Date: January 22, 2025

Smart Manufacturing: Integration of the Industrial Internet of Things (IIoT) with ERP Systems to Fully Automate Production

Modern manufacturing is changing faster than ever before. Companies around the world are discovering that combining intelligent technologies such as the Industrial Internet of Things (IIoT) with advanced ERP systems is more than just production automation – it is a strategic tool for industrial transformation. In the era of Industry 4.0, this combination allows not only to increase efficiency, but also to make accurate business decisions on an ongoing basis. Integrating IIoT with ERP systems creates new opportunities for optimizing production processes and supports dynamic, future- oriented management.%nbsp

What Is the Industrial Internet of Things?

The Industrial Internet of Things (IIoT) is a network of connected devices that cooperate in real time, exchanging data between machines, systems and people. Using sensors and advanced communication technologies, IIoT enables performance monitoring, resource management and optimization of production processes.

In the context of production automation, IIoT plays a key role. An example of its application is monitoring the condition of machines and predicting failures by analyzing data from sensors. This approach, known as predictive maintenance, minimizes downtime and allows companies to increase efficiency.

The Industrial Internet of Things is also the basis for the concept of smart manufacturing, where production processes – thanks to production automation and production robotization – are dynamically adapted in real time to changing needs, which allows generating significant savings for enterprises.

Thevalue of the global Industrial Internet of Things market in 2024 was estimated at $194.4 billion and is expected to increase to $286.3 billion by 2029.

The Role of ERP Systems in Production Automation

ERP (Enterprise Resource Planning) systems are a central element of managing a modern manufacturing enterprise. Combining resource management, production planning, logistics, sales and finance functions in one comprehensive tool, ERP provides full insight into the activities undertaken in the company.

In the context of smart manufacturing (Industry 4.0), ERP systems serve as integration platforms that collect data from various sources – from production machines to information on inventory status. This allows for making more informed business decisions.

When it comes to production automation, ERP systems enable data management, production planning and performance monitoring, among other things. They allow collecting and analyzing data from various company departments, optimizing production schedules based on available resources and demand, tracking production progress and identifying areas for improvement.

The value of the global ERP market in 2024 was estimated at $81.15 billion. By 2032, it is expected to reach approximately $229.79 billion.

Automation 4.0: Benefits of Full Production Automation through IIoT Integration with ERP

Integration of the Industrial Internet of Things with ERP systems is based on secure data flow between production machines and central management systems. Achieving this requires the use of communication technologies such as MQTT or OPC UA protocols, which enable real-time data exchange. In the case of automation and robotization of production processes, the integration of Industrial IoT & ERP enables, among others, the following:

  • Real-Time Production Monitoring – data collected from IIoT devices is sent to ERP systems, which visualize the production status live. Thanks to this, it is possible to react quickly to changing conditions.
  • Machines and Devices Condition Monitoring – sensors collect data on temperature, vibrations, energy consumption and other parameters, which are sent to the ERP system. Thanks to this, it is possible to detect potential failures early and plan maintenance work, as well as optimize costs and minimize losses.
  • Supply Chain Optimization – the ERP system can automatically generate material orders when stocks fall below a certain level. Integration with IIoT also enables real-time tracking of deliveries and optimization of transport routes.
  • Production Personalization – data collected by integrated IIoT and ERP systems can be used to create products tailored to individual customer needs, without the need to implement costly changes to production lines.
  • Increasing Production Flexibility – integrated IIoT and ERP systems enable quick response to changing market requirements.
  • Demand Forecasting – based on the analysis of historical data, it is possible to predict future demand for products and plan production accordingly.
  • More Informed Decision-Making – collecting reliable data in real time allows for making decisions based on current information, as well as identifying trends.

    Combining IIoT with ERP enables the creation of smart factories of Industry 4.0, not only supporting the automation and robotization of production processes, but also generating a number of strategic benefits – from increasing production efficiency by accelerating the pace of production while maintaining the highest quality of products, to reducing operating costs by reducing the risk of errors and reducing the costs associated with downtime and machine failures.

    Seamless Production Automation with Smart IoT Gateways Integrated with ERP Systems

    Integrating the Industrial Internet of Things with ERP systems for full production automation requires companies to be properly prepared. One of the challenges may be connecting different systems, including new software with existing infrastructure that must be adapted to new standards. Fortunately, there are ready-made solutions on the market, such as IoT Gateway, that eliminate this problem.

    For example, SIMATIC IOT2050, a smart IoT gateway designed by Siemens, which integrates data from machines and systems in production plants. The device collects, processes, harmonizes and stores data from sensors and machines on site, sending it to local or cloud systems, such as ERP. Thanks to easy installation in the existing infrastructure, it enables full automation and real-time analysis, increasing efficiency and integration within Industry 4.0.

    It enables the collection of data from various sources in the factory, such as machines or control systems and their further processing in real time. SIMATIC IOT2050 uses advanced solutions that allow companies to optimize production processes, monitor the condition of devices and implement improvements based on reliable information.

    A major advantage of the Siemens IoT smart gateway is its integration with ERP systems, which allows for automatic transmission of production data directly to specific enterprise management modules. This allows, for example, for dynamic adjustment of production schedules in response to changes in demand or identification of potential problems, such as lack of raw materials or overloaded production lines.

    Full Automation of the Labeling Process in a Frozen Food Company with IIoT and ERP Synergy

    The Swiss FMCG company Louis Ditzler AG, which produces frozen fruit and vegetables, faced the challenge of maintaining the high quality of its products and constant access to production data. For this reason, the company needed a platform that would help digitize the entire production, as well as integrate different generations of machines in a standardized way to ensure their reliability and safety.

    They decided to cooperate with Comarch, which identified areas requiring modernization and optimization, such as: maintaining a high level of the OEE indicator (Overall Equipment Effectiveness), monitoring production in order to obtain reliable data from production lines in real time and integrating label printers with the ERP system. A comprehensive solution consisting of Comarch hardware and software was implemented, including ERP CEE, BI Point, MES Industry 4.0, IoT Hub and IoT Platform.

    The whole process begins when the raw material arrives at the production line equipped with dashboards and Ishida checkweighers, the origin of which is tracked thanks to information from the ERP system. IoT gateway devices are used to collect data – special hubs in waterproof enclosures. The checkweigher verifies the weight of the packages filled with the product, as well as the presence of metal within them.

    By connecting to IoT Hub, it is possible to send the collected information to the IoT platform and then to the MES Industry 4.0 application. The application enables checking which packaging complies with the standard and which does not. The data is then transferred to BI Point, which is responsible for their precise analysis.

    Integration of the ERP system with NiceLabel label printing software allowed Louis Ditzler AG to fully automate the labeling process. Currently, based on the gathered information, labels are generated and printed on the appropriate product.

    To sum up, IIoT integration with ERP enables the connection of physical devices and sensors with a digital system, creating a smart business ecosystem. As a result, data does not have to be manually entered and there is no risk of being duplicated, and its updating is done automatically. Information is consistent for the entire enterprise and provided in real time, which effectively supports full automation of production and other processes.

    If you want to learn more about the concept of smart manufacturing, Industry 4.0, Automation 4.0, Industrial Internet of Things and the resulting business opportunities for your company, schedule a free consultation with Marcin Jabłonowski – Managing Director and AI Solutions Architect at Pragmile.  

Schedule a free consultation with
our AI and technology experts

Take advantage of the latest AI solutions, tailored to your company's needs. Book a consultation with AI solution architects at Pragmile and discover new opportunities in energy management.

Please, provide your business email to schedule a meeting