IOT? WHAT IS IT???

The Internet of Things, or IoT, is a little-known concept becoming increasingly more important in everyone’s daily lives.  A technical definition is: cyber-physical systems incorporating internet connectivity with the ability to sense and react to the world in innovative and highly useful ways.  In practical terms, you can think of IoT as the fine tuning of efficiency in the supply chain using technology.  For example, IoT is the Amazon Echo you use to control the temperature in your home.  It’s the smart glasses your warehouse workers wear to guide them in filling customer orders.  That’s right.  There are glasses worn by humans, that have visual and verbal cues provided by a connected inventory and sales system overlaid on real world pick locations.  Think virtual reality glasses, with the actual warehouse racking in full view.  Glasses that guide them around the warehouse to pick and fill orders.

Businesses have been searching for ways to acquire more data and use it effectively to reduce costs and increase efficiency.  Until recently, the processors needs were too large, costly, and inefficient to scale up.  Three new developments changed this:

  • First, RFID tags – Radio Frequency Identification tags, which are low-power, inexpensive chips that can communicate wirelessly.  These allow manufacturers to track inventory location.  As well as monitor information such as manufacturing date, expiration date, and warranty periods.
  • Second, the increasing availability of broadband internet and cellular and wireless networking.  These systems provide digital infrastructure for IoT to be more broadly used in manufacturing.
  • Third, the adoption of IPv6, (internet protocol version 6), which, should provide enough IP addresses for every device the world is ever likely to need.

Now the stage is set to dramatically increase the effectiveness of IoT in at least three distinct areas:

(1) PRODUCTION AND FIELD OPERATIONS

IoT solutions can be used to monitor machine utilization such as run time, operating speed, product output, repair needs, and quality control.  The data is gathered in real time then aggregated in the cloud.  It is transmitted to shop floor workers’ user interface apps making immediate adjustments.  These systems can monitor inventory of raw material on the shop floor and automatically order parts to keep production running.

(2) SUPPLY CHAIN MANAGEMENT

IoT supply chain management solutions monitor the location, status, and condition of every object at any segment of the supply chain (be it an individual inventory item on a warehouse shelf or a truck delivering supplies). For instance, with the traditional supply chain management methods, manufacturers could only retrieve general data such as availability of a part.  With IoT in the manufacturing and distribution supply chain it changes everything.  Businesses can get information such as the location, condition, shelf life, quality, AND availability of each item.

(3) CONTROL OF OUTSOURCED OPERATIONS

When a business builds or buys a facility in a different city, state, or country, it still needs to maintain quality and production standards.  IoT-driven utilization monitoring solutions help industrial companies keep production and distribution on track.  They do so by monitoring real-time equipment efficiency metrics without direct access.  Smart products located in one city can access and assess real time data in another city.  This allows companies to make changes to and keep the distribution process moving effectively and efficiently.

IoT may be the new hot technology buzzword, but there are challenges.  Lack of qualified employees who can use it, cost implications, and data privacy concerns are causing businesses to carefully measure the costs and benefits of IoT adoption.  In most cases, businesses are taking a step-by-step approach.  This ensures they are implementing processes that match company culture and create efficiencies.  So, IoT is not yet self-aware, but beware, you will be hearing a lot more about it in the years to come.

Written By: John Young, CCIM