The Benefits of Smart Manufacturing for Small to Midsize Manufacturers

The benefits of smart manufacturing for small to mid-size manufacturing companies

Rising operating costs, supply chain, and labor shortages are squeezing manufacturers’ margins, creating new challenges that Smart Manufacturing is helping small to midsize manufacturing companies solve. Getting in control of spiraling inflation costs is the top concern of 40% of small and midsize manufacturers based on the latest U.S. Department of Commerce Small Business Index for Q2, 2022. Supply chain issues are the second-most common challenge, according to the Index. Labor shortages are why nearly 45% of manufacturing executives have passed up new revenue opportunities.

Using Real-Time Data To Control Costs and Solve Supplier & Labor Shortages

Smart manufacturing relies on real-time data to control costs, improve supply chains and help reduce labor shortages. Small and midsize manufacturers are also using real-time data to identify how they can improve production efficiency, achieve greater visibility and control across shop floors, keep quality on track, manage supply chains, and more. Combining IoT sensors into real-time production monitoring gives manufacturers the information they need to reduce the costs of poor quality, prolong machinery life, prevent downtime, and improve supply chain traceability. It is also helping to keep production schedules on track despite limited resources and an ongoing labor shortage.

Continuous process improvement is table stakes for maintaining a competitive edge. Combining IoT and real-time monitoring also provides manufacturers the immediate feedback to identify and close production and process gaps that increase costs. Knowing machine utilization levels, scrap rates, and downtime reporting by machine also helps identify the gaps that hold back more significant process improvements.

How Smart Manufacturing is Delivering Benefits

Reducing the impact of labor shortages on production starts with knowing how to get more done with existing resources. IoT sensors integrated into real-time production monitoring are helping identify how best to allocate limited resources and still meet customer delivery dates.

They are also used to reduce waste, control costs, and improve quality. The goal is to identify the root causes of waste, scrap, increased costs, and inconsistent quality while increasing efficiency and speed. Combining IoT sensors with real-time production and process monitoring provides the data needed to accomplish those goals. As a result, small and midsize manufacturers are achieving the following benefits from smart manufacturing:

  • Improve workforce productivity while learning to do more with existing resources. Real-time data interpreted by a smart manufacturing system can optimize production schedules based on each job’s material, labor, and equipment requirements. Manufacturers can immediately see the trade-offs needed to do more with existing limited resources. For example, analyzing real-time data using a smart manufacturing system can quickly identify which processes are the most time-consuming, prone to errors, and need improvement. It’s also possible to see where short-supply materials can best be used in production to fulfill orders.
  • Greater visibility and cost control of every job on the shop floor. Real-time production monitoring tracks every job, from scheduling through production to customer shipment. Getting immediate data on production parameters, including total parts created, production time, downtime, rejects, parts remaining to be produced, and cavitation changes, all help keep manufacturing operations running smoothly. It’s possible to use real-time production monitoring data to track favorable and unfavorable standard cost variances, which is invaluable for keeping every production run under budget.
  • Identify new approaches to improving product quality and production yields. For example, our customer, a leading medical tubing and connection solutions manufacturer, replaced their manual approach to managing quality with a real-time production monitoring system integrated into their ERP system. Based on the real-time data insights, they reduced their reject rates from 30 to 2%.
  • Discover the root cause of production waste other systems couldn’t find. Building smart manufacturing on real-time production monitoring data delivers production efficiency and troubleshooting insights no other manufacturing system can. Real-time production monitoring can identify the root cause of production waste by tracking production cycles, scrap, if all production steps have been executed and how different raw materials impact machinery yield rates.
  • Prolong the useful life of all machines on the shop floor. Real-time production monitoring systems count production cycles and can identify which products and sequence of tasks most and least impact machine performance and wear. In addition, process monitoring tracks temperatures, pressures, weights and measures, and event durations. Tracking machine utilization, scrap, and downtime helps identify poor machine performance before it becomes a problem. Finally, analyzing machinery performance data provides insights into how each machine’s Maintenance, Repair, and Overhaul (MRO) plan can be successful.


The benefits of smart manufacturing begin with real-time data. The goal is to identify and reduce the barriers that get in the way of increasing production efficiency with limited resources, increasing speed, and keeping the costs of quality under control. Real-time production and process monitoring provide small and midsize manufacturers insights to face the challenges of escalating costs, ongoing labor shortages, and uncertain supply chains.

Download the IoT Glossary