CSCMP's Supply Chain Quarterly
December 18, 2017
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Manufacturers see promise in the Internet of Things (IoT)

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According to IDC Manufacturing Insights, more than half of manufacturing companies are exploring IoT initiatives.

In the past eight years, the "Internet of Things"—physical objects that communicate with both the Internet and other "smart" objects—has exploded. According to Cisco Systems, there now are more connected devices than people in the world.

Even leading-edge companies, however, are just beginning to understand how this connectivity can revolutionize not only the consumer world but also the business world. The research firm IDC Manufacturing Insights has released a new report, Perspective: The Internet of Things Gains Momentum in Manufacturing in 2015, which focuses on how the Internet of Things (IoT) could radically change manufacturers' products, services, and operations.

Report author Kimberly Knickle writes that there essentially are two ways that the IoT will transform manufacturers: first, by changing the products they create, and second, by changing the way they create those products.

For example, by embedding smart technology into such products as vehicles and industrial machinery, manufacturers will be able to collect information on those products while they are in the field. This data will allow them to remotely perform such services as diagnostics and maintenance, and, in some cases, even operate the product. As a result, the line between providing a physical product and providing a service will become blurred, Knickle writes.

IoT technology will also change the manufacturing process itself. The data acquisition enabled by smart technologies will allow manufacturers to better understand their production operations in real time and, as a result, they will be able to improve quality, reduce resource consumption, and increase worker safety.

According to the IDC report, many companies are not just dreaming about these changes, they are already trying to achieve them. More than half of the respondents to recent IDC surveys said they currently are researching or are piloting IoT initiatives.

Editor's note: For more information about how the IoT could impact supply chains, see "How the Internet of Things will change your world," by Kate Lee, a senior director of research and strategy at Fronetics Strategic Advisors, in the Q1/2015 issue of CSCMP's Supply Chain Quarterly.

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