What can the the Internet of Things (IoT) do for you and your procurement team?
IoT is a big buzzword these days. From industry experts to academia to specialised thought leaders, everyone is talking about how IoT as a technology has the potential to disrupt not only the day-to-day workings of our companies, but also the lives of the individual.
The Internet of Things: A History
Let’s go back a bit and see how it all began. In 1999, Kevin Ashton, a British technology pioneer and cofounder of the Auto-ID Center at MIT, proposed the Internet of Things (IoT). It refers to gadgets and applications with built-in wireless connectivity that can harness great amounts of data from their surroundings and help monitor, control and organise things better. From home appliances to fitness gadgets to technology helping industries automate their processes, IoT can do it all!
And two decades later, IoT is the live wire. Smart homes, smart gadgets and smart cars- IoT has already given us a glimpse how is future going to be. But what does it hold for procurement?
Procurement and the Internet of Things
For Procurement particularly, IoT works as an enabler, empowering companies to gain visibility into their spend analysis and keep a vigilant eye on their consumers consumption pattern. The supply chain data generated is monitored continuously and analysed for behavioral sets to make better-informed decisions. Having a proactive overview helps companies to estimate the demand and supply statistics, as they are aware of the needs and usage pattern of their consumers. This empowers them to negotiate with supplier side in a more streamlined manner as they know in advance what material and what quality and quantity is required. All these factors combined contributes to cost savings and brings value for the procurement function.
Another area where Procurement can benefit significantly is in the tracking and monitoring of the movement of goods within supply chains. Deploying the right set of sensors, which are tracked remotely with an IoT-enabled device can identify equipment faults, stoppages and leakages in real time allowing service and maintenance teams to respond to issues more promptly and accurately. This also ensures diagnostic data is obtained in order to d
eploy the right set of technicians.
These factors directly impact the maintenance costs incurred by a company, contributing positively to the overall cost savings.
There is more that IoT can bring to the table for Procurement function. But to realise the utmost advantages, companies must ensure that they are investing in the right kind of technology, processes and people. They need to invest in setting up the infrastructure that will unleash the possibilities IoT has to offer. In short they need to be ‘IoT ready’.
If you are curious to learn more about how IoT will impact procurement, do join our upcoming webinar where our expert group of panelists will examine the practical impact of IoT on how our supply chains will work and what you will need to do to become IoT ready.
Jon Hansen – Editor and Lead writer at Procurement Insights
Robert Handfield – Executive Director of the Supply Chain Resource Cooperative
Mark Hubbard – Managing Director at Smart Brown Dog Ltd
Webinar on ‘Getting Internet of Things (IoT) Ready for Procurement’ is on January 18, 2018 | Thursday. Register here for free to reserve your seat.
From connected healthcare to retail and water management, the IoT will revolutionise the way we live. It’s already having some pretty major impacts…
This article was written by Gauri Bapat.
The wave of connectivity had extended beyond phones, laptops, and tablets and is permeating into our daily lives. With an explosion of connected devices in the market and a healthy adoption rate, we can safely assume that we are taking confident strides into the ‘connected life’ made possible by the IoT.
A report by Gartner suggests that by the year 2020, the number of connected devices across technologies will touch 2.6 billion. As we move towards an increasingly automated world, this technology will be used to improve the productivity and quality of life and industries alike. The IoT is poised to grow from a technological phenomenon to one with a more global and social impact…and the cogs are already turning in that direction. Things that we once saw only in sci-fi movies and Steven Spielberg specials are a reality today.
Let’s take a look at how the IoT is already changing the world we live in.
IoT in manufacturing is ushering in the fourth Industrial revolution (Industry 4.0) that aims to make manufacturing smarter. Smart manufacturing involves the use of sensors that are retrofitted on existing manufacturing equipment to improve efficiency and performance. Siemens ‘ PLC manufacturing plant in Amberg, Germany, has implemented the principles of Industry 4.0 and has completely automated the production of their automation systems. Post this implementation, they witnessed a 99.99885 per cent “perfect” production quality rate. Now that’s impressive!
The airline industry has seen massive adoption of the IoT in order to increase operational efficiency and drive the age of ‘connected aviation’. Virgin Atlantic has every single component of its Boeing 787 attached to a wireless airplane network. These incredibly connected airplanes use IoT data to evaluate everything right from the airplane’s performance to issue identification.
So, if a Virgin Atlantic jet reveals low-performance mid-flight, this information is related to the ground staff real-time. Thus, when the flight lands, the airport engineers are ready to solve the problem. Other airlines such as KLM, Qantas, Lufthansa, and Delta are also using IoT to improve aircraft performance, discover new business insights, and maintain greater efficiency.
Airports such as Miami airport, London City airport, Helsinki Airport, amongst otherS, use IoT to track passengers, prevent bottlenecks and queues, offer personalised services to the customers, track assets and also deliver location-based services to the travellers.
One of the areas where IoT has made a tangible difference is in water management. Proper use and management of water have been a problem that many cities across the globe have been battling. IoT has been put to work in cities such as California and Bangalore in India to not only identify the cause of water shortage but also to identify avenues as to how water management can be optimised. The Bangalore Water Supply and Sewage Board (BWSSB) employed an IoT monitor to manage the complex water distribution system by creating an operational dashboard using IoT. They realised that almost 45 per cent of the water supplied by BWSSB is unaccounted. San Francisco employed smart meters to measure water consumption and notify their customers when their water consumption exceeds the specified limit or if, for example, the water is left running continuously for 24 hours.
The retail industry has witnessed a huge adoption of IoT. IoT implementation in retail has been done to not only improve the supply chain or to create more engaging and tailored marketing campaigns, but also to make shopping a more interesting experience. Retailer Rebecca Minkoff created the ‘connected store’ using RIFD tags on each piece of clothing and used smart mirrors in the dressing rooms. The customers could try on the product, and also take a look at other looks, available colors and sizes without even leaving the dressing room!
Target has been using beacons across 50 stores to provide personalised offers and present their customers with hyperlocal content to make shopping more exciting for their shoppers. Ralph Lauren’s Polo Tech apparel, which is a smart workout shirt, monitors vital activities of the user on a real-time basis and enables ongoing health monitoring.
2016 saw us looking towards connected energy solutions to help us save energy. IoT products such as Google Nest, ecobee3 thermostat, the heating system Hive by British Gas have seen huge adoption to track and measure energy consumption. 46 per cent of technology enthusiasts in Germany and 42 per cent in the US already own a connected energy solution and save almost 72 per cent on their monthly utility bills – that amounts to a USD $80 reduction in the monthly bill.
Moving beyond the smart lights of a connected smart home, smart lighting control can generate huge financial savings by controlling street lights. Mayflower CMS successfully employed IoT to control and monitor an excess of 180,000 street lights, bollards and signs in the UK and Ireland with its largest installation in Hampshire that has over 90,000 nodes. The Hampshire City Council has been able to reduce energy consumption by 21GW/hr per annum which is a reduction of 40 per cent and has successfully reduced carbon emissions by approximately 4000 tons per year.
The global IoT healthcare market is expected to touch USD 160 billion by 2020. The last few years healthcare has witnessed wellness sensors to surgical robots to improve efficiencies and better patient outcomes. Ingestible sensors help measure if patients are taking their pills on time and helps medical practitioners manage their patients remotely. Barton Health, a 62-bed health system in rural Lake Tahoe, California, is one of the first users of the ingestible sensor by Proteus Discover, a Digital Medicine to help patients suffering from diseases of the central nervous center such as schizophrenia and place the patient in the driver’s seat regarding their health management with the help of technology.
“When wireless is perfectly applied, the whole earth will be converted to a huge brain, which in fact it is, all things being particles of a real and rhythmic whole. We shall be able to communicate with one another instantly, irrespective of the distance.”– Nikolai Tesla
This famous statement by Nikolai Tesla predicts the invention of the smartphone at a time when the mere thought of such an advanced device was nothing but unimaginable. Take a closer look at the statement and you can see that Tesla foresaw the impact of the Internet of Things (IoT)… a world that becomes so connected that it becomes one ‘huge brain’.
What Tesla spoke of decades ago, we are experiencing today
Gauri Bapat is Director, Strategic Business at Inteliment. This article was orginially published on LinkedIn.
The Internet of Things (IoT) is designed to make our data more useable. What opportunities and concerns does it present within logistics, where it is referred to as Industrial Internet of Things (IIoT) ?
The common thread is the push toward hyper-interoperability, where technology, people and process collaborate to create true visibility, accurate orders, and happy customers.
It is impossible to ignore the pressure on retailers and distribution centre (DC) to re-engineer operations to meet the Omni-channel fulfilment mandate. The evolution of the Internet of Things (IoT), designed to make data more usable, is quickly becoming a reality across global supply chains.
The Industrial lnternet of Things
Definitions of IoT spin around connecting sensors, programmable logic controllers, and RFID data with the internet so that other systems or analytical software can respond to or make sense of the data. An RF gun, voice recognition, and RFID in the warehouse all provide IoT–style sensor data; it is called the “Industrial Internet of Things” (IIoT) to differentiate from consumer applications.
The order management system needs to orchestrate the fulfilment by interacting with inventory allocation, warehouse, management, transportation, and workforce scheduling systems using user-configurable business rule. The overall goal for Omni-channel is to satisfy more consumer demand with acceptable profit margins.
Logistics management in the warehouse
Many opportunities for improvement through smart forklifts, diagnostics of the equipment, speed controls, anti-slip technology, collision detection, fork speed optimisation, promoting new process flows, autonomously trip to a shipping dock for unloading, etc., are some of the applications and possibility a multi-channel system provides for the improvement of the overall process.
Tracking trucks based on RFID, GPS, RF scans, temperature, sensors embedded in the freight -all of these fit the definition of IIoT, the benefits being: improving network-based routing, the use of a smart phone for routing to determine congestion and better alternative routes.
Security is the number one concern around IIoT, working hand in hand with public cloud solutions. It helps to detect Cyber attackers’ techniques quickly and avoid being tricked by them.
This is a hidden key to success. A major application of Omni-channel is a customer ordering a product and the retailer fulfilling the order from within their store network versus a distribution center. This introduces the requirement of advanced information systems to provide awareness of inventory throughout the store network. The omnichannel system would identify the stores with the right inventory and determine the most cost-effective location to fulfill from to provide the promised service level. Retailers challenge is the implementation of new order of management systems, to build a single view of inventory availability – foundation of Omni-channel fulfillment – and to recognize the new consumer’s expectation, the goal being to optimize inventory deployment so that the required inventory is where it should be to satisfy consumer demand at a lower cost.
The first step is for the retailer to understand the Omni-channel strategies and how the customer’ buying patterns have changed (ordering an item online, by a mobile, from a store and picking it later, the item being shipped to the customer’s home, the customer calling to a call centre, etc. A fully-functional technology Omni-channel fulfilment operation has to be integrated according to the various selling systems.
Shipment and Delivery
Omni-channel technology, as the one IIoT provides, plays a vital role in this environment by enabling store employees to efficiently navigate the store floor to find the ordered inventory. Once the item is retrieved, store employees utilize packaging stations to prepare order for shipment and utilize small parcel carriers to pick-up and deliver the orders. Using the same trailers scheduled for normal store delivery, however, separating these pre-ordered items on the trailer is the critical piece in this strategy. Loading these items at the front of the trailer, labeling them with special tags utilizing barcode-scanning technology, and using colored totes are a few ways to flag the inventory.
Returns processing is still an improvement opportunity for many Omni-channel retailers. The goal is to allow a consumer to return purchases to either stores or a central returns facility regardless of where the sale originates.
The top three priorities identified are inventory planning, fulfillment capabilities and returns processing. Retailers have to keep working on the enterprise-wide visibility of available inventory. Inventory must be deployed differently in an Omni-channel world; many retailers are beginning to address that challenge, developing flexible fulfillment capabilities that leverage stores, DCs, and vendors to fulfill consumer demand. However, store fulfillment processes are not as efficient as they are in a DC where conditions are more controlled. Omni- channel is having a profound impact on supply chain organizations-especially logistics across all levels of maturity, being better equipped to embrace Omni-channel from a people, process and technology perspective.
So what new approaches are you applying to your Supply Chain? Let us know in the comments below.