IoT investment hoped to lead to leanermanufacturing for SMEs

German SMEs Excited about Smart Manufacturing with IoT

Cloud computing and platform products have made the Internet of Things (IoT) more accessible to small and medium-sized companies (SMEs) worldwide. Germany is picking up pace, too. Increased pressures to innovate and the need to overcome slow IoT development cycles are prompting smaller industrial manufacturers to look for smart manufacturing solutions with IoT.

The reality is that many small and medium-sized companies simply do not have the vast resources, the necessary IT infrastructure, or the technical know-how needed to face the challenges of spreading digitalization. This is where the IoT development platform comes in.

IoT becomes more relevant

A recent study called The Internet of Things in German SMEs has revealed that 79% of the surveyed companies are expressly prioritizing the question of digitalization, intending to take action in the nearest future. The study covers 161 executives from German SMEs in manufacturing, retail, logistics, transportation, and the supply sectors. As a centerpiece in the study, the topic of IoT is regarded as extremely relevant by 94% of the respondents. Even more so, 84% of the respondents report that they are already using IoT in some capacity, with 80% confirming that they plan to expand or enhance their existing IoT infrastructure.

Pressures to innovate have impacted the current investment landscape. The majority of planned SME investments in IoT project implementations aim to improve infrastructures and make room for innovative solutions. Specifically, 82% of the respondents plan to invest in IT security. Another 71% will look into improving connectivity in their organizations. At the same time, 68% of the participants in the survey confirm plans to invest in new IoT applications.

Smart manufacturing with IoT - German SMEs on the topic of IoT
Figure 1. Small and medium-sized companies in Germany on the topic of IoT

Platform products enable lean solutions

IoT projects involve a high level of complexity and diverse know-how. Implementing such projects poses a challenge to SMEs. The lack of existing technical know-how and the need to train staff is only one part of the picture. Added to this is the necessity of an appropriate in-house IT infrastructure and the allocation of adequate resources. Further still, the implementation of IoT projects calls for specific organizational and strategic capabilities that are not readily available in-house. More than half of the participants in the survey admit that they need to turn to external consultancies to introduce IoT solutions in their organizations.

Within this competitive climate, cloud-based solutions using open-source technologies and coming with a built-in infrastructure become increasingly relevant. Cloud platform providers—think of the hyperscalers Amazon Web Services, Microsoft Azure, and Google Cloud—have developed their specific offerings for IoT development.

Data warehousing platforms with big data ingestion capabilities enable SMEs to stream IoT data directly into the platform, perform analytics, and present the results in live reports. Other services such as IoT enablement platforms offer a full Industrial IoT development suite with device management capabilities to set the ground for smart manufacturing with IoT.

SMEs in Germany ready to invest in novelty

SMEs in Germany continue to focus on applications involving sensor data-based monitoring and central control of internal processes and devices. In retrospect, companies report that they are aiming for a practical approach to IoT that solves real-world problems. Increased efficiency and speeding up processes are named as the main driving factors behind the implementation of IoT projects. And all the while, the digital turn comes with a certain vision for high-potential solutions. These not only help companies “grow their digital smarts” but also transform the very way we deal with Things.

The investment goals of German SMEs also reflect this overall trend in seeking novelty, and specifically, exploring complex deployment scenarios. We have an increased interest in new digital services based on IoT sensor data. Some 26% of the respondents express an interest in novel solutions in predictive maintenance. At the same time, 31% are ready to invest in innovative apps and digital assistants.

For more information on this topic, download the open-access document “Das Internet der Dinge im deutschen Mittelstand”. You will find out more about the current state of IoT implementation in Germany and the fields of application.

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