CSCMP's Supply Chain Quarterly
October 23, 2018
Forward Thinking

When it comes to the Internet of Things, users believe the hype

Two new studies show that business leaders expect big things from the Internet of Things.

The concept of the "Internet of Things" (IoT), where connected physical objects communicate with other objects and with the Internet, has been receiving a lot of attention these days. The business press is full of examples such as Amazon's recently redesigned "Dash" offering, which allows customers to reorder consumables like coffee and garbage bags by clicking a button installed in their pantries. But while such consumer-focused efforts may be receiving much of the attention, it's business-to-business applications that will seize the technology's opportunities and see the majority of its benefits, according to a recently released study by Deloitte Consulting, The Internet of Things really is things, not people.

Deloitte anticipates an IoT explosion this year, predicting that 1 billion wireless IoT devices will be shipped in 2015, up 60 percent from 2014. This growth, however, will not be driven by consumers buying "smart" washing machines or refrigerators but by businesses implementing industrial applications. According to the study, 60 percent of all wireless IoT devices will be bought for and used by enterprises and industries.

The reason comes down to simple economics, according to Deloitte. Consumers will find limited savings and benefits from applications such as turning their lights off when they are not home or purchasing dog food more efficiently. Businesses, however, could scoop up major benefits from connected devices that let them know such things as when their vehicles or equipment need servicing, where their assets are in real time, and how and when customers are engaging with their products.

A second report from the analyst firm Forrester and Zebra Technologies, which makes mobile computing devices, provides the following example from the transportation industry: Transportation firms can use sensor-enabled IoT solutions to track vehicle location, speed, and fuel usage as well as to provide maintenance alerts. This information could, in turn, be used to reduce fuel costs, provide faster maintenance service, reduce insurance rates, and reroute vehicles in real time. (Click here to see an infographic created by Zebra Technologies about how the Internet of Things could affect the transportation industry.)

Large global companies, for their part, seem to be embracing the hype. The Forrester Consulting Thought Leadership paper (commissioned by Zebra Technologies) found that respondents at 80 percent of the 593 firms it surveyed believe the Internet of Things will be their most strategic initiative in a decade. Furthermore, 65 percent of the respondents said their companies have already deployed or are in the process of deploying IoT solutions. The interest in IoT is growing fast.

Adoption levels are particularly strong in the transportation and logistics industry, according to the study. Ninety percent of surveyed transportation and logistics companies either are currently using IoT solutions or plan to deploy them within a year.

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