Like many technologies that preceded it, the potential impact and value of the Internet of Things (IoT) has been long heralded – and in manufacturing and “Industrial IoT,” in fact, a great deal has been accomplished in terms of leveraging IoT to monitor and improve the operation of manufacturing facilities, processes and to track goods-in-transit.
But manufacturers can extract even more value from IoT. Device costs are coming down, the technologies and capabilities are improving and 5G networks are practically ubiquitous. Millions more devices will be deployed and connected every year for many years ahead.
Here are just a few ways IoT will help manufacturers achieve truly strategic visibility, enabling newfound powers to optimize their complex operations and supply chains.
How do we maintain end-to-end (E2E) visibility of strategic assets on a continuous basis? The reality today is that we still have many blind spots throughout our supply chains. As I’ve voiced before, many organizations have implemented some form of what they are defining as ‘visibility.’ But most organizations think of it in the most limited way, i.e., as the ‘track-and-trace’ and/or ‘where are my shipments’ portion of visibility.
True E2E visibility is a journey that goes far beyond being able to see and respond to the status of shipments in transit. And IoT has the potential to take manufacturers much further.
By leveraging IoT devices to track every single asset – or, perhaps, just particularly high-value assets – at every step and every stop, from manufacturing to destination, manufacturers will have actionable data to help them improve various aspects of operations and deliver a better experience to customers.
Consider an example in the automotive world, where trucks and automobiles manufactured overseas are loaded onto huge RORO ships that take them around the globe. Today, the customer has visibility into that RORO’s location, and they have visibility when it arrives at a shipyard. But the second those cars and trucks are unloaded, the picture goes dark. Are they still in the shipyard? When can I expect them? How can I best manage my workforce?
Going forward, IoT devices will track every individual vehicle, providing the customer with 24/7, continuous visibility and telematics data to help them optimize their operations – ultimately delivering a better customer experience.
That 24/7, continuous visibility into every strategic asset can significantly improve manufacturers’ planning processes. Think about the example of the fabled “golden screw,” i.e., that difficult-to-procure part that is essential to a manufacturer’s ability to finish a high-value product. With end-to-end, granular telematics on the location and condition of those kinds of assets, a manufacturer can optimize many different aspects of planning. And they can do so proactively rather than reacting to an unpleasant surprise.
As the level of accuracy gets better, planning gets better. The ability to deliver materials more quickly gets better. Managing manufacturing site capacity gets more efficient and optimized. And that positively impacts working capital. The benefits ripple throughout supply chain operations.
Companies are under increasing pressure from stakeholders of all stripes to make meaningful progress on environmental, sustainability and governance (ESG) initiatives. IoT has the potential to be a powerful tool in helping them do so.
First, effective IoT deployments typically drive increases in manufacturing automation, and that creates various efficiencies throughout the “plan/source/make/service/deliver” continuum, from saving fuel or power to optimizing the use of various resources in ways that help manufacturers drive towards their sustainability goals.
Perhaps just as important, rich IoT telematics data can finally be the linchpin to tangibly measuring ESG KPIs. Companies can’t make meaningful progress without meaningful measurement. And that telematics data also means a greater ability to report on progress externally to the many regulatory agencies and governments that are expected to mandate more reporting in the years ahead.
I’d roughly estimate that a typical U.S. manufacturer has visibility into approximately 65% of tier-one suppliers. With each successive tier, visibility drops lower and lower. Billions of smart devices and sensors deployed throughout a supplier network can change all of this, serving as the fuel for more accurate and detailed vendor score carding. And that’s ultimately an opportunity to gain greater insight into vendors’ ESG practices and progress, optimize sourcing strategies, and improve the overall health of vendor relationships.
The companies who are going to “win in the turns” are the ones who deploy IoT very intentionally, with very clear objectives for how they want to action this rich data. Perhaps a given manufacturer only needs 24/7 visibility and monitoring on a subset of highly strategic assets to achieve specific goals around optimizing manufacturing capacity and improving delivery times. This is just one of the myriad examples of how IoT can provide manufacturers with truly strategic visibility.
The key is to be intentional. And I can’t state that any better than did FourKites customer Jon Mosher, export operations lead at Bayer, whose crop science division uses FourKites to track shipments over the road, ocean and air. Mosher says leveraging visibility data into actionable insights is critical: “It’s good to have that information, but after that shipment has arrived, how do we use that data?”
If you’ve yet to ask yourself how you can use IoT data in the years ahead, now is the time.