The Internet of Things continues to be all the rage, and perhaps near the top of its hype cycle, with predictions from many pundits of tens of billions of connected things in just a few years.
While acknowledging the element of hype in IoT discussions, there nevertheless appears to be something very real here, with the opportunity to make visible currently invisible areas of the supply chain, and in many cases to create new products and services using IoT.
Supply Chain Digest Says... |
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| In fact, data should be thought of as an asset the same way equipment and inventory is, Marr says. |
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Writer and author Bernard Marr, writing on Forbes.com, says in fact there are five key ways business should consider for possible IoT deployment. These five are as follows:
Improve Decision-Making: "The huge volumes of new data from IoT sensors and devices simply adds to the massive pool of big data we now have in the world and intelligent companies use that data to inform strategic and operational decision making," Marr notes.
This is true at each area of decision-making, from strategic to operational, Marr says. IoT will only add to improvements in what is often referred to as "data-driven" decision-making.
Better Understand Customers: More and more companies are delivering IoT-enabled products which connect them directly to their customers' behaviors and preferences. Examples would include Fitbit knowing much its customers exercise and what there normal sleeping patterns are, Samsung collecting usage data from its smart TVs, or Kone learning how its customers are using the elevators it installs.
Others have cited the ability of IoT to help companies deeply understand how customers actually use their products as perhaps the most important IoT benefit, and that those insights will often be surprising, whether tie product s a major piece of equipment of a simple consumer good.
Marr agrees.
"By aggregating the data, analysts can look for trends and identify new business opportunities," he writes, noting that even companies that don't make IoT devices directly can often gain access to data from others company's devices, such as use of smart phone apps.
Deliver New Customer Value Propositions: One step further from using IoT devices to better understand customers is to make them part of the delivered product or service.
For example, Marr calls out the often cited case of tractor and farm equipment manufacturer John Deere, which uses IoT in many different ways to offer new and innovative products and services to its customers. These range from self-driving tractors to intelligent farming solutions where sensors continuously monitor soil health and crop levels and give famers advice on what fertilizer to use and what crops to plant.
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 Improve and Optimize Operations: Marr says the data generated from IoT devices can also be used to improve the ways companies are run.
Ride sharing giant Uber, for example, uses all the data from its app and smart phones to not only sense demand, but understand traffic conditions and travel times.
"Not only does this real-time data allow the company to adjust its prices based on demand, it also helps manage the supply of drivers," Marr writes. "When drivers see that demand is high, they will head out to offer their driving services to meet the demand while they will stay home when the data tells them demand is low."
In another example, aircraft engine maker Rolls Royce generates half a terabyte of manufacturing data on each individual fan blade it produces, using the data to monitor and improve quality.
Make an Income and Improve the Value of the Business:
"The data and insights our IoT devices generate are often extremely valuable," Marr notes, adding that the most direct way to appreciate this value is by selling the data or insights to others.
For example, Google's Nest service collects real-time energy usage data from consumers and now sells these insights to utility companies or interested parties.
In fact, data should be thought of as an asset the same way equipment and inventory are, Marr says.
"Whether your data assets just bolster the bottom line of your company's worth or you find other entities willing to pay you for access to the data you collect, companies are finding additional value streams because of their data." Marr observes.
SCDigest's View: This is a simple framework with a bit of overlap, but that sad these five areas might be useful to explain the IoT opportunity in the supply chain to executives.
Any reaction to these five ways to consider using IoT? What would you? Let us know your thoughts aththe Feedback button below.
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