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Cost Effectiveness of the Industrial Internet of Things Adoption in the U.S. Manufacturing SMEs

Intelligent and Sustainable Manufacturing. 2024, 1(1), 10008; https://doi.org/10.35534/ism.2024.10008
Fatemeh Ghafari    Ehsan Shourangiz    Chao Wang *   
Bert S. Turner Department of Construction Management, Louisiana State University, Baton Rouge, LA 70803, USA
*
Authors to whom correspondence should be addressed.

Received: 01 Mar 2024    Accepted: 26 Mar 2024    Published: 01 Apr 2024   

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Abstract

This research paper explores the financial adoption challenges of the Industrial Internet of Things (IIoT) in industry. Previous studies have mainly concentrated on designing affordable IIoT devices, reducing operational costs, and creating conceptual frameworks to assess the financial impact of IIoT adoption. The objective of this paper is to investigate whether IIoT adoption’s financial benefits outweigh the initial costs in small and medium-sized enterprises (SMEs). The data from the Industrial Assessment Centers (IAC) database were analyzed, focusing on 62 U.S. manufacturing SMEs across 10 states and 25 Standard Industrial Classifications (SICs), evaluating projected IIoT implementation costs and anticipated cost savings. Results from the analyses reveal that statistically, the difference between implementation costs and savings is significant at a 95% confidence level. Practically, this indicates that SMEs, despite facing high initial costs, can expect these investments to be counterbalanced by substantial savings. From an engineering perspective, this finding raises awareness among SMEs that, beyond overcoming financial barriers, IIoT technologies serve as a strategic enhancement to operational efficiency and competitive positioning. This study acknowledges the limitations including reliance on estimated projections and a narrow industry focus. Future research should broaden the sample and explore the lifecycle costs of IIoT.

Keywords

Industrial internet of things; Industrial energy efficiency; Small and medium sized manufacturing

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