Smart manufacturing: role of Internet of Things in process optimization

This research is primarily focused on process optimization in manufacturing field in business-to-business context. The study is an effort to point out the issues manufacturers face at their shop floor and it provides solutions for dealing with those issues. During the last decade the Internet of Things (IoT) has gained a lot of attention from both academia and practitioners. IoT emphasizes on the importance of physical objects transferring information by using both software and the Internet. Based on the global trends, nowadays, there is a clear requirement for companies to focus on how they can implement IoT in order to facilitate their businesses and create new business and market opportunities. IoT is able to connect various things and objects around us which are able to interact with each other. In other words, IoT technologies not only connect a particular industrial system or supply chain, but also connects stakeholders and end-customers. The goal of the thesis is to discuss IoT technologies and elaborate on how they are implemented in manufacturing processes. One empirical case study on IoT applications in shop floors and production lines carried out. Two cases were selected based on being a pioneer in implementing IoT technologies into manufacturing and highly optimized production at targeted factories. The cases represent next generation of smart factories which IoT technologies and in particular RFID solutions play an important role. A qualitative document analysis was conducted. The topic of this research is relatively new and therefore majority of references used for this paper are from 2014 onwards. Data were collected from public, non-confidential information sources including press releases, newspapers, articles and journals. The research approach was primarily descriptive with the focus on differences between previous production optimization technologies and IoT applications in use today. The results of thesis demonstrates that IoT technologies bring transparency, traceability, adaptability, scalability and flexibility to the system. Therefore, the adoption of IoT has quite a few potential benefits, including improvement in cost and risk reduction, operational processes and value creation. This research also shows that using IoT technologies for their benefits is not an easy task for enterprises. Companies face many challenges on the way including layout changes in the factory’s shop floor, changes in the design of the products, security concerns and consumer privacy. Moreover, since the IoT is a recent development, different aspects of the IoT such as economical, managerial and industrial aspects need to be studied. And this makes companies hesitant to make decisions regarding the adoption of IoT