By Riti Newa, Research Associate-MIPC

Recently, Mercedes-Benz constructed a truck assembly line for Daimler Trucks, its successful commercial vehicles manufacturer, using the Industry 4.0 concepts of hyperconnectivity and digital technologies. The production lines consisted of a number of sensors, especially light sensor technology in forklifts to facilitate the materials flow. With a 15% improvement in manufacturing efficiency, Mercedes-Benz has decided to extend the concepts of Industry 4.0 to all its production processes of major assemblies. The sensors would be a huge part of this provident implementation by Mercedes-Benz.

The adoption of Industry 4.0 concepts is growing as industries are realizing the potential efficiency and productivity that can be garnered with the applications of Industrial Internet of Things (IIoT). This could result in colossal upsurge for the global sensor market. The sensors in industrial control alone are expected to generate revenue of $4,101.1 million by 2021.

Market Applications of Industry 4.0 and Role of Sensors

The market applications of Industry 4.0 concepts range from factory automation to agile production lines, smart manufacturing to retail inventory control and supply chain.
As the industries are looking for self-optimized and automated manufacturing systems, data collection and analysis at lowest field levels hold the highest priority. This provides lucrative market prospects for sensors as they are the enablers of the IoT concept in the industry.

Industrial Process Control

The industrial control applications segment accounts for the highest market share for sensors at 38.6%. Process control applications in the industry require the close monitoring of variables for level, pressure, temperature, flow, etc. With Internet of Things, sensors enable continuous monitoring and control of the industrial processes. More than 20 different sensors are deployed in the IoT industries for industrial control owing to their remote sensing and monitoring capabilities.

The Sensors 4.0, i.e. smart sensors, allow for data collection and analysis through cloud and IO link interfaces, enabling continuous monitoring and maintaining optimum industrial conditions. Sandvik Coromant, a leading service supplier for metal cutting industries, moved from in-process to in-tool sensors to control its cutting processes throughout. This process control used embedded sensors inside the company’s Silent Tools that enabled monitoring of process parameters such as tool deflection, cutting forces, tool load, and temperature for insight on the machining process. The sensors were adopted with the vision to reduce scrap rates and improve productivity.

The market scope for sensors in process and condition monitoring is huge as industries are shifting toward in-process sensors as a control strategy. Sensors will soon be widely adopted by automotive, aerospace, and manufacturing industries for process control. Process control applications in industries are expected to dominate the sensor market with a compound annual growth rate (CAGR) of 15.8% over the coming years.

Automation and Agile Production Lines

Sensors will have key growth opportunities to leverage IIoT for advanced automation of processes in the manufacturing environment. Automation in production lines is possible only with the sensors that are capable of collecting data and analyzing it for efficient decision making that enables self-optimization. The wireless smart sensors market, worth $502.2 million in 2016, has end users investing in industrial automation as companies are gearing up for the Industry 4.0 revolution.

Factory automation allows for customized product solutions as well as self- optimization of the production lines. Traditional conveyer manufacturers are already incorporating sensors and radio frequency identification (RFID) to enable new features and capabilities. Mitsubishi has decided to invest more than ¥30 billion to boost its factory automation system. The leading industries are vying to gain maximum advantages from automation through Industry 4.0, which delivers ample prospects for the sensors market.

Digitalized Supply Chain and Logistics

Sensors lie in the forefront of the supply chain market to leverage the IoT capabilities, with 44% of supply chain organizations already using them. Sensors in the logistics market are currently recording a CAGR of 15.9% owing to their improved asset tracking and remote monitoring abilities. Temperature sensors, proximity sensors, vibration sensors, RFID tags, etc. ensure the monitoring and transparency of assets in all levels of the supply chain.

Nokia has already applied a Conscious Supply Network concept at factories to leverage digitalization across its supply chains. This won Nokia the Supply Chain Management Award in 2015. The application of Industry 4.0 in supply chains is growing, and adoption rates for sensors in supply chain will predictably rise. Johannes Giloth, Senior Vice President of Global Operations at Nokia, explained the company’s strategies of putting thousands of sensors in the factories to connect manufacturing and logistics assets for ensuring visibility throughout the manufacturing and logistics value chain.

As the industries are moving toward smart manufacturing with Industry 4.0, the need for optimized logistics and efficient supply chain has become an increasing necessity. The adoption of asset tracking solutions by the industries is expected to register high growth in the next five years. The supply chain industry is highly dependent on asset tracking solutions and technologies for optimized supply lines and reduced time to market (TTT), which routes to a high demand for the sensors market.


The major arenas for Industry 4.0 market applications imply a significant growth potential for the sensors market. Sensor deployments in the areas of process control, automated production lines, and digitalized supply chain is slated to increase in the coming years. Sensor technology leverages fully enabled connectivity and data sharing and integration with logistics, and hence the sensor market will experience high adoption rates in Industry 4.0 market applications in next five years.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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