruptions
Whether dealing with a trade war or a natural disaster, you must be able to adjust to changes in the supply chain quickly. That might include getting supply agreements for set amounts of material or asking for specific material and keeping close tabs.
The right tech can help.
For example, MCA Connect Inspire Platform offers manufacturers valuable, real-time supplier insights that can dramatically improve sourcing decisions.
Inspire flags underperforming suppliers, helps identify risks like sole-sourced components, and enables smart material planning.
Real-world users are leveraging this tool to pre-arrange supply agreements, delay shipments until needed, and even pay nominal fees to hold materials offshore.
This insight into the supply chain is critical when it comes to managing costs and navigating global uncertainty without overcommitting or overstocking.
Factor in Demand
People used to like minivans. Now they like SUVs. Even if you’re not in automotive manufacturing, you need to be able to identify shifting trends and adapt.
That’s where one of my favorite comprehensive demand-planning tools comes into play.
Demand Genius uses advanced AI and machine learning to analyze historical data, sales patterns, seasonality, and other key market transformations. It then develops models for predicting your operation’s demand accordingly.
Each month, new models compete with each other and against the current version. Only the top performer becomes the new “champion,” consistently providing you with the most accurate data for effective demand forecasting.
With Demand Genius, high-tech manufacturers can seamlessly identify changing preferences or external factors and align production accordingly.
With just a little tech support, you’ll be even faster than those breakneck market shifts.
Revolutionize Fulfilment and Dispatch
Many modern manufacturers receive hundreds of orders a day, some highly unique, complex, and even completely custom. When paired with increased costs and large-scale disruptions, this could be a recipe for disaster.
The answer? Fixed-Interval Scheduling.
Fixed Interval Scheduling (FIS) is a production planning tool that enables manufacturers to revolutionize their material, labor, and machine utilization by allowing windows of scheduling in hours instead of days. It optimizes these activities automatically, freeing up your time and capacity.
Plus, it only plans what can actually be built, leading to cost savings, more reliable delivery times, and better customer satisfaction overall.
Ultimately, it allows for leaner, smarter manufacturing, which can make all the difference in challenging markets.
Future-Proofing Your Shop Floor
The only constant is change, and manufacturers cannot afford to be caught in the wilderness with a broken engine again.
Forward-thinking tools like the IoT and AI are key to building resilience and efficiency in your operations. As the industry continues to evolve — and it will — acting now can help you meet both the challenges and opportunities on the horizon.
Learn how MCA Connect is helping manufacturers build factories of the future: efficient, flexible, resilient, and ultimately ready for whatever comes next.
AUTHOR
Director of Technology Innovation at MCA Connect
Dag Calafell is the Director of Technology Innovation at MCA Connect, a 15x Microsoft Partner of the Year. With over 16 years in the IT industry, Dag is passionate about helping businesses overcome manufacturing and supply chain challenges and applying technology to deliver the best value for customers and employees. Dag specializes in business analysis and process improvement and is an expert in Microsoft Dynamics 365, Data/AI, and Azure technologies.