The Internet of Things (IoT) is taking the world by storm. It has the potential to shake up multiple industries and create new, more efficient processes. On a municipal level, it can increase the overall safety of the general population and improve the integrity of structures.
On a personal note, the IoT can save you money by automatically lowering your thermostat when you aren't at home. In the healthcare industry, it can closely monitor patient health and wellbeing. Are you intrigued, even amazed? One concept can realistically affect almost every industry, especially your supply chain.
Explain the Internet of Things to Me
It's our pleasure! The concept of the IoT revolves around increasing machine to machine communication. It involves networks of sensors that gather data and is built on cloud computing. These sensors are placed on machines, inventory, trucks—you name it. They then transmit specific data back to employees in real time.
To make all this effort worthwhile, the data needs to be interpreted. That's where cloud computing apps come in. These are what allow employees to access the information from just about anywhere. Its instantaneous connection to almost everything and its mobility makes the IoT quite handy.
The technological implications of the IoT are significant and many business leaders are racing to learn more. Gartner, an international research firm, estimated that "by the end of last year, there were 3.8 billion connected things out there—smart cars, smoke detectors, door locks, industrial robots, streetlights, heart monitors, trains, wind turbines, even tennis racquets and toasters." This number will only increase. By 2020, Gartner estimates there will be 25 billion of these smart devices, transmitting tiny amounts of data. Other industry leaders have begun to speculate the impact of the IoT, stating these smart things will act as a catalyst for a fourth industrial revolution. It seems like everything will get a whole lot smarter.
How can the IoT Affect my Supply Chain?
What the IoT will do is give you tons and tons of data. This information will be particularly useful for a variety of reasons:
1. It will assist you with risk management. Risk management is important for every company. If some product can prevent a catastrophe or you losing money, why wouldn't you look into it? As we mentioned above, sensors can be put on practically everything—even on things that deliver your product such as pipelines or power lines. These sensors have the ability to detect and isolate maintenance problems. Additionally, they can also anticipate trees which are about to come down and take out a transmission or distribution powerline. Thus, the IoT allows you to be proactive when it comes to your supply chain instead of reactive. In the case of pipelines, sensitive fibers can be placed directly in the pipes to sense leaks and send for help if needed. Imagine how useful that would be!
2. It will reduce waste. Sensors can be placed on inventory that would help determine delivery times. If your product (or parts of it) come from overseas, you need to send a truck to pick it up. Instead of waiting for hours for the ship to come in, you'd be able to interpret that transmitted data and send a truck closer to the ship's arrival time. You'd be wasting fewer working hours sitting around waiting.
3. It will reduce cost and machine downtime. When sensors are placed on machines, they can easily alert supervisors or managers to potential problems, bottlenecking, or possible maintenance issues. Accenture, a leading global professional services company, reported that "the IoT can trim average repair costs by 12%, maintenance by 30%, and downtime by as much as 70%." These savings allow for the production of more product. By installing smart energy management systems, companies can also reduce the amount of their electrical bill. The management system can help your plant avoid peak electricity prices by becoming attuned with machine work schedules.
Related: Reducing Supply Chain Costs
The IoT is an amazing, industry-altering concept that can be beneficial to your business and supply chain. By gathering and transmitting data, you can prevent money loss, avoid risk, reduce waste, and produce more. Ultimately, you can improve your supply chain all thanks to itty, bitty sensors.
Our webinar on reducing supply chain costs can be viewed here: