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Integrating Internet of Things (IoT) with service supply chains


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Internet of Things (IoT) will be the key catalyst for SCM 3.0. After sales supply chains, otherwise known as Service Supply Chains, stand to benefit the most out of this new technology. How can IoT play a role in driving the Service Chain? Read on.

Published in: Data & Analytics
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Integrating Internet of Things (IoT) with service supply chains

  1. 1. Integrating Internet of Things (IoT) with Service Supply Chains CONNECT-MEASURE-CONTROL-OPTIMIZE Internet of Things Service Supply Chain Infinite possibilities
  2. 2. What is Internet of Things (IoT) ?  “Internet of Things is a network of physical objects accessed through the Internet that contain embedded technology to sense or interact with their internal states or the external environment” (excludes PCs, tablets and smartphones) Source: Gartner  Few years back the devices were just dumb. Executing a set of tasks as per instructions loaded. Then came embedded electronics and software that made the devices smart. As the logical next step the smart devices are now connected and have started talking to each other  26 billion devices are forecasted to be on Internet of Things by 2020 Source: Gartner-
  3. 3. Why is IoT important for Service Supply Chains  Imagine a world where you know when a demand is going to get generated, in what quantity and where. This is the dream of every service organization  With IoT becoming prevalent one can capture various parameters along with data logs and using intelligent analytics can identify patterns that usually lead to a device failure, all this in real time  The concepts of preventive and predictive maintenance will get new meanings using IoT  This in turn will generate demand for spare parts for devices with ‘high’ probability of failure in near future
  4. 4. Supply chains integrated with IoT  IoT will improve the availability, reliability and operational efficiency of the supply chains through continuous monitoring instead of periodic testing  This will be possible only when IoT is integrated with the supply chains. From procurement, to manufacturing to delivery to managing returns  However, the amount of data that will be created by this integration will be humongous with high Signal-to-Noise ratio  In this case it becomes important to quickly and efficiently sift through the noise, pick out the most relevant data and run analytics to optimize products, services, and operations  Deeper intelligence into supply and demand will not only benefit manufacturers, distributors, and retailers, but also consumers, as their demands can be better met with this deeper level of intelligence.  IoT will help in  Adding new service revenue  Optimizing service chains  Improving productivity
  5. 5. Opportunities  IoT driven supply chains have limitless possibilities from healthcare to insurance and from automotive to oil and gas  The inflection point for IoT is still some time away. (IOT is where Bluetooth was in 1990s)  Not only does IoT help in catering to demand better but it helps in doing so while keeping costs low  Companies need to equip themselves with capabilities or partner up with firms that have such capabilities  Consider a scenario: In US a bunch of laptops can notify an OEM for change of spare part for a preventive action. This in turn will trigger inventory check at the service location. This can then dispatch a PO for inventory replenishment for it’s supplier in China. And depending on the time needed to ship, a shipping container can be booked in advance to lower costs
  6. 6. Capitalizing on IoT  Companies today need to develop capabilities to analyze Big Data that IoT would generate  Datasets are unstructured and complex with multiple formats  IoT is not just about storing information in the cloud; the data only become interesting when you combine them with analytics  Most of the time either there is a lack of will or lack of resources (money, talent, time etc)  Sometimes it’s just not on priority for the companies that have their core competency either in manufacturing or goods delivery  The best way for such companies to unlock the potential of IoT is to find some good outside partners (Eg. Entercoms Inc). Most of the companies are not really in a position internally to have advanced analytics required to make sense of the data generated Data Generating company Analytics company (Eg. Entercoms Inc.) Actionable insights
  7. 7. Risk  Cyber risk  With so much data getting generated and usage of cloud storage there is a substantive threat of data getting compromised  Data Privacy  How much of the data can be exposed and to what parties. How do you define the ownership of such a data  As the technology/concept is still nascent there is little to no regulation around it’s usage  High Cost-Benefit ratio risk  Unless IoT in service chain achieves scalability the companies need to be careful in ways in which the analytics are deployed. A lot of action can be taken up without achieving tangible benefits  Companies need to partner with the right enablers so as to keep the focus on getting the processes right over the short term for results in the long term