From SCDigest's OnTarget e-Magazine
- March 25, 2014 -
RFID and AIDC News: As Internet of Things becomes Real, New Opportunities for Supply Chain
26 Billion Connected Devices by 2020, Gartner Predicts, Saying the Time to Start Planning is Now
SCDigest Editorial Staff
While the explosion of smart phones is obvious to all, and companies are looking at how mobility might be effectively deployed in the supply chain, the rise of the so-called "Internet of Things" (IoT) is expanding at an even faster if less obvious rate.
And that change is sure to have some profound supply chain implications.
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"Prepare your supply chain to add value in a world of connected devices where demand signals
and asset locations are visible at a granular level," Gartner says.
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What Do You Say?
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IWhat is the Internet of Things? The term was believed to have been created by Kevin Ashton, one of the founders of the Auto ID Labs at MIT, who has said it was the title of a presentation he gave to Procter & Gamble in 1999, though the basic concept had been around for a decade or so.
It simply means that physical items, from inventory to machinery, will be connected to the Internet, and communicate relative to some status: where it is, the environmental conditions around it, it operational health and whole lot more. The fundamental change is not only in terms of increase visibility and therefore control, but also that rather than human beings being creators of most of the information that finds its way to the web, it will be sensors and chips automatically generating much of this data.
The implications are profound yet not well yet understood.
A recent research note from a trio of Gartner analysts (Michael Burkett, Steven Steutermann, and Noha Tohamy) summarizes that potential. They start by predicting that we'll see a 30-fold increase in the number of intelligent and connected devices by 2020, to some 26 billion installed units. This compared to 0.9 billion just five years ago.
By comparison, the population of smartphones, tablets and PCs will be much smaller, at 7.3 billion by 2020.
"Combined with the Nexus of Forces (analytics, mobile, social and data), will allow customers to be served in new ways having significant ramifications for the future supply chain," Gartner writes. "Today, we see industrial equipment and patient monitoring done digitally, which has allowed these digital businesses to deliver customer outcomes. This is just the beginning of what's to come."
The explosion in the number of intelligent devices will create a network rich with information that will enable supply chains to assemble and communicate in new ways, Gartner says.
"Imagine a future where thousands of devices are connected, from the customer back through the supply chain, creating new information nodes that enhance demand and supply management," Gartner adds. "All these new devices must be designed with embedded software requiring new talent and capabilities throughout the product supply network."
In the early days of the current RFID industry, the term "automous logistics" was sometimes used , especially in the defense industry, to describe a future in which materials, people and more would be automatically deployed and synchronized to perform a given service or meet a specific need. The term seems to have fallen out of favor, but examples of the concept are starting to be seen in the real world.
(RFID and AIDC Story Continued Below)
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Gartner, for example, cites Lockheed Martin's F-35 fighter jet, which is monitored by an array of connected sensors relative to the health of the aircraft. This allows Lockheed Martin to guarantee flight availability by predicting service needs and driving the service supply network. In the consumer products industry, Coca-Cola's Freestyle beverage machine allows customers to custom mix their own drinks, disrupting the traditional distribution model while also capturing valuable customer insights for future products. It also communicates to local bottlers about its inventory position.