It all started with the Industrial Revolution. A few new devices and techniques vastly improved our method of producing sellable goods, dramatically and irreversibly changing the global economy. It wasn’t long before almost every aspect of our lives, from where we lived, to how we got around, to every last product and tool we used, had become completely different.

Well, a humongous shift is once again on the horizon. Due to the recent expansion of the Internet of Things, our factories — and therefore, our lifestyles — are set to change once again.

This second revolution, so to speak, is called “Smart Manufacturing“, and it’s already bringing huge success to the European continent. Germany is currently leading the charge towards full adoption of this new kind of production, and as soon as the U.S. gets on board, the West will experience a complete paradigm shift in the way it builds products — one that could have huge implications for the global economy.

How it Works

The first thing this shift will entail is an improvement in the manufacturing process. The Internet of Things enables machine-to-machine communication, meaning that pieces of industrial machinery will be collecting and feeding one another data in real time. Those machines will then use that data to find and create efficiencies that any network of human workers would never be able to see. As a result, industrial processes become more time- and cost-efficient than most managers ever assumed was possible.

And these machines do more than just find efficiencies — IoT-enabled objects yield data that can actually be used to improve the products they make, preventing bugs from being replicated. These systems will also let customers track items and glean info about their usage, resulting in improved experiences on both sides of the exchange.

What Needs to Change

Smart manufacturing will lead to some big changes in the business world, and not just inside the factories. For instance, businesses will have to constantly think about how smart objects might affect their value chain, expanding their notion of what technology can do to improve the bottom line. What’s more, IT departments will likely find themselves becoming more valuable to their companies, as their leadership will be considerably expanded by tech’s increasing role in production and related operations.

But despite the tremendous good that smart manufacturing will do, the IoT will also come with some pretty sizable challenges. For example, we don’t yet have the infrastructure to manage, let alone make sense of the gigantic volumes of data these machine networks will produce. Additionally, there’s more research to be done in the realm of interoperability, and standards need to be created to regulate this burgeoning field.

Since we’re no longer dealing with the challenges of pre-industrial America, smart manufacturing won’t have the opportunity to create the first textile production system or eliminate the horse and buggy. But once it’s embraced by American manufacturers, it could have an effect on today’s economy that could be just as dramatic.