Emerging Technologies

The Physical World Is Becoming a Type of Information System

From McKinsey’s Internet of Things and the Future of Manufacturing

In what’s called the Internet of Things,1 the physical world is becoming a type of information system—through sensors and actuators embedded in physical objects and linked through wired and wireless networks via the Internet Protocol.

In manufacturing, the potential for cyber-physical systems to improve productivity in the production process and the supply chain is vast. Consider processes that govern themselves, where smart products can take corrective action to avoid damages and where individual parts are automatically replenished. Such technologies already exist and could drive what some German industry leaders call the fourth industrial revolution—following the steam engine, the conveyor belt, and the first phase of IT and automation technology. What opportunities and challenges lie ahead for manufacturers—and what will it take to win?