Has the Internet of Things Revolutionized Supply Chain Operations?

Stephen DeAngelis

August 9, 2021

Several years ago, the staff at Blume Global wrote, “[Internet of Things] devices have revolutionized supply chain management (SCM). It’s much easier to understand where goods are, how they are being stored and when they can be expected at a specific location.”[1] Fast forward to 2021 and it’s reasonable ask if the Internet of Things (IoT) has really revolutionized supply chain operations. Certainly the IoT has made inroads. Tech writer Doug Bonderud (@DougBonderud) reports, “Global Internet of Things adoption is gaining ground, with estimations putting total market value at more than $1 trillion by 2022. As noted by research firm Deloitte, one area already seeing substantial spending is logistics; the transportation industry alone [has invested] more than $70 billion through 2019 into telematics hardware and software in trucks. And this is just the beginning — from delivery to fulfillment, the logistics industry is primed to deliver on the potential of IoT at scale.”[2] When it comes to IoT implementation, being “primed to deliver” doesn’t exactly equate with the claim that the IoT has “revolutionized” supply chain operations.

 

Is IoT Security Holding Back Implementation?

 

“As organizations let billions of connected devices into their corporate networks,” asks Daniel dos Santos, a Research Manager at Forescout Technologies, “do they really know what those devices are made of and the risk they may pose? The answer is likely: not really.”[3] Dos Santos isn’t accusing CIOs of negligence in procuring IoT devices, he’s simply pointing out how difficult cybersecurity is becoming. He explains that ignorance about the risks posed by IoT and operational technology (OT) devices stems from the fact that IoT and OT networks are complicated. He adds, “While a company may buy a device from a manufacturer it knows and trusts, it may not realize that some of the underlying software and components that could be used to compromise those devices are likely made by another manufacturer. … The risk these devices pose is magnified by the scale of IoT and OT overall, with Gartner predicting there will be 25 billion connected devices by 2021. A single vulnerability in one component of the supply chain could affect a large chunk of those devices across multiple manufacturers.”

 

Some pundits differentiate the IoT from the industrial IoT (IIoT) — although that may be a distinction without a difference. The staff at Thomas notes, “The Internet of Things and the Industrial Internet of Things are transforming manufacturing today, addressing the increasing demand for product customization, and changing customer expectations, especially surrounding the challenges associated with global supply chains and concerns regarding cybersecurity.”[4] Steve Loyer, President and CEO of Tech Group, LLC, believes artificial intelligence (AI) solutions can help overcome many of the IoT cybersecurity concerns. He explains, “The base step towards building any sort of security framework for IoT lies in the identification of all the devices on the network. For larger networks with millions of sensors and devices, this can be a stupendous task. With AI, however, the discovery process becomes much easier and provides thorough, detailed information on the nature of the devices. Effective network security is a result of identifying and monitoring every node in a network and this identification and asset management capacity of IoT makes it highly effective in IoT cyber security.”[5]

 

In addition to identifying and monitoring network nodes, Loyer asserts, “AI can also help in IoT cyber security through data analysis. AI does not tire or fall asleep at the wheel and is much more effective than humans at continuous surveillance of vast IoT networks in its search for anomalies in activity. Unfortunately, this also leads to many cases of false positives as any anomaly can be thought of as a potential breach. This is addressed through the use of ML and teaching AI to recognize attack patterns and reduce the load of false positives through other irregularities.” In spite of cybersecurity concerns, a survey conducted by Ubisense found, “Almost half (46%) of global manufacturers believe they are being left behind when they see industry peers roll out Internet of Things solutions, despite more uncertainty of the value, benefits and role of the internet of things in their assembly processes compared to 2020.”[6] If the IoT had already revolutionized supply chain operations, there would be no uncertainty about its value or its benefits.

 

Concluding Thoughts

 

Although there are numerous, substantial benefits obtained when implementing IoT supply chain solutions, I think it’s fair to say the IoT has yet to revolutionize supply chain operations. That doesn’t mean, however, that the revolution won’t happen. As the staff at Top Business Tech explain, “A key reason for [the] lack of [IoT] adoption, regardless of industry peer pressure, can be seen through a lack of trust in the details of what IoT can actually fix. … The fact that more than 76% of manufacturers still believe the adoption of IoT would give their organization a competitive advantage, coupled with the simultaneous worry about being left behind, suggests manufacturers agree with the direction of travel, just not the vehicle that will get them to their destination.”[7]

 

Steven Manifold, Chief Marketing Officer at Ubisense, believes supply chain professionals need to be educated about the benefits of IoT if it is going to revolutionize supply chain operations. He observes, “The good news is that, given our research suggests a lack of understanding rather than a complete lack of interest, the industry redoubling its efforts to educate and inform manufacturers should be able to turn this situation around. It’s now up to IoT providers to ensure that manufacturers don’t get left behind.” It’s not just manufacturing professionals who need educating, everyone associated with the supply chain needs to understand the benefits and risks of IoT solutions. The revolution is coming, because the trajectory of IoT implementation is clear. Nevertheless, work needs to continue in order to ensure IoT networks and devices are safe and secure. The IoT revolution would also be aided by standardization so that IoT devices had better interoperability. Most revolutions are years in the making; and, a supply chain revolution is no different.

 

Footnotes
[1] Staff, “How the Internet of Things Is Transforming Supply Chain Management,” Blume Global, 15 November 2018.
[2] Doug Bonderud, “The Evolving Role of IoT in Supply Chain and Logistics,” BizTech, 21 May 2021.
[3] Daniel dos Santos, “What Organizations Need to Know About IoT Supply Chain Risk,” Dark Reading, 20 July 2020.
[4] Staff, “7 Things You Should Know About IoT in Manufacturing,” Thomas, 3 January 2020.
[5] Steve Loyer, “Importance of AI in IoT Security,” Top Business Tech, 27 March 2021.
[6] Staff, “Manufacturers’ feel they are being left behind in the IoT race,” Top Business Tech, 10 July 2021.
[7] Ibid.