Why do Companies need the Internet of Things? Let Me Count the Ways

“When most people think about the Internet of Things (IoT),” writes Michael Wilson, AFFLINK’S Vice President of Marketing and Communications, “they envision consumer-level products — usually wearable fitness devices like Fitbits — rather than an array of powerful tools that is transforming industries from manufacturing to healthcare.”[1] I’m obviously not “most people” because, when I think about the IoT, industrial applications are what I think of first. I suspect most people reading this article are like me. The term Internet of Things is a bit of a misnomer since it implies a single network exists through which all machine-to-machine interchanges take place. In actual fact, the IoT is network of networks. Wilson explains, “The Internet of Things can be broadly described as a networked cluster of interfaced computing devices and sensors that can transmit data from machine to machine without the necessity of human input.” Each cluster can be an isolated network or part of a larger network. Saar Yoskovitz, CEO at Augury, tries to make a distinction between the Internet of Things — which he ties to consumer products — and the Industrial Internet of Things — which he associates with the business world. “When the Internet of Things burst on the scene,” he writes, “it allowed consumers to monitor an infinite number of objects, from thermostats and household appliances to security systems and smart cars. But as IoT applications expand, its industrial counterpart — the Industrial Internet of Things (IIoT) — is forcing facilities and industrials to sit up and take notice.”[2] His distinction tries to put too fine of a point on the subject and I will stick with IoT. Analysts at Cisco believe the day will come when line between the Internet (i.e., P2P networks) and the IoT (i.e., M2M networks) will blur so completely we will simply refer to the Internet of Everything.

Why Companies need the Internet of Things

In separate articles, Kirk Carlsen (@kcarlsenjr), PLM Cloud Product Marketing Analyst at Oracle,[3] and Adam Robinson, a marketing strategist for Cerasis,[4] offer several reasons why they believe the IoT will be widely adopted by most (if not all) of the commercial sector. Those reasons include:

  1. Source: iClipart

    The IoT is Valuable. Robinson writes, “Business has a way of moving toward technologies with the greatest value. According to Louis Columbus of Forbes magazine, the IIoT is estimated to unlock manufacturing savings more than $11 trillion by 2025 globally, boosting overall economic value by 33 percent.”

  2. The IoT can Increase Visibility across Siloed Business Functions to Improve Business Maturity. “Modern manufacturers have plenty to worry about,” Robinson observes, “and visibility is often at the top of this list.” According to Carlsen, “With billions of connected devices transmitting potentially valuable information, you can begin leveraging market awareness and measuring performance within your organization. With the evolution of digital business, operating models are shifting to derive business value and competitive differentiation from visibility and predictive capabilities.”
  3. The IoT Provides Data for Advanced Analytics. The real value of connecting things is deriving insights from the data generated. Carlsen explains, “By tracking their assets in real time from any device, businesses can gain a valuable understanding of where their assets are and how they are performing.” Robinson adds, “Much of manufacturing overhead derives from costs associated with equipment repair and replacement and marketing to consumers. However, the IIoT can be leveraged to generate advanced predictive maintenance schedules, including rerouting of processes to equipment during times of repair, to maximize the life expectancy of each item.” On the customer-facing side, he observes, “The IIoT connects information generated by consumers through social media, point-of-sale systems, internet trends and beyond to manufacturers directly. As a result, companies can predict and respond to changes in the market with greater accuracy and precision.” The platform most likely to perform advanced analytics on data generated by the IoT is cognitive computing. Cognitive computing platforms can ingest, integrate, and analyze both structured and unstructured data. They can deal with many more variables than older systems. And they learn as they work.
  4. Data Generated by the IoT can Foster Innovation. According to Carlsen, “Connected devices and new sources of data streams are driving companies to reevaluate their current business models and adopt entirely new operating models. IoT breaks down the barrier between the customer and the organization. With data provided by connected devices, and by cycling that data back into the business, businesses can make intelligent business decisions that start with service and drive new innovations that meet expectations.”
  5. The IoT can help Monitor Workers to Mitigate Risk. According to Carlsen, “By connecting employees to wearable IoT, companies can gain greater visibility into their worksites. In hazardous conditions, a company can monitor the health, location, and compliance of individual workers to ensure safety. With the data collected, businesses can improve policies, adhere to regulations, and prevent accidents. IoT-enabled automation and labor tracking will deliver increased productivity and reduce costly mistakes.”
  6. The IoT can provide a Good ROI. “Based solely on the increased investment rates,” Robinson writes, “the use of the IIoT by manufacturers will become more important in the coming years. More manufacturers will leverage its capacity and analytics to bring costs to record lows and eliminate redundancy and inefficiency wherever possible. The speed of realizing a positive ROI for implementing IIoT technologies is difficult to define in terms of averages. Some companies with extreme, inefficient overhead costs will realize returns earlier. Meanwhile, companies looking to cut minor inefficiencies and boost overall revenue may require months to achieve similar returns. Ultimately, the size of the company and the dedication in deployment determines the time to return.”

In addition to reasons suggested above for using the Internet of Things, Wilson adds, “The IoT will usher in the era of the smart warehouse — where workers use hands-free wearables to access real-time information from anywhere in a warehouse without being chained to a desk. Radio-frequency identification (RFID) tags allow managers to ‘see’ the precise location and logistics of any stored item. IoT-driven smart warehouses save time, money, and excess busy work. Because IoT devices rely on cloud computing, data can be shared instantly with laptops, handheld devices, and vehicles across every link in the chain. No longer can any worker claim to be ‘out of the loop.’ IoT tablets and mobiles will send instant notifications to all involved at every milestone in the chain as well. By leveraging greater efficiencies in fleet management, IoT systems will empower supply-chain managers to improve their carbon footprint by saving time and miles across all routes and modes of transportation. Enhanced efficiency also means less emissions from your fleet. In fact, IoT devices can even identify potential trouble spots when it comes to pollution.”

Summary

“Of all that the Internet of Things promises,” writes Charlie Covert, Vice President for Customer Solutions at UPS, “manufacturers seem most focused on supply chain efficiency, and with good reason. Under constant pressure to reduce costs and get to market faster, but having limited ways to do so, IoT’s promise of faster, cheaper and better is alluring. Getting less attention in IoT discussions is the potential for revenue growth through innovation. Practically speaking, it’s easier to improve an existing operation than to improve things that haven’t yet been imagined. That vision will get clearer as manufacturers get their IoT sea legs.”[5] We should never forget that the IoT is about connectivity. That connectivity is going to create huge amounts of data needing to be analyzed and acted upon. Cognitive computing platforms are likely to be involved with those analytics and actions. As the IoT matures, companies may soon be lauding it in much the same way Elizabeth Barrett Browning expressed her love for her husband. She famously wrote, “How do I love thee? Let me count the ways. I love thee to the depth and breadth and height my soul can reach.” Supply chain managers are likely to find no end of ways they love the IoT.

Footnotes
[1] Michael Wilson, “How Does the Internet of Things Influence the Supply Chain?,” AFFLINK, 31 May 2017.
[2] Saar Yoskovitz, “2017 is the Year IIoT Becomes Normal,” Inside Big Data, 13 May 2017.
[3] Kirk Carlsen, “6 Reasons Why Companies Need IoT,” Oracle Supply Chain Management Blog, 3 May 2017.
[4] Adam Robinson, “5 Reasons Why The Use of the IIoT by Manufacturers Is Unavoidable,” Cerasis, 3 May 2017.
[5] Charlie Covert, “IoT and the Future of Consumer Products Manufacturing,” Longitudes, 31 May 2017.

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