IoT Impacting Supply-Chain Management |

IoT Impacting Supply-Chain Management

By Oleg Logvinov, chair, IEEE P2413

By now nearly everyone has heard about the Internet of Things (IoT) and has (at least) some general ideas about what it is and how it might affect their lives. In truth, the IoT is emerging as a digitization revolution embedding connectivity and intelligence into the very fabric of our lives. This profound change is having far-reaching impacts far beyond consumers; it will enable businesses to streamline operations, reduce costs, and, ultimately, realize greater productivity and profitability.

According to the analyst firm Gartner, “the future explosion in the number of intelligent devices will create a network rich with information that allows supply chains to assemble and communicate in new ways.” Gartner also points out that as IoT capabilities become more prevalent, modern supply chains will rely on more physical assets being linked to a connected ecosystem that can formulate intelligent responses to efficiently deliver greater differentiated service to customers. 

Much as elements of “Just in Time” manufacturing have been widely adopted to shorten assembly times and increase productivity and output, the IoT is opening up new and innovative ways for manufacturers and suppliers to accurately track parts and materials in real time, reducing or eliminating delivery delays or mix-ups that can cost millions of dollars.

Take the example of the Dubai-based firm Exponent Technology Services (ETS) that recently developed an unmanned aerial vehicle (UAV) solution for inventory-management challenges. This supply-chain solution brings RFID (radio frequency identification) capabilities onto UAVs, better known as drones, and has the potential to save building suppliers millions of dollars. The unprecedented growth and construction boom underway in Dubai has driven a large, ongoing demand for materials delivery and places a huge strain on inventory-management systems.

Inventory tracking across large open yards, where materials are constantly arriving and being shipped out, presents a serious challenge, and has led to higher operational costs. The solution developed by ETS collects RFID tag signal data via an RFID reader mounted on a customized drone. This data is then transmitted in real-time to an inventory-management system via a GPRS connection while the drone is in flight. The inventory system then processes the RFID-collected data and can determine the location of individual bundles with high accuracy, saving significant time over traditional tracking methods. And, because man-hours saved in inventory management can be applied elsewhere in the supply chain, overall system efficiency improves.

Examples such as these typify how the integration and connectivity of IoT components, such as GPS position monitors, optical sensors, time trackers, and temperature sensors, will fundamentally change and improve how the supply chains function in the future.  

Unlike in the past, where visibility into the supply chain was limited to knowing when something shipped (or was delivered), tomorrow’s supply chain brings much greater value by leveraging advanced technologies, sensors and data generated by the IoT, and builds out an informed supply network that operates at optimal efficiency and with predictive capabilities that correct, and sometimes prevent, problems before they occur.

For business across a wide range of industries, adopting IoT technologies provides the means to better track assets, control inventory and limit inefficiencies. Real-time monitoring allows tracking of shipments from manufacturing and transportation all the way through to delivery. It also improves customer service, using embedded sensors that monitor products or equipment to predict, alert or even schedule service and maintenance remotely.  

What can we learn from the ETS example? The answer is simple: IoT in many cases will manifest itself as a clever integration and use of already existing technologies and components. In many cases, we will see devices and systems manufactured by different companies working together and enabling new use cases and business models. The ability to collect, process, and interpret information collected from the vast array of sources is the fundamental game changer here. But this wonderful concept does not work if information produced by various systems is presented in a proprietary way that is not understood by other devices and systems.  That was one of the main motivations behind the launch of the IEEE P2413 Project – Standard for an Architectural Framework for the Internet of Things (IoT).

The architectural framework defined by IEEE P2413 promotes cross-domain interaction, encourages system interoperability and functional compatibility, and drives the growth of the IoT market. In addition to standards development, it is also important to have a clear understanding of the dynamics created by technology and policy interaction in the space of cybersecurity and privacy that’s taking place throughout the world. IEEE, through its Internet Initiative, helps connect the global technology and policy-making communities, to inform the debate and decisions and ensure trustworthy technology solutions and best practices.

For supply-chain managers, it is an exciting time, with a lot of innovation now and on the horizon. Clearly, the evolution of supply-chain management will continue to play a major role in the advancement of the IoT, as millions of new sensors and devices are brought online and connected to networks. No doubt this progress will bring cost-savings for businesses and enhanced service for consumers worldwide.

Oleg Logvinov is the chair of the IEEE P2413 “Standard for an Architectural Framework for the Internet of Things’ Working Group and Director of Special Assignments in STMicroelectronics’ Industrial & Power Conversion Division where he is focused on the market development activities in the Industrial IoT space. He currently serves on the IEEE IoT Initiative Steering Committee and is the past member of the IEEE Standards Association (IEEE-SA) Standards Board and the IEEE-SA Corporate Advisory Group. In January of 2015 Mr. Logvinov was appointed as the chair of IEEE Internet Initiative.  Mr. Logvinov also actively participates in several IEEE standards development working groups with the focus on the IoT and Communications Technologies.