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Supply Chain Graphic of the Week: Another View of the Internet of Things and the Supply Chain

 
 

Make the Invisible Visible, Move from Push to Pull, Build New Revenue Sources


April 8, 2016
SCDigest Editorial Staff

There is a lot of hype and frankly even a good amount of humbug out there relative to the Internet of Things (IoT),  but nevertheless that doesn't mean there isn't something very real going on here both generally and within the supply chain.

But boiling that down to some core concepts isn't easy. So we actually liked a new graphic on IoT and the supply chain in the just off the presses annual supply chain report for 2016 from industry organization MHI and Deloitte. That graphic is shown below.

 

 

Ways in which IoT Might Transform the Supply Chain

 

 

 

What we most like about this graphic are the blocks in the first "column," on what areas IoT can transform. The potential is to (in SCDigest words based on this):

 

Make the Invisible Visible: Many processes, usage patterns, environmental conditions and more are simply not instrumented or captured today. IoT, and soon trillions more sensors, can change that dynamic.

 

Adapt Push Supply Chain Processes to Pull: If you can't see actual demand, for a product or a service, you almost by definition must either practice a push based supply chain, or react to that demand with a great degree of latency. IoT visibility can help supply chains better sync delivery with demand frim improved visibility and a reduction of latency.

 

Find New Sources of Revenue: SCDigest isn't so sure many companies will actually transform cost into revenue, but certainly many industrial equipment manufacturers have already found ways to bundle insights from the data they acquire from IoT from their machines into new services to sell to customers. This will expand to other areas, such as the Amazon.com Dash service, in which for example a Brtita water filter will keep track of how many times a filter is used and send an order for a new one from Amazon right before the current one needs replaced.

 

These transformation can impact efficiency, differentiation and innovation, Deloitte says, within the four walls of the enterprise and across the end-to-end supply chain, while ultimately providing "pervasive" connectivity to the broader environment.

 

And there you have it.

 

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