Industrial Internet of Things (IIoT)

Smart Business Strategy: Adopting Smart Manufacturing 252

This class explores how smart manufacturing enables new operating models for competitive advantage, improved customer experience, data-enabled revenue opportunities, and other capabilities. Smart strategy leverages Industrial Internet of Things (IIoT) devices like smart sensors along with operational technology such as control and vision systems, and integrates production systems to increase communication and shared data across an enterprise. By enhancing data collection and connectivity through increased interoperability, smart tools allow manufacturers to employ analytics, artificial intelligence, and workflows to improve production processes, product quality, predictive analytics, and continuous optimization.

An understanding of the range of smart manufacturing tools is key for enterprises looking to adopt smart technology. After taking this course, users will understand how different applications of smart manufacturing tools provide competitive advantages for organizations.

  • Difficulty Intermediate

  • Format Online

  • Number of Lessons 11

  • Language English


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Course Outline
  • Introduction to Smart Manufacturing
  • Benefits of Smart Manufacturing
  • Continuous Optimization
  • Predictive Analytics
  • Applications of Continuous Optimization and Predictive Analytics
  • Review: Smart Manufacturing Advantages
  • Smart Servitization
  • Adopting Smart Manufacturing Tools
  • The Smart Manufacturing Workforce
  • Updating a Facility to Become Smart
  • Final Review: Smart Adoption
  • Define smart manufacturing.
  • Describe the benefits and strategic advantages of smart manufacturing.
  • Explain how smart tools enable data-driven continuous optimization.
  • Describe predictive analytics for smart manufacturing.
  • Identify uses of smart technology for continuous optimization and predictive analytics.
  • Describe servitization capabilities enabled by smart manufacturing.
  • Describe how manufacturers can begin adopting smart manufacturing tools.
  • Describe the cultural changes an enterprise must undergo to adopt smart manufacturing.
  • Describe how to update an existing facility's infrastructure to a smart facility.
Vocabulary Term

advanced planning and scheduling

APS. A type of management system that regulates the use of production resources for optimization based on demand. Advanced planning and scheduling software helps organizations optimize the use of raw materials, personnel and time management, and other production resources.


The ability to respond quickly to customer needs and market changes while still controlling costs and quality. Agility in manufacturing may be enabled by predictive analytics.


Artificial intelligence. A computer program with algorithms that enable a machine or computer to imitate intelligent human behavior. AI allows machines to perform a process with autonomy.


A logical and mathematical expression that models a process or action. Algorithms are coded into a computer program that forms the rules by which a machine learning model will process data inputs and produce outputs.

application programming interface

API. A set of programmed instructions, standards, and protocols that define how one piece of software interacts with another. Application programming interface software can be used to enable greater interoperability between devices in a smart manufacturing infrastructure.

artificial intelligence

AI. A computer program with algorithms that enable a machine or computer to imitate intelligent human behavior. Artificial intelligence allows machines to perform a process with autonomy.

assembly line

A production process in which products are mass-produced in stages. Assembly lines are a linear method of manufacturing in which the object being produced passes through different workstations until it is complete.


The application of technology and digital tools to improve the effectiveness of a process. Augmentation enhances the capabilities of manufacturing personnel.

augmented reality

AR. A technology that superimposes a computer-generated image on a view of the real world. Augmented reality methods may be used during product design to allow remotely located designers to view a product model.

augmented worker

An operator, technician, or other employee empowered by information technology (IT) and operational technology(OT). The augmented worker has improved effectiveness and enhanced capabilities enabled by smart manufacturing tools.


A point of congestion during the production process. Bottlenecks limit the flow of production and can be easily identified with machine learning models.


Clean Energy Smart Manufacturing Innovation Institute. A non-profit organization funded by the United States government that promotes the development and adoption of smart manufacturing solutions. CESMII was established in 2017 and is funded by the United States Department of Energy.

change management

The management of required updates and adjustments needed for a change in a process or protocol. Successful change management allows stakeholders to access the most current detailed information on recent changes and their impact on operations.

cloud computing

A combination of hardware and software computing technology typically provided by a third party that allows clients to access, store, and process data remotely through an internet connection. Servers used in cloud computing can provide multiple clients with access to unlimited storage and processing capabilities.

competitive advantage

A benefit, such as high quality or fast production, that an organization can provide more effectively than competing organizations in the same industry. Organizations often achieve competitive advantage by leveraging areas of strength within their operations.

continuous optimization

The practice of constantly measuring the effectiveness of processes and striving to meet more difficult objectives to satisfy customers. Continuous optimization is driven by the collection and analysis of data.

data communication protocols

A digital communication standard that allows computing devices to communicate and interact with one another. Different devices may be programmed to communicate using different protocols.


Similar types of information collected into a single asset, or unit. Datasets are used by manufacturers to organize the information they collect.

decision tree

A binary classification method in which data is divided based on whether conditions for the data are either true or false. Decision trees can reveal trends in labeled datasets.


An imperfection in a part that prevents it from operating correctly. Defects can lead to reworked or scrapped parts, which increases the cost of a manufacturing operation.

digital supply chain

A web-based network of computers, companies, and systems that exchange resources, such as materials and information, to deliver products to customers. A digital supply chain connects suppliers and stakeholders throughout the entire product lifecycle.

digital thread

An integrated view of all the data and information about a machine or process throughout its lifecycle. The digital thread connects information from all aspects of a product into one seamless network.

digital twins

A synchronized virtual representation of a physical asset or part. Digital twins evolve with the asset throughout the product lifecycle.

edge computing

The practice of storing and processing data on multiple local devices at or near the data source. Edge computing distributes processing tasks across multiple edge devices to improve processing speeds.


The final customer for whom a product or service is intended. End users can benefit from machine learning models aimed at improving service and predictive maintenance.

enterprise resource planning

ERP. A specific application of a management information system that takes the data from internal and external information systems and integrates it throughout the organization. Enterprise resource planning is often integrated into product lifecycle management for cyber-physical manufacturing via the digital thread.


Enterprise resource planning. A specific application of a management information system that takes the data from internal and external information systems and integrates it throughout the organization. ERP is often integrated into product lifecycle management for cyber-physical manufacturing via the digital thread.


A software tool that records and stores various types of data related to a particular process. Historian software is often used with SCADA systems to collect data created by operational technology devices.

human-machine interface

HMI. A peripheral device connected to a PLC that allows an operator to monitor a program and interact with a PLC. A human-machine interface may have a graphical or textual display.


Industrial Internet of Things. A network of physical devices used in manufacturing that contain embedded computing systems allowing them to send and receive data. The IIoT allows devices to exchange data and automate processes without any human intervention.

Industrial Internet of Things

IIoT. A network of physical devices used in manufacturing that contain embedded computing systems allowing them to send and receive data. The Industrial Internet of Things allows devices to exchange data and automate processes without any human intervention.

information silos

A system or process closed off from the larger group to which it belongs. Information siloes hinder work by preventing information from reaching other parts of the production lifecycle.

information technology

IT. The software tools that organizations use to collect and organize the information necessary for conducting business. Advances in information technology have improved methods of processing data.


The ability of two or more different computing devices to exchange digital information. Enabling interoperability often requires additional computing devices that can translate different types of data.


Capable of exchanging digital information with one or more other devices. Interoperable devices often communicate through an application programming interface (API).


An International Society of Automation standard intended to create a hierarchy for factory automation. ISA-95 created a framework for organizing an entire manufacturing operation.


Repeating actions and steps in processes with slight variations or improvements. Iterative design allows for constant and quick redesigns during initial stages.


Repeating actions and steps in processes in order to apply improvements or changes. Iterative design is an important aspect of smart optimization because it allows for constant and quick changes in the early adoption stages.

key performance indicators

KPI. A measurable value that demonstrates an organization's effectiveness in achieving key objectives. Key performance indicators can be quantitative or qualitative and can be measured using software tools.


Relating to previous technology or processes. Some legacy software may be obsolete, while legacy machines are often still in use.


The entire timeline of an asset, from its design, production, and use to its disposal and replacement. Each stage of a product's lifecycle can be improved by machine learning and artificial intelligence.

local area network

LAN. A type of wired network that enables communication between a group of computing devices in a specific geographic location. Local area networks are commonly used by manufacturers and other organizations to store and exchange digital information across a large facility.

machine learning

ML. The process that enables a digital system to analyze data in order to build predictive models and make decisions autonomously. Machine learning systematically solves problems using highly complex algorithms.

machine learning model

A computing function that uses one or more algorithms to perform specific calculations on data to produce an output. Machine learning models may use supervised, unsupervised, or reinforcement learning methods.


M2M. The transfer of data between machines and the internet without human interaction. Machine-to-machine communication relies on sensors.

manufacturing execution systems

MESs. A software application that monitors and analyzes machine performance data related to processing materials and producing finished products. Manufacturing execution systems, also known as manufacturing operations management systems, can be used to integrate performance data from multiple machines in a product lifecycle execution (PLE) system.


Manufacturing execution system. A software application that monitors and analyzes machine performance data related to processing materials and producing finished products. An MES, also known as a manufacturing operations management system, can be used to integrate performance data from multiple machines in a product lifecycle execution (PLE) system.


Measured variables that are tracked and can be used to detect errors or variation and make improvements. Metrics can include cycle times, inspection data, and other forms of information.


Machine learning. The process that enables a digital system to analyze data in order to build predictive models and make decisions autonomously. ML systematically solves problems using highly complex algorithms.

operational technology

OT. A system comprised of hardware and software that controls industrial operations. Operational technology includes control systems, field devices, PLCs, and SCADA systems.

overall equipment effectiveness

OEE. A measure of how effectively equipment is being used. Overall equipment effectiveness percentage is determined by multiplying the equipment's availability, quality, and performance percentages together.

predictive analytics

The use of data to predict future events. Predictive analytics allows manufacturers to make informed decisions to address things like future supply needs, machine maintenance, and customer demand.

predictive maintenance

A maintenance approach that involves testing and monitoring machines to predict machine failures by using equipment such as sensors and other devices. In predictive maintenance, periodic readings are compared to baseline readings in order to identify problems.

preventative maintenance

A maintenance approach that involves collecting data related to machine operation in order to service a machine before maintenance issues arise. A predictive maintenance approach involves performing maintenance on a scheduled basis and helps prevent unscheduled downtime.

programmable logic controller

PLC. A processor-driven device that uses logic-based software to provide electrical control to machines and processes. Programmable logic controllers are used in industrial automation.

real time

The near-instantaneous interval of time that computers require to process data. Real time is virtually the same as actual time because computers process data nearly immediately.


A set of steps and calculations used to analyze or predict how one or more inputs, or independent variables, impact an output, or dependent variable. Regression algorithms are used in supervised machine learning models.

resource management

The strategic process of organizing, allocating, and tracking production assets. Resource management involves managing production materials, personnel, budgeted funds, and other assets.

scrap rate

The percentage of material not used to create the final part. Scrap rates describe the material removed during machining and also parts that are out of tolerance that cannot be sold or used.


An electronic device that produces a specific response to an electrical signal. Sensors include a wide range of types, such as proximity sensors, vibration sensors, and heat sensors.

service lifecycle management

The ongoing monitoring and preventative maintenance of products based on data collected from product usage. Service lifecycle management requires embedded sensors and the interconnectivity of smart devices in the Industrial Internet of Things.


Supplying services for a product rather than the product itself, for which consumers often pay a subscription price. Servitization can include automated maintenance and repair orders.

smart manufacturing

The information-driven, event-driven, efficient and collaborative orchestration of business, physical and digital processes within plants, factories, and across the entire value chain. Smart manufacturing uses the IIoT to connect devices and operations.

smart manufacturing platforms

A set of digital tools that help manufacturers to collect, distribute and manage data automatically to make informed decisions. Smart manufacturing platforms allow data from machines and sensors to be communicated to the cloud via IIoT technology.


Any person or group that has an interest in an organization. A manufacturer's stakeholders include employees, investors, suppliers, and customers.

Supervisory Control and Data Acquisition

SCADA. A control system architecture used to monitor and control industrial processes. Supervisory Control and Data Acquisition can make supervisory decisions locally or remotely and can control a process in one or more entire facilities.

supply chain

A complex network of companies and suppliers that produce and distribute a product. A supply chain consists of a company, its suppliers, its distributors, and its customers.

supply chain management

The process of planning, implementing, and controlling supply chain activities to achieve maximum customer value and sustain competitive advantage. Supply chain management oversees each area of the supply chain, including development, sourcing, production, and delivery.


The ability to be used or produced without any negative impact on the environment. Sustainability involves the use of green manufacturing processes that are non-polluting, conserve energy and resources, and are economically sound and safe for all.

time series forecasting

An analytical process used to analyze a set of labeled historical data to predict future trends. Time series forecasting is used in supervised machine learning models.


To systematically approach problems in order to solve them quickly and efficiently. Manufacturers can use data collected from machine monitoring to troubleshoot problematic operating conditions.

tunnel oven

A long, heated chamber used for curing a manufactured part. The length of the tunnel oven corresponds with the time required to cure the part.

version control

The task of keeping a system consisting of many versions and configurations well organized. Version control of design files helps to prevent manufacturers from proceeding with the wrong revision of a design.

vision systems

A collection of advanced optical components that collects data and forms an image, which is interpreted by a computer. Vision systems can be used to measure and inspect manufactured parts using the collected image data.


Visual indications of what is happening in a machine or process. Visualization tools provide graphical images tied to the systems controlling and providing data.

wireless local area networks

WLAN. A network that enables wireless communication between devices in a single geographical location. Wireless local area networks are typically established by connecting a wireless access point to a wired internet device.


The series of activities that are necessary to complete a task. Workflows include the sequence of industrial, administrative, or other processes through which a product or work task passes from initiation to completion.