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Will Internet of Things Support Future Supply Chains?

Feb. 13, 2015
While IoT clearly has great potential, it is also clear is that the Industrial Internet of Things technologies are not fully mature, with new applications continuing to emerge.

As industrial smart devices are connected to the Internet and provide useful data, the Internet of Things (IoT) is expected to improve an organization’s performance and efficiency. It also has great value to bring to the supply chain.

Connectivity can include a company’s transportation assets, industrial equipment, products made, and even the containers that carry products across a supply chain. With that connectivity comes a great deal of data. And what you do with that data is where the value comes in.

ARC Advisory group explored the topic and came to a few conclusiosn:

While IIoT clearly has great potential, it is also clear is that the Industrial Internet of Things technologies are not fully mature, with new applications continuing to emerge. Through its acquisition of GXS, an EDI and B2B integration solutions provider, OpenText could potentially support an IIoT-powered order-to-cash process; something we have not heard about from any other supplier.

ARC sees considerable potential. For example, the smart vending machine is one IIoT application that has been discussed in the media. Cantaloupe Systems, a San Francisco company that manages vending machines monitors a network of 100,000 snack and beverage machines scattered across the US.  IIoT is being used to help employees monitor the vending machines from afar to assure that items remain in stock, sense temperature changes that would hurt product integrity, and even detect thieves.

But IIoT vendor-managed inventory (VMI) processes are capable of more. At Cantaloupe Systems people are still part of the work flow. If an employee notices imminent product shortages, he or she must manually kick off the replenishment process. It would be possible to automate this by distributing the intelligence. In other words, by moving intelligence from corporate systems and human beings to local machines. The IIoT sensors on the machine could have min/max replenishment logic and even kick off EDI purchase orders when the vending machine's inventory drops below the preset minimum. When the machine is loaded with new inventory, it could kick off a receipt of goods electronic message, kicking off a payment process.

Beyond VMI, it is easy to see that IIoT could be used to enable a more automated order-to-cash processes across a variety of logistics, trading partner, and predictive maintenance scenarios.

Read more on ARC's analysis of how the IoT will affect on the supply chain. 

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