Gartner forecasts a thirty-fold increase in Internet-connected devices by the year 2020, “significantly altering how the supply chain operates.” The Internet of Things (IoT), identified as a massive trend during the recent Gartner Supply Chain Executive Conference, promises a faster, better, more cost-efficient business environment.
As part of our continuing blog series, The Future of Supply Chain Innovation, this post will examine the IoT and its highly anticipated, transformative impact on the supply chain. Experts predict that perhaps no other phenomenon will have a greater impact on creating a more responsive, intelligent, intuitive supply chain.
Gartner defines the IoT as a network of information gathering sensors that measure and report on their environments so they can improve operational performance – most often for a cost savings. Technology experts assert that the dominance of IoT is imminent, finding that approximately 3.9 billion connected things were in use in 2014 and is expected to rise to 25 billion by 2020. These predictions of skyrocketing growth emerged from the Gartner Supply Chain Executive Conference:
- By 2017, 90% of all internet connections will take place via mobile device.
- By 2014, (last year), 74% of enterprises will have a hybrid cloud strategy.
- By 2020, 50 billion autonomous connected devices.
- In 2015, 180 billion mobile application downloads.
- From 2012 – 2020, data will double every 2 years.
- By 2020, the internet will comprise of 40 zetabytes of data.
The Internet of Things is forecasted to deliver a $1.9 trillion boost to supply chain and logistics operations, according to a recent report. For supply chain organizations, the ripple effect of this trend will significantly disrupt current business processes, escalating warehouse efficiency to a new level. In other words, it is a game-changer that will transform your supply chain in the following three ways.
- A Responsive, Continually Improving Supply Chain: In an omni-channel marketplace, organizations that ramp up utilization of the IoT will enjoy a highly intelligent, transparent and responsive supply chain that continually improves itself. The IoT platform will allow supply chains to accurately locate, track and measure the movement of inventory through sensor technology and will have the agility needed to speed up or slow down based on the dictation of customer demand.
- A Smarter Warehouse: Embracing the IoT grants supply chains the ability to operate a hyper-efficient, optimal warehouse. The result (and subsequent impact on the bottom line) is a reduction in asset losses, temperature stability, and total warehouse inventory optimization and accuracy.
- A Deeply Intelligent Supply Chain: With enhanced connectivity, supply chains will feel the impact of intelligence on every area of their business, including financial, customer support, marketing, sales, and operations. By boosting forecasting accuracy and demand planning capabilities, organizations will be able to focus on the right tasks at the right times, leading to significant cost and time savings.