The Disruptive Potential Of IoT

Mark Morley, Director for Manufacturing at OpenText, looks at how the Internet of Things (IoT) has the potential to become one of the most disruptive technologies to impact digital networks.

Since Cloud, Mobile and Big Data technologies started to go mainstream, individual strategies to support each of these technologies have been evolving and remain separate strategies today.

However the arrival of IoT is changing the strategic agenda very quickly. IoT as a ‘collective & strategic’ term has caught the interest of the enterprise and the consumer alike.

IoT allows companies to effectively define one strategy that potentially embraces elements of cloud, mobile and Big Data. In short, IoT has brought a stronger sense of purpose to cloud, mobile and Big Data.

Intelligent Technologies

Let’s take the supply chain, for example. In the past, it was important for organisations to understand the physical flow of goods based on information that had been manually entered into IT systems.

However, this had the potential to be inaccurate or out of date. Today, the introduction of IoT based technologies has the potential to transform end-to-end visibility across global supply chains. Billions of connected devices associated with global supply chains will transform the amount of information that can track shipments in real time.

Digital information coming from these connected devices will drive increased levels of pervasive shipment visibility and this in turn will allow organisations to move towards more intelligent value chains.

The Dawn Of Devices

The exponential growth of connected devices holds the potential to revolutionise the exchange of digital information across the supply chain. Analyst firm IDC estimates there will be 200 billion connected devices by 2020, and Cisco estimates the market size at $14.4 trillion (£9.6 billion).

IoT has many applications in the supply chain, for example warehouse stock levels can be continually monitored so that stocks can be replenished whenever sensors detect a near out of stock situation.

Alternatively ‘tagged’ goods in a warehouse can help to guide pickers to their exact location using augmented reality technologies such as wearable devices. One German based automotive supplier has created a virtual supply chain based on IoT technologies that is used to replicate the physical movement of goods from one of their plants.

Each shipment has an RFID tag attached to it and these tags can be read not just in the factory but whilst travelling across third party logistics networks to an end destination in real time.

SAP has built a supply chain demonstrator based on a connected vending machine, using their HANA based technology to monitor consumer-buying trends. Not only can the vending machine recognise each consumer, but based on previous purchasing history it can make real time suggestions for next purchases or offer tailored promotions.

The vending machine also monitors its stock levels and can automatically place orders for new stock to be delivered to the vending machine as required.

With a global network of connected vending machines, confectionery manufacturers for example can analyse consumer buying patterns, or trends across different regions around the world and then optimise product mix for each machine based on hyper-local preferences.

The ‘Digital Nervous System’

The key challenge moving forwards is how companies capture and analyse a whole host of critical information from a variety of products, appliances and equipment and then communicate status updates and information as we approach the next phase in the evolution of the internet.

In this next phase of development, wireless and machine-to-machine technologies will help to connect globally dispersed machines and form the digital nervous system of the new world.

To be prepared, organisations across the supply chain need to ensure business networks can support disruptive technologies by synchronising the flow of data and transactions from different types of sensors attached to logistics drones, 3D printers and even wearable technologies. Once a remote device captures information it will need to be transferred to other business systems, such as a cloud based B2B integration platforms or ERP environments.

This automated flow of information into back end enterprise systems will significantly improve the efficiency of tomorrow’s supply chains.

In a global economy, the key challenges faced by organisations of all sizes are working seamlessly with trading partners located anywhere in the world and responding quickly to any form of supply chain disruption.

Moving forwards, the IoT will help to establish intelligent digital networks that potentially minimise disruptions to ordered goods, mitigate instances of downtime and allows companies to scale their supply chains according to economic conditions or consumer demand.

Today’s digital networks are in a state of transformation. The rise of the Internet of Things – now more commonly known at the IoT – has brought a sense of intelligence and awareness to many pieces of the connected device puzzle. Alongside this, the emergence of the connected or digital consumer is leading to demand for greater customisation of products, swift delivery of goods and an experience that is smooth and seamless.

With George Osborne’s recent Budget announcement stating the Government’s backing of IoT projects, participating in a connected economy will start moving up the corporate agenda.

Everything from connected power utilities to connected transport infrastructures and connected industrial equipment will contribute to accelerate the growth of the British economy, and organisations should be prepared to tackle the associated challenges in order to reap the rewards.