The Internet of Things: the next industrial revolution?

The world is embarking on a new era of manufacturing. It has been referred to by the likes of Siemens and Bosch as “Industry 4.0” and it’s estimated that it could add up to $14.2 trillion to the global economy over the next fifteen years. There are enormous opportunities for manufacturers to take advantage of the emerging “Internet of Things”.

What is the Internet of Things?

The Internet of Things is the concept used to describe networks of interconnected objects or devices. It’s made up of any natural or man-made object that can be assigned an IP address and communicate data over a network. Whilst that might sound limiting (after all, how many things can be assigned an IP address?), it actually applies to a lot more objects than you might think. For example, any machine on your production line, or any component on a car, even its tyres.

Technological advancements in sensors and processors have meant that their size and cost have reduced dramatically. As a result, businesses can now embed them into an ever-growing number of objects in order to collect data, give or receive instructions. Data network technology, such as radio-frequency identification (known as “RFID”), can be used to communicate this data with other objects and devices, providing interconnectivity between an entire network of objects and devices.

Opportunities for manufacturers

There are endless potential uses that manufacturers can make of the Internet of Things. Here are some examples:

Predictive maintenance

By embedding sensors into machines on the production line, or into a finished product that has been sold to a customer, a manufacturer can monitor the health of those objects and identify when maintenance is required. This allows the manufacturer to pre-empt problems and schedule maintenance for a convenient time, reducing both the amount of disruption caused and the cost of the maintenance.

Increased production line efficiency

Machines can communicate with one another, and with their human supervisors, in real time and exchange commands as products make their way down the production line. This will allow a manufacturer to monitor and control operations across a production line with far greater ease, and in some circumstances to change the specification of a product mid-way through the production line without having to stop the operation.

Expansion into the service industry

The ability to collect data from devices after they have been sold to customers opens the door for manufacturers to introduce ongoing services to customers, generating new sources of revenue. For example, as well as utilising predictive maintenance internally, manufacturers can offer this as a service to their customers.

Taleris, a joint venture between Accenture and GE Aviation, uses sensors to monitor aircraft components. The data collected from the aircraft is analysed to identify issues and monitor the components’ health, allowing Taleris to determine when components need repair or replacement. By knowing when maintenance is required, unscheduled maintenance and unexpected delays are reduced. Instead, airlines can schedule the best time and location for maintenance to be carried out and arrange for other aircraft to cover the routes affected, minimising disruption and costs.


Manufacturers may be able to analyse the data that they collect in order to identify potential problems and areas where improvements could be made.  The data collected could also be combined with “big data” (large, complex data sets) from third parties, creating a bigger picture which, when analysed, could reveal useful information about a particular customer or product by identifying trends and making predictions about future behaviour or outcomes.

Michelin have begun to offer “tyres as a service” by collecting data on fuel consumption, tyre pressure, temperature, speed and location from sensors embedded into the sidewall of their tyres. The data is analysed by fuel experts who then make recommendations to fleet managers to help them to save fuel.

The legal considerations

The opportunities presented by the Industrial Internet of Things are tremendous, however, there are legal and regulatory issues that need to be considered when you look to adopt the Internet of Things into your business.

  • The use of software and analytics will create a need for partnerships between manufacturers, software developers and analytics companies tasked with making sense of the data that is collected.  It will be crucial for these relationships to be governed by a legal agreement that defines each party’s roles and responsibilities.
  • It will be important to protect the confidentiality of the data collected, as this will be a valuable asset to the business. Appropriate confidentiality provisions will need to be included in any agreements with third parties.
  • If any ‘personal data’ (broadly speaking, data that relates to a living individual) is collected, the requirements of data protection legislation will need to be considered. This legislation governs when you can collect personal data and what you can do with it. The consequences of failing to comply can be severe.
  • By connecting objects to a network, manufacturers must be careful to ensure that the data that they collect, and the objects themselves, are secure from third party access or interference. If manufacturers fail to take security seriously, they risk cyber attacks, data thefts and potentially even loss of life from sabotaged equipment.

If you would like to discuss any issues relating to this article, please contact a member of our expert Advanced Manufacturing and Engineering team.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.