FAQs (Frequently Asked Questions) On Internet of Things (IoT) in Supply Chain Management
Following are some of the frequently asked questions (FAQs) on Internet of Things (IoT) in supply chain management that we have encountered in our speeches, workshops, seminars, and other forums. Feel free to ask more questions if your particular question is not answered below.
Why we are qualified to write this list of FAQs on Internet of Things (IoT) in supply chain Management?
VERY FEW PEOPLE KNOW SUPPLY CHAINS LIKE WE DO - retail, beverages, food, milk, dairy, meat, livestock, explosives, chemicals, cotton, rice, graphite, solar power, natural gas, crude oil, fertilizers, electronics, packaging, glass manufacturing, machine parts, automobiles, industrial goods, mining, etc are just some of the industries where boards and executives have benefited from our proprietary knowledge of the supply chain analytics.
Since when no one had heard of supply chain, our co-founder Vivek Sood has been considered one of the most authoritative professionals in the field when it comes to the subject of supply chain in Australia, Asia, North America, South America and Europe.
He has written four seminal books about restructuring supply chains to gain massive advantage in business. He also regularly delivers keynote speeches at business schools and conferences such as University of Technology Sydney, Supply Chain Asia, Asian Bankers Forum, APEC Business Advisory Council.
He has been quoted in the authoritative business press and over 100 academic papers written by supply chain researchers around the world. Vivek and his team have examined thousands of supply chains during their projects over the last three decades and helped hundreds of executives build safe, cost effective and sustainable supply chains and careers.
supply chain IoT - FAQs
An IoT is a system which interconnects objects of natural and artificial origin to work as a team to accomplish single or multiple tasks in a closed system.
Consider the case of a honey bee. A single honey bee itself a self-sustainable organism which could potentially perform its day to day task by itself.
But a swarm of bees are a collection of organisms which can intercommunicate each other by sharing data and information for achieving a single task of sustaining the beehive. This is a perfect example of IoT.
As in the case of bees, the IoT helps to connect the various devices and personal with a unique identification inside an organisation with the help of sensors, networks and network protocols to sustain the smooth operation of the organisation.
In 1999 Mr.Kevin Ashton who is the founder of Auto-ID centre in Massachusetts Institute of Technology had put forward the idea of IoT In a presentation made for higher management of Procter & Gamble on the topic on implementation of Radio Frequency ID (RFID) which is a crude form of IoT.
Although Ashton was the first to introduce this tech in the market the idea was an ongoing subject among the computing experts from 1980s onwards.
This is such a vast topic that we could perhaps write an entire book on it - and might even do that if the sale of our books are an indication of the continued popularity of books.
The scope of global supply chains and trade is increasing every minute, hour and day for the last 60 years.
At the same time the five flows of supply chains are increasingly becoming more complex, wider and morphing into network of very high sophistication.
The number of nodes, the number of transaction, the width of the pipelines, and the throughput through the supply chains are all increasingly immensely.
This is only possible because of automation, AI and IoT is leading the supply chain field into a frenzy to attain optimum speed, accuracy, efficiency and flexibility within the system.
IoT helps the supply chain networks to catch up with the above increasing need with minimal effort and manpower in place.
IoT depends on two type of equipment - controllers and sensors. There are an entire array of these deployed to control the flow and sense the flow through the entire supply chains. Consider carefully the following slide from our report titled Global Supply Chain Group’s Guide To Supply Chain Security.
It is an art to figure out where and how to deploy these controllers and sensors along the five flows of supply chain. In a way you are designing an equivalent of human body capable of acting on all the five flows of supply chain in real time after sensing events as they happen. The objective is to cut the waste and improve integration of information flow and all other SCM flows.
IoT frequently uses Supervisory Control and Data Acquisition (SCADA) software for the real-time data transfer and processing along with the control of various automated control systems in place.
As the main units of control systems employed in IoT are sensors and programable logical controllers (PLC) SCADA integrates as the powerful tool and a high-level language of IoT.
IoT itself can function as an autonomous system which requires zero human intervention. The evolution of IoT itself takes place from machine to machine (M2M) communication.
Even though IoT itself can be an autonomous system constructed for M2M communication it can also work with human involvement and/ or overrides. Humans could also be using a variety of interfaces, embedded systems and wearables to communicate with the machines autonomously or manually.
Out of the 5 flows of supply chain management, one flow is purely information flow. Significant magnitude of information is generated by all the other four flows and this information is recorded in real time and transmitted across the supply chain.
Look at all the variety of sensors deployed all across the five flows:
All this information is used to aid better planning, better scheduling, better execution and better control of supply chains.
IoT provides real-time tracking of the four flows of SCM with respect to space and time. IoT improves both - the ability to integrate the supply chain in an end-to-end manner, and the ability to optimise the supply chain to squeeze out the last bit of waste out of it.
IoT, AI, and Automation - all three are distinct and closely related opportunities in supply chain management which are coming to fruition in this decade.
We have prepared frequently asked questions for AI, as well as for FAQs for Automation which you can read to get a more balanced view of those opportunities as well as their distinctions from IoT.
We have also created a new guide - Guide on Supply Chain Automation, And Use of Artificial Intelligence (AI) and IoT in Supply Chains. You can access this complimentary guide here.
The main challenge in implementing IoT is as follows:
Increased computing need as the IoT generates a huge amount of data the real-time calculation will increase the need for higher computing power.
Complex networks will form as the amount of IoT devices increases in the system making the network more and more complex. Possibility of failures of controllers, sensors and actuators can increase the risk in the overall supply chain.
Possibility of hijacking of controls by rogue groups can render any operation risky. Supply chain security risks are intense, as one breach in the network can open that entire IoT network risky.
Finally, there are still no international standards for IoT as of now so products from different brands will need more customisation to interlink.
Here are three pioneering case studies for IoT:
Amazon is using IoT inside there storage facilities and hub mainly in tasks like packaging, inventory management since 2013.
In 2016 the Maersk line has adopted Remote Container Management system which itself an IoT system which monitors the temperature and humidity inside the container using different sensors to avoid spoilage of goods.
Volvo uses IoT to track the shipment and delivery of its automobile and also remotely monitor the vehicles using the IoT system inside there cars to trigger the accurate service calls for the vehicles after use.
Besides the challenges faced during implementation, there are also some barriers which prevent companies to readily move towards adopting IoT.
Some of these barriers are as follows:
- Fear of being locked into the wrong technology, or wrong standard of IoT and having to write off the entire investment at a later date.
- Inability to justify investments and build a business case that would satisfy a prudent board because of misunderstanding or lack of full comprehension of all the downstream options that are opened up by a current small investment in IoT. It is very difficult to identify and assess these options without a good understanding of supply chain in its entirety, and an equally good understanding of theory of options valuation in finance. Both the skills are equally esoteric, and rarely present in one single team, let alone in one person.
- Changing landscape of IoT technology, and the uncertainty around it creates a perception that most of the technology is still experimental.
- High cost of some implementation vendors and hype created by them scares away many serious players who were burned by the hype surrounding other technologies in the past.
- Tendency of many middle managers to look for silver bullets and a resulting tendency of many boards to shoot down every such proposal from middle management.
- COVID-19, and its resulting financial crisis and supply chain volatility has made everyone extremely busy with survival issues. Only recently, in September, we can see signs of fresh strategic thinking again.
- Bundling of AI and Automation with IoT increases the hype, the costs and the expectations. That exacerbates the factors stated above.
Currently we are obviously just scratching the surface of the possibilities with IoT.
Very soon the fields of IoT, AI and Automation of supply chains will combine and start working towards producing autonomous supply chains. Of course we are very far from that reality at the moment, but in the next 20 years or so that reality will set in.
Today these things (planning, coordination and control of activities) are done with a lot of manual intervention in poor countries, or not at all in rich countries. But efficient and effective supply chains will become a norm due to autonomous nature of the future supply chains.
Today, there are hundreds of companies directing all their energy solely in creation of better IoT sensors technologies:
- Increase the diversity of properties than can be sensed - temperature, pressure, flow, weight movements etc. - almost every physical property can be sensed, and many chemical properties can also be sensed by the IoT sensors.
- Ability to sense the rate of change of physical and chemicals properties. e.g. - now we are not sensing the flow, but the rate of change of flow.
- Increase the accuracy of the sensing mechanisms - PPMs are starting to matter a lot in IoT.
- Increase in reliability and robustness of the sensing devices to that they can deployed in far wider set of circumstances. For example, sensors today ca be deployed in high temperature, or high vibrations areas when they would have fallen apart only a few years ago.
- Increase in power economy so that the sensors can work for a longer time without intervention. For example a pacemaker today ban be deployed for many more years than what was possible only la few years ago.
- Smaller sensor footprint - so that they fit into many more applications.
- Other improvements into sensor characteristics to make them more usable, useful and trustworthy.
We expect four distinct areas of employment growth opportunities in the field of supply chain IoT:
1. Hardware - controllers, sensors, their deployment and maintenance:
As stated above a significant number of companies are engaged in IoT device industry. Currently a significant majority of these are based on application agnostic devices, but very soon these efforts will start to be directed towards specific supply chain applications.
2. Software and programming:
All these hardware devices need to be programmed, interlinked and arrayed in order to make them useful. Again - a significant marjority of these are today application agnostic - but soon these efforts will start to be directed towards specific supply chain applications.
3. Field deployment
It is one thing to have the hardware and software available for deployment, but a completely different thing to bring it to the market and suggest the best hardware and software solution for the situation. This is akin to the job of the sales engineer in traditional engineering firms.
4. Supply chain IoT experts
All the software, hardware and its knowledge is useless till you have a person available to pick these up, champion them, create a business case, a phased implementation plan and risk his neck out to get the project going in any company. Every person with sufficient knowledge base to be part of his team will be equally expert in supply chain IoT in due course of time.
Almost every company engaged in avionics, medical devices, automotive electronics and other such devices has an arm which specialises in IoT devices. So all the big names in these industries are well represented in IoT supply chain technologies and devices market. Among the established players are:
- Schneider Electric SE
- Siemens AG
- Yokogawa Electric Corp.
- Siemens AG.
- Sony Corp.
- ST Microelectronics
- Broadcom Corporation
- Cisco Systems Inc.
- Ericsson AB
- Fujitsu Ltd.
- Panasonic Corp.
- Robert Bosch GmbH.
- Huawei Technologies Co. Ltd.
- Intel Corporation
- Infineon Technologies AG.
- LG Electronics Inc.
- NEC Corporation
- ZTE Corporation
- Delphi Automotive Plc
- Eaton Corporation Plc
- Honeywell International, Inc.
- Omron Corp.
Among the upcoming players are listed the following (source: Venture Radar)
- Helium Systems. Private Company. Founded 2013. ...
- Reality AI. Private Company. Founded 2015. ...
- Notion. Private Company. Founded 2014. ...
- Senseware. Private Company. Founded 2013. ...
- Nanit. Private Company. Founded 2015. ...
- Augury. Private Company. Founded 2012. ...
- CIMCON. Private Company. Founded 2012. ...
- Verdigris Technologies. Private Company. Founded 2011
guide on supply chain automation and use of IoT and Artificial Intelligence (AI) in supply chains
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Notes on FAQs
Clearly, any such list of frequently asked questions (FAQs) about supply chain can never be fully exhaustive. Neither is anyone, including us, the final authority and arbitrator on this or any other topic.
You will have your own opinions on many of these topics, and will have many other questions.
We throw open the comments section to you for your opinions and questions. We will try to address all of these, and the best ones will attract a reward in the form of one of our books, or publications.