Interest and hype around the Internet of Things (IoT) shows no signs of dying down, according to a survey of 600 supply chain decision makers by the business intelligence and event company eyefortransport (EFT). Forty-one percent of respondents work for a manufacturer or retailer, while 59 percent work for a logistics provider.
The survey, "The Internet of Things (IoT) in Supply Chain and Logistics," found that 64 percent of respondents either have an IoT strategy in place or plan to adopt one. Of those who already have a solution in place (41 percent of the total respondent base), 87 percent are looking to expand their use of the technology.
Furthermore, respondents are adopting IoT sensors and monitoring technology at a significantly greater rate than other kinds of technology used to boost operational visibility. The number of respondents using IoT-related technology has increased by 19 percent over a similar survey in 2014. In comparison, adoption levels for global positioning system (GPS) and satellite technology increased by 5 percent and data logger use increased by 14 percent. Meanwhile, use of bar codes and radio-frequency identification (RFID) technology remained steady.
The attraction of IoT is clear. According to survey respondents, the top challenge they face in their supply chain is obtaining timely information. IoT has the potential to provide information to decision makers in real time. But how are companies actually using the technology in their supply chains, and are they seeing a return on their investment?
According to the study, the main reason companies are deploying IoT solutions is to improve customer service by providing their customers with additional information, such as more frequent updates about shipments and delivery times. Not surprisingly, then, the survey found that almost 80 percent of companies are currently using or planning to use the IoT to capture information about the location of products and assets. Other key uses are to capture information about security, temperature, and speed.
It is also clear that survey respondents do not see the IoT sensors and monitoring technology as something they will only use on a limited scale. Instead, more than 50 percent said they are looking to use IoT technology to monitor more than 10,000 shipments per year. Respondents are also looking to extend their data collection beyond their own company. Currently, 50 percent of users are collecting data down to the third-party mobile asset level and more than 20 percent are collecting data from their suppliers' IoT networks. At this time, more users (59 percent) are utilizing IoT information for alarms and real-time monitoring than for analysis that would lead to optimization and prediction (41 percent). EFT says that alarms and real-time monitoring often provide an entry-level application for IoT. The research company expects to see an uptick in the use of IoT data for optimization and prediction as users gain more familiarity with the technology.
The biggest challenge that IoT users face, according to the survey, is figuring out how to manage, analyze, and protect the large amount of data now available to them. At the time of the survey, 61 percent of respondents were analyzing less than half of their IoT data. Similarly, 31 percent of respondents say that the largest costs associated with their IoT investment are related to data management, more than network carrier costs, planning and strategy costs, or hardware costs. There was also some concern about data security, with 17 percent saying they thought that potential cybersecurity breaches posed a major threat to their IoT strategy while 47 percent said it was a moderate threat.
Return on investment results, however, indicate that the risks and costs associated with the IoT are outweighed by the benefits. EFT was able to follow up with respondents from the 2014 survey who predicted they would see ROI in the coming 24 months. According to the survey, roughly half of them had achieved the predicted ROI while the other half had not. Of those that hadn't seen an ROI, the most common reason was delays in their IoT implementation. The majority of those respondents were confident they would attain their ROI once the IoT project was back on track, EFT said.
In short, the survey results indicated that the future for IoT is bright and that adoption levels for the near term will only continue to rise.