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Internet of Things Surpasses World Wide Web. Is Your Supply Chain Ready?

May 23, 2016


“[Last year], we passed an important milestone,” reports Per Richtun (@perricktun), an analyst with Capgemini. “For the first time in history, the mobile network traffic between machines had a higher volume than the mobile network traffic between humans.”[1] And Bob Violino (@BobViolino) notes that a report from SNS Research concludes, “Global spending on machine-to-machine (M2M) and Internet of Things (IoT) technologies will reach nearly $250 billion by 2020, driven by vertical market applications such as connected car services, remote asset tracking, healthcare monitoring, smart metering, digital signage, home automation and intelligent buildings.”[2] Manish Sablok (@ManishSablok), Head of Marketing in Central, North and East Europe for Alcatel-Lucent Enterprise, reports Goldman Sachs sees an even bigger pot of gold. He reports the investment bank views “the Internet of Things as a $7 trillion opportunity by 2020 – with IoT set to have an impact at every stage in the production and distribution of products.”[3]


The objective of the IoT is to make the automated world run smoother, safer, and more autonomously while providing human decision makers with insights to what is happening and allowing them to step in when necessary. It’s clear from the amount of data that is being and will be generated by the IoT that manual analysis of the data is out of the question. In order to collect, integrate, and analyze IoT data, cognitive computing systems — like the Enterra Enterprise Cognitive System™ (ECS) — are going to be found at the heart of competitive digital enterprises. As Sablok notes, “The hype surrounding the potential of IoT shows no sign of subsiding, and now — IoT is morphing from a smart concept to reality. The ‘smarts’ are on parade: smart cities with their smart grids and smart transportation systems and smart cars, all demonstrating the benefits of machine to machine (M2M) connectivity.” Cognitive computing is what is going to provide the “smarts” for the IoT.


Murt O’Donnell, Director of eSolutions at ModusLink, is one of the many analysts who believes industrial age organizations need to transform into digital enterprises if they are going to thrive in the years ahead. Incorporating the Internet of Things is one of the essential steps in that transformation. “Perhaps the most effective way to thrive in our fast-paced, digital world,” O’Donnell writes, “is for companies to incorporate the Internet of Things (IoT) into their business models. In the supply chain, in particular, cloud-based software that connects with ‘smart’ devices can result in an enormous, untapped opportunity to develop IoT fulfillment, customer service, or process solutions that can fundamentally change the way companies do business.”[4] Ahmed Banafa (@BanafaAhmed), an IoT expert, calls the Internet of Things “a greenfield market.”[5] He explains:

“New players, with new business models, approaches, and solutions, can appear out of nowhere and overtake incumbents. But business is the key market. While there is talk about wearable devices and connected homes, the real value and immediate market for IoT is with businesses and enterprises. The adoption of IoT will be much more similar to the traditional IT diffusion model (from businesses to consumers) than the consumer-led adoption of social media and personal mobility.”

Scott D. Smith, Executive Vice President and Chief Commercial Officer at ModusLink, agrees with O’Donnell that the supply chain represents one of the best opportunities for companies to take advantage of the Internet of Things. “With so much connectivity comes untapped potential,” he writes, “especially in the supply chain and global logistics industry. Beyond the obvious supply chain role of getting these connected devices from factories and warehouses into the hands of users, connected devices can deliver some significant benefits within the supply chain itself. The IoT is part of a new wave of innovation for the global logistics industry, bringing with it a level of efficiency that supply chain professionals from years past would not have experienced.”[6] He continues:

“Sensors are being deployed throughout forward-thinking supply chains, making every inch of the global supply chain a data point that can be captured, analyzed and fine-tuned for increased efficiency. Now that supply chains are part of the connected world, organizations across the globe are realizing significant benefits, including:


  • Visibility: The number one thing that advances in IoT have created is the ability to have greater insight into exactly what is happening at any stage and at any time in the supply chain. Supply chain professionals can now gain a much better understanding of exactly where each item is and how long it’s been there, arming them with the data they need to make informed decisions. Before the connected world came to be, companies struggled to understand their supply chains, getting only occasional updates and an outdated recap report, but all that dated information provided was historical looks back; it was much too late to make any real changes or adjustments.
  • Operational Efficiency: The real-time visibility enabled by the IoT enables information to be shared at every level — allowing deficiencies to be identified quickly so that problems can be immediately rectified, or possibly even prevented altogether. Companies can see delays, slowdowns or trends that will affect the bottom line and inefficient processes that are costing them money can be identified and corrected. Rather than relying on anecdotal information from different teams spread across disparate locations, management can easily access a real-time snapshot of supply chain analytics and make decisions accordingly.
  • Customer Service: By allowing companies to redesign supply chain processes for greater efficiency, the IoT is helping organizations dramatically reduce the amount of time from click to fulfillment. The fast and efficient delivery enabled by real-time data access is now essential in order to meet consumers’ expectations. Customers also demand access to information — from up to the minute details on where their item is in transit to accurate alerts notifying them of delivery dates and times.
  • Inventory Management: Today’s customers expect products and services exactly when and how they want them. The IoT allows organizations to automatically know when products must be restocked or reordered, eliminating delays or inventory issues that would send customers to the competition.
  • Loss Management: With sensors tracking every movement, it’s now almost impossible for merchandise to simply ‘fall off the truck’ en route to its final destination, whether it’s a retail location or a customer’s front door. And if it does, management will know exactly where the incident happened and what factors may have contributed to merchandise loss. Issues and weak spots within the supply chain can be identified before they become a problem that impacts revenue and customer satisfaction.”


Smith goes on to note that leveraging the IoT requires new business models, “including a totally different organization of supply chains.” Richtun agrees. “The future of enterprise computing is closely linked to the Internet-of-Things revolution,” he writes, “and the companies that embrace this will gain a competitive edge by re-inventing old business processes and creating new ones.” The Internet of Things is one of the most important drivers changing the business landscape in significant ways. Sablok concludes, “The key is one converged network supported by state of the art switches that enable an enterprise to remotely manage, monitor and safeguard all devices, software and data to provide IT departments with in-depth intelligence to make smarter decisions.”


[1] Per Richtun, “Internet-of-Things becomes Internet-of-Everything,” Capgemini, 18 January 2016.
[2] Bob Violino, “M2M, IoT On Track to Surpass $250 Billion In Value by Decade’s End,” Information Management, 16 March 2016.
[3] Manish Sablok, “IoT: From smart ideas to smart reality – but is your network ready?ITProPortal, 29 November 2015.
[4] Murt O’Donnell, “Does Your Supply Chain Business Model Incorporate the Internet of Things?” ModusLink, 22 April 2016.
[5] Ahmed Banafa, “10 Important Predictions for the Future of IoT,” Datafloq, 20 April 2013.
[6] Scott D. Smith, “Why the IoT is the Key to Efficiency in the Supply Chain,” ModusLink, 23 March 2016.

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